{"id":1162968,"date":"2020-01-30T16:30:35","date_gmt":"2020-01-30T22:30:35","guid":{"rendered":"https:\/\/dailyreckoning.com\/?p=108918"},"modified":"2020-01-30T16:30:35","modified_gmt":"2020-01-30T22:30:35","slug":"time-to-give-powell-truth-serum","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1162968","title":{"rendered":"Time to give Powell Truth Serum"},"content":{"rendered":"

This post Time to give Powell Truth Serum<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

The coronavirus has gone… \u201cviral.\u201d At the very least its media coverage has.<\/p>\n

You may have therefore missed the news yesterday:<\/p>\n

The Federal Reserve concluded its January FOMC meeting. It thereupon announced it is holding interest rates steady.<\/p>\n

The federal funds target rate stays sandwiched between 1.50% and 1.75%.<\/p>\n

Jerome Powell gave off his usual post-announcement whim-wham. He talked a lot, that is\u2026 but did not say much.<\/p>\n

Example: A reporter rose before him with a question…<\/p>\n

He asked the chairman if he feared withdrawing support for the \u201crepo\u201d market. The stock market may file a vigorous protest if he does, the implication being.<\/p>\n

Powell came back at him this way:<\/p>\n

\n

In terms of what affects markets, I think many things affect markets. It\u2019s very hard to say with any precision at any time what is affecting markets.<\/i><\/p>\n<\/blockquote>\n

Yet here is the very picture of precision:<\/p>\n

\"IMG<\/p>\n

Here, once again, the precise union between the Federal Reserve\u2019s balance sheet and the S&P 500.<\/p>\n

The two have gone happily arm in arm, linked, since early October.<\/p>\n

Yet a Federal Reserve chairman must master the artful dodge, the skill to pretend ignorance of the most elemental facts \u2014 even the evidence of his own eyeballs.<\/p>\n

Imagine the scene\u2026<\/p>\n

You enter a dining room for your evening meal. Jerome Powell is by your side.<\/p>\n

You are astounded to discover a behemoth draft horse lounging upon the dining table. Stunned, ruffled, gobsmacked, you solicit comment from your dining mate…<\/p>\n

\u201cWhat horse?\u201d asks he. \u201cI don\u2019t see a horse.\u201d<\/p>\n

Do we condemn the chairman? Do we impugn him, belittle him, call him into ridicule?<\/p>\n

No. We are actually in deep sympathy with him. What \u2014 after all \u2014 is this fellow to say?<\/p>\n

Is he to concede that the stock market is a house constructed of playing cards\u2026 and that he is its foundation?<\/p>\n

That it would come heaping down without his determined and continuous support?<\/p>\n

An honest answer would take the floor out of a vast fiction \u2014 the vast fiction that the stock market goes by itself, that its own pillars hold it up.<\/p>\n

Dose him with C11<\/sub>H17<\/sub>N2<\/sub>NaO2<\/sub>S \u2014 that is, dose him with sodium pentothal \u2014 that is, dose him with truth serum\u2026<\/p>\n

And the ensuing geyser of honesty would collapse the Wall Street stock exchanges… as surely as the ancient Israelites collapsed the walls of Jericho.<\/p>\n

Here is a brief sample of what Mr. Powell would confess under chemical influence:<\/p>\n

That he is a mediocrity, a blank, a preposterous formula\u2026<\/p>\n

That he is far out of his depth…<\/p>\n

That he is as fit to chair the Federal Reserve\u2019s board of governors as he is to chair a board of barbers\u2026<\/p>\n

That he cannot tell you the next quarter\u2019s GDP at the price of his soul\u2026<\/p>\n

That his enflamed hemorrhoids torture him ceaselessly…<\/p>\n

That he cannot possibly determine the proper interest rate for millions upon millions of independent economic actors\u2026<\/p>\n

That he wields far less influence over interest rates than commonly believed\u2026<\/p>\n

That the president of the New York Fed smells…<\/p>\n

That there is no actual money in monetary policy\u2026<\/p>\n

That he clings yet to his boyhood fantasy of becoming a salesman of life insurance\u2026<\/p>\n

That his wife\u2019s cooking is a daily source of agony…<\/p>\n

That his \u2014 no, no \u2014 we had better stop here. Some truths must remain dark. That counts double for a man of Mr. Powell\u2019s high station.<\/p>\n

Instead, the good chairman will babble what the world wants him to babble. Like this, for example, from yesterday:<\/p>\n

\n

The committee judges that the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions and inflation returning to the committee\u2019s symmetric 2% objective. <\/i><\/p>\n<\/blockquote>\n

Or this, also from yesterday:<\/p>\n

\n

[The] labor market continues to perform well\u2026 We see strong job creation, we see low unemployment [and] very importantly we see labor force participation continuing to move up.<\/i><\/p>\n<\/blockquote>\n

And this:<\/p>\n

\n

Some of the uncertainties around trade have diminished recently and there are some signs that global growth may be stabilizing after declining since mid-2018.<\/i><\/p>\n<\/blockquote>\n

Does Mr. Powell believe the words issuing from his own mouth? We are far from convinced.<\/p>\n

Perhaps it truly is time to fill him with sodium pentathol\u2026<\/p>\n

Below, Jim Rickards shows you why the happy talk is simply that, and why the Fed has \u201cnever been more divided.\u201d Read on.<\/p>\n

Regards,<\/p>\n

Brian Maher
\nManaging editor, The Daily Reckoning<\/i><\/p>\n

The post Time to give Powell Truth Serum<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

This post Time to give Powell Truth Serum<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

Jerome Powell under the influence of sodium pentathol…<\/p>\n

The post Time to give Powell Truth Serum<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"author":16,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[366,818,3759,716,463,1221],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1162968"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1162968"}],"version-history":[{"count":1,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1162968\/revisions"}],"predecessor-version":[{"id":1162969,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1162968\/revisions\/1162969"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1162968"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1162968"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1162968"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}