“The hurrier I go, the behinder I get,” is oft attributed to the White Rabbit from Lewis Carroll’s, Alice in Wonderland. Where this axiom appears within the text of the story is a mystery. But we suspect the White Rabbit must utter it about the time Alice follows him down the rabbit hole.
No doubt, today’s wage earner knows what it means to work harder, faster, and better, while slip sliding behind. However, for many wage earners the reasons why may be somewhat mysterious. At first glance, they may look around and quickly scapegoat their economic reversion on foreigners.
Yet like Wonderland, things are often not as they first appear. When it comes to today’s financial markets, there’s hardly a connection to the real economy at all. Stock markets are just off record highs, yet 6 in 10 Americans don’t have $500 to cover an unexpected bill.
A curious fellow may look around and find more questions than answers. Where is the money coming from? Where is it going?
Before he knows it, he’s gone down the rabbit hole where he observes the darnedest things. He may even discover that the Federal Reserve, with its fiat money, has created and perpetuated insane and incomprehensible levels of debt. And that this, in turn, has blown the economy up into a massive financial bubble.
On top of that, if he follows the money, he will see that the Fed’s endeavors have resulted in the extreme concentration of wealth in the hands of the few while looting the many. Hence, he’s discerned a more accurate reason why the wage earner must run faster and faster while falling further and further behind.
Obviously, such a mad system can’t go on forever. But it can go on much longer than any honest person would dream possible. The experience since Tricky Dick Nixon closed the gold window nearly 46-years ago bears this out. Moreover, the experience over the last 8-years, attempting to normalize from ZIRP and QE, confirms the unique ability for madness to persist.
In short, monetary policy has gone mad as a hatter. Its reasons don’t rhyme and its rhymes don’t reason. Just this week for instance, Fed Chair Janet Yellen raised the price of credit in the face of a deflating economy. Doesn’t this go contrary to the Fed’s standard operating procedures? Are they just providing cover for the next great market bust?
To be frank, to carry out the dirty deed of price fixing credit markets one must possess credentials from a prestigious university, have worked under a lengthy and trusted tutelage, and proven to be of elite pedigree. When it comes down to it, the surficial philosophy is based on the unfounded belief that one can connect the dots of fabricated data and then monkey up or down the price of credit to make future fabricated data appear more to the Fed’s liking.
Below the surface, however, the real philosophical nuts and bolts are revealed; it’s all about keeping the big bankers flush with cash and credit so they can collect rents while indenturing generation after generation with lifetimes of debt.
Here is a brief except from Wednesday’s FOMC statement. The charade Yellen and the Fed must play are straight out of Wonderland.
“The Committee continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, and labor market conditions will strengthen somewhat further. Inflation on a 12-month basis is expected to remain somewhat below 2 percent in the near term but to stabilize around the Committee’s 2 percent objective over the medium term. Near term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely.
“In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 1 to 1-1/4 percent. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation.”
This is FOMC Jabberwocky at its finest. Still, the Fed fails to mention one very critical piece of nonsense. That is, if one runs fast enough they can sometimes catch the rabbit. Then, if they so choose, they can eat it. Here’s what we mean…
One of the many things we didn’t grasp until we became a father was just how exhausting and expensive it is. No vacations. No markdowns. Not even on Father’s Day.
We’re not complaining. In fact, we wouldn’t have it any other way. Given that Father’s Day is upon us, what follows, for fun and for free, is a brief anecdote from a certain Father’s Day of yore; one that took place not long after the commencement of today’s late-stage bull market.
Specifically, on Father’s Day 2009, after opening a card, and trying on a new pair of shoes, our fetching bride informed us the in-laws – and several outlaws – were coming over for a backyard barbeque. That meant we had plenty of chores to do, and quick.
We edged the yards, cut the grass, cleaned the gas grill, hosed off the patio furniture, emptied the trash, and more. Then, after pausing a moment to drink some water, it was off to the market where we emptied the cash from our wallet to buy steaks and all the fixings…well almost all, that is. For cousin Cesar brought the rabbit.
“It’s good,” promised Cesar, grinning through a gaping hole in his front teeth which we presume was knocked out in a Mexico City street scuffle back in his native country.
Naturally, we had some reservations when he pulled out a whole rabbit carcass, free of its fur and guts, from a bag where it had been soaking in a cocktail of chili peppers, chopped cactus, and lime juice. These reservations were further heightened by the pungent stench we wafted on the neighborhood for nearly 90 minutes while roasting it on the grill. By the time the rabbit was done cooking we were positively certain it wouldn’t be good.
Still, as we bit into shredded chunks of smoked rabbit flesh, we hoped somehow it would taste like chicken or, better yet, a slow smoked Boston pork butt. Alas, it didn’t. We choked down a bite or two and then, when no one was looking, promptly discarded our plate in the trash.
“Next time we’ll bring crocodile,” said Cesar with a wink.
for Economic Prism