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The Number One Factor Influencing Fed Monetary Policy

Submitted by MN Gordon via EconomicPrism.com,

A brief scan of the financial and economic landscape – both in the U.S. and abroad – offers ample confirmation that we are in the midst of a great reset. From a feint tickle at the turn of the new millennium to a persistent itch a decade ago, the preponderance of evidence in this regard is now much too painful to ignore. There’s no denying that things ain’t right.

Debt is increasing while GDP’s stagnating. Stocks are rising while earnings are declining. Incomes are flat-lining for the majority of workers while growing by leaps and bounds for the 1 percent. Plus there’s over $13 trillion of negative-yielding debt.

With all this going on, what’s become lucidly clear is the frank understanding that there’s nothing that can really be done to reverse it. No executive order. No monetary policy adjustment. No congressional stimulus package. No presidential candidate.

None of these, or any other conceivable command and control options, can really do a thing about it. In fact, at this point, even the most well-intentioned of government programs will likely make the ultimate breakdown and dissolution much, much worse. The hole’s already been dug far too deep to climb out of.

In short, the economic model of the second half of the 20th century is over. Increased issuances of debt no longer translate into increased economic growth. Instead, they produce wild asset price swings, casino style speculation, and epic bubbles and busts. Nonetheless, the technocrats continue offering up yesterday’s solutions with...


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