Fed Overestimates U.S. Economy's Strength

by JASmius

Of course they do, Mr. Sri-Kumar; it's in their job descriptions:

Most Federal Reserve policymakers expect the economy to grow 2.1% to 2.3% this year, but once more the Fed is overly optimistic, says Komal Sri-Kumar, president of Sri-Kumar Global Strategies and a senior fellow at the Milken Institute.

He predicts growth of 1% to 1.5%.

"The Fed has been consistently wrong since 2009," when the economy began its recovery from the recession, he told Yahoo.

"You want to listen to them because that is what they are going to anchor their monetary policy to, but then you know that they are not going to be correct."

KSK is a lot closer to the pin than "Old" Yellen, but he, too, is nonetheless blowing smoke up everybody's mortgaged bloomers.

First, the economy has never recovered from the "Great Recession" because it was not a recession (i.e. a temporary economic downturn) but a depression (permanent economic downturn) being maintained by the socialist dictates (runaway debt; punitive, suffocating regulatory thuggery; punishing, confiscatory taxation) of Obamanomics.

Second, it's not that the Fed has been "wrong"; it's that the Fed has been part of the blanket deception designed to bilk the public into believing that a recovery is taking place at all in order to provide ongoing political cover for the Regime's ongoing "fundamental transformation" operations.  Kind of like a perpetual analgesic duping a seriously ill patient into putting off major surgery until he keels over dead.  And when We, The People, periodically notice that the economy is "underperforming," the Fed just cuts rates again, and the White House issues another sunny assurance that "Recovery Summer" is just around the corner, and would finally get here if it wasn't for those "obstructionist" Republicans blocking the injection of another dose of the economic disease they're powerless to treat.

Third, the Fed's primary job is to keep interest rates at zero in order to encourage public and private indebtedness and discourage savings and thrift - starving capitalism of capital, as it were - and maximizing the number of American households "living part-time paycheck to part-time paycheck" - which is to say, on the perpetual ragged edge of dependency.  Another purpose is to encourage another unsupported, unjustified, "easy money"-driven stock market rally (like the current one) in order to set up another huge stock market crash to provide Barack Obama with the crisis he needs for his "fundamental transformation" endgame.  And, lastly, there is the artificial masking of the true magnitude of the debt by minimizing its servicing costs in order to keep all these plates spinning crazily along.

The practical effect of it all is to steadily erode the value of the U.S. dollar toward bathroom tissue levels.  Which probably sounds odd, since the mission of the Fed is supposed to be the antithesis of that.  But that simply reflects the fact that the Federal Reserve was "fundamentally transformed" a long, long time ago.

Oh, one more thing, Komal: If you seriously believe that an economy that shrank an annualized three percent in Q1 is going to grow at that same rate the remainder of 2014 with Barack Obama's jackboot on its throat, remind me to play poker with you.  A lot.