Low Interest Rates 'Should Make Us Nervous'

by JASmius



Let us count the ways, Mr. Plossser:

Near-zero U.S. interest rates are too low and should make the Federal Reserve nervous, one of its top policymakers, Charles Plosser, said on Tuesday.

Plosser said in an interview with broadcaster CNBC that even though inflation was below the Fed's preferred level of 2%, there was no reason to keep interest rates at current crisis-era levels, especially with U.S. unemployment now so low.

"That are many indicators that tell us rates are too low," Plosser said.

"We have been at zero for nearly six years and there is no precedent in history, even when inflation is too low, to have rates at zero when unemployment rates are as low as they are," he said.

Which ought to be a clue to you, Chuck, that the true unemployment rate isn't low, but more like three or four times the "official" U3 rate, figuring in the fact that pretty much every new "job" created anymore is part-time and benefit-less.  Which in turn exposes the fact that the one and only purpose for "quantitative easing" is to fuel the Wall Street bubble and maintain the illusion of an "economic recovery" that does not, in fact, exist, and never has existed.

Aaaaaand also to mask and defer (until it proves politically useful to the Obama Regime) the full consequences of the eighteen trillion dollar debt, nearly half of for which he and his party are solely responsible.

This is why hyperinflation hasn't erupted, despite six years of printing money like there's no tomorrow.  A permanently depressed (or "deflated") economy can and does soak up as much liquidity as a central bank can feed into it, because there just isn't enough economic activity going on to rev up the engines of currency devaluation.  The latter will come if (1) there is a 2016 election and (2) Scott Walker wins it, unless a continued GOP Congress thereafter impeaches Janet Yellen and reins in this monetary madness.  Otherwise, President Walker would have to do pretty much what President Reagan and then-Fed Chairman Paul Volcker were forced to do in the early 1980s: unmask the economic depression in order to keep inflation from exploding and further destabilizing the global economy.  Which would, either way, would create a "blue" wave in the 2018 midterms, gut the Walker presidency, and pave the way for Julian Castro in 2020.

Or am I getting too far ahead in O's master plan? After all, he's never leaving, right?