Rate-Hike Silliness On Steroids
The stock market went nuts yesterday when the Fed did what anyone with an IQ higher than 70 should have easily foreseen — i.e., nothing. For the benefit of those on the wrong side of the trade, and for the umpteenth time in four years, I am going to repeat my answer to the question, when will the Fed raise interest rates? The answer is: “NEVER!!!!!!!!!!” Yes, two regional Fed presidents insisted recently that we would almost surely see tightening in September. And benighted editorialists across the land continued to assert that a rate hike was imminent even after the Dow plunged more than 2000 points in August. I received a chart in my email as recently as yesterday purporting to explain why a 25-basis-point rate hike was absolutely, positively a done deal.
And yet, when I asked a few weeks ago if anyone out there in the blog world would lay me odds, I got zero takers.
The current obsession with Fed policy is the most wretched outbreak of mass folly since the Y2K ‘crisis’. Why on earth would the Fed raise interest rates if the economic recovery that would justify such a change is a brazen hoax? Recovery, you say? If you needed proof that it doesn’t exist — other than for those whose wealth is tallied in vaporous financial assets — consider this recent WSJ story: “More than half of students at 347 colleges and vocational schools defaulted on their loans or failed to pay down a single dollar of their debt after seven years.” If the broad middle class were truly prospering, would this be happening? Of course not. And we’re not talking about chump change either, since student debt is at $1.2 trillion and rising.
Not only is the alleged recovery not floating everyone’s boat, it is creating an entire generation of mal-trained college grads with poor job prospects and a staggering debt load that has made it economically impossible for most of them to buy a home or start a family. This bodes very poorly for America’s future. We all know the recovery is a joke. Even the lying, snake-oil-peddling, economically ignorant poohbahs at the Fed know it. Can we stop all the idiotic talk about a rate hike? It’s not going to happen.
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