Free Republic

With a 54-0 record without a rate hike (better than Floyd Mayweather's), and 58 Economisseds expecting no change, 3 a half-pregnant 13bps hike, and 53 expecting a 25bps hike, The Fed was always going to break someone's heart today. Bond yields and the USD were tumbling into the decision, which appeared correct as The Fed chickened out again... **FOMC: NO POLICY CHANGE, 0-0.25% TARGET 'REMAINS APPROPRIATE' **FOMC: GLOBAL ECON,FIN EVENTS 'MAY RESTRAIN ECON ACTIVITY' **FOMC: VOTE 9-1; LACKER DISSENTS, WANTED 25 BPS HIKE Given the "no hike", it is clear that, as we noted, Goldman is still in charge and...

Part One: The Origins of the Fed (good video at link) “The real truth of the matter is, as you and I know, that a financial element in the larger centers has owned the Government ever since the days of Andrew Jackson.” – FDR letter to Colonel Edward House, Nov. 21 1933 All our lives we’ve been told that economics is boring. It’s dull. It’s not worth the time it takes to understand it. And all our lives, we’ve been lied to. War. Poverty. Revolution. They all hinge on economics. And economics all rests on one key concept: money. Money....

Back in the late 1920's the Federal Reserve reduced the money supply (for their own reasons that probably sounded good at the time) and the result was a loss of liquidity and the Great Depression. But this time it is not the Federal Reserve that is lowering liquidity, it is the Chinese. By withholding the dollars and not sending them back to America through new ious, they have reduced the liquidity available throughout the economy. In effect, China today is filling the role that the hapless Federal Reserve did in the Great Depression. Money is really a loan from the...