The Fed has no mandate outside the 50 states, but it unofficially
determines foreign debt and currency markets across the globe in a big way
anyway.
Now, chairwoman Janet Yellen has testified before Congress that the
Federal Reserve is looking to increase interest rates, on the pretext of low
inflation. The rate increase represents an enormous price fixing mechanism
that will alter the course of investments for everyone.
The ground shakes when the Fed takes a step. Never mind if it should be
this way:
Federal Reserve Chair Janet Yellen said Wednesday that the central bank
could raise interest rates before inflation picks up as long as it foresees
price increases accelerating and the job market continues to advance. (Source)
Jim Grant, publisher of the Grant’s Interest Rate Observer, has been calling out
currency manipulation and interest rate manipulation for some time.
The main driver of these manipulations, from the shadows and out of the
mind of the public, are the actions of the Federal Reserve, which affects
other central bank actions and much of the global market.
Watch what Grant said on NBC News:
Grant
called the Fed’s interventions a “virus of radical monetary policy.” And
according to Grant, there’s no going back… their actions are pivotal to the
entire marketplace. With below zero interest rates under QE1-3, that amounts
to free money for the biggest banks and massive worldwide economic
manipulation:
“To me, the substantive fact about the Fed is that is has been
involved in the greatest protracted experiment in price control in modern
times. Interest rates are prices that have been suppressed and
manipulated and generally federally man-handled. And the consequences of the
distortion of these critical prices called interest rates, these distortions
are at every hand. But we can’t know the final consequences, but we can be
pretty sure they will not be wholesome.”
“And to me, this virus of radical monetary policy is now coursing
through the political bloodstream. There’s no going back, at least not for
the medium term. The world has come to expect that the central bank will be
there in force, in unprecedented ways, with the greatest
improvisations come times of trouble. There will be trouble coming up, of
course there always are.”
Incredibly, Grant points out that some 83% of the entire global stock
market is based upon the 0% rates set by the Federal Reserve. When those
rates change, for better or worse, there will be global echoes.
Citing a Merill Lynch book titled “The Longest Picture”, Grant states
that:
“83% of the world’s stock market capitalization is under the shadow of
zero percent interest rates. And something in excess of $4 Trillion of
sovereign debt yields nothing, or a little less. So, we can’t know exactly
what valuations will be in the absence of these most extraordinary
interventions, but I think we’d have a very different financial landscape.”
The great experiment in price controls set by the Federal Reserve has
undoubtedly resulted less freedom and less economic stability for the average
person. The last of the middle class is being vacuumed up by the post-2008
economic crisis interventions.
There is no understanding their impact.
Markets based upon zero interest rate free money are hooked, as a junkie
is, on Federal Reserve interventions, artificial liquidity and de facto price
controls.
A little while back, CNBC commentators made it even more clear, admitting
that “we’re absolutely slaves to the central banks.”
