ghost-economy

Federal Reserve Ghost Economy Forever: Media Pretends It was Unforeseeable

The media is finally acknowledging that elites will never let the Federal Reserve ghost economy end.

The Federal Reserve ghost economy is a situation where nominal “prosperity” depends not on production but on the central bank’s manipulation of interest rates. For example, the news story below shows investors worrying about what bankers say, not about which companies are meeting needs and making a profit:

This Federal Reserve ghost economy was introduced as a temporary measure to bring us out of recession. That was a lie. The media is now selling the idea that it is permanent, but they are pretending this situation is unexpected.

From the Washington Post:

Two years ago, top officials at the Federal Reserve mapped out a strategy for withdrawing the central bank’s unprecedented support for the American economy.

The official communiqué was titled “Policy Normalization Principles and Plans,” and it was supposed to serve as a rough outline for the tenure of newly installed Fed Chair Janet L. Yellen. Essentially, it consisted of two basic parts: Raise interest rates and shrink the central bank’s massive balance sheet.

But now, both of those steps are being called into question as Fed officials grapple with an economy that appears to be stuck in first gear. Instead of executing its exit strategy, the Fed is confronting the possibility that the dramatic measures it took to safeguard the recovery will remain in place indefinitely.

“Maybe this is one of those cases where you can’t go home again,” former Fed chairman Ben S. Bernanke wrote in a recent blog post arguing for a shift in course.

Yeah, it’s difficult to go home again after you burned your house down. The Federal Reserve isn’t responding to a perpetually weak economy; they’re causing it!

Their admitted rape of savers, fixed-income recipients, and consumers for the sake of nominal equity prices has given us the worst “recovery” since World War II.

What was needed was to acknowledge bad debts and to write them off. Many companies should have been allowed to go bankrupt so that we could start over. The establishment will do all in their power to prevent such rational action.

In fact, they are probably going to increase the poison that the Federal Reserve ghost economy has been pumping through our financial system.

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Joe Scudder

Joe Scudder is the "nom de plume" (or "nom de guerre") of a fifty-ish-year-old writer and stroke survivor. He lives in St Louis with his wife and still-at-home children. He has been a freelance writer and occasional political activist since the early nineties. He describes his politics as Tolkienesque.

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