(Source: Financial Times)
The best is not enough when the nation is in an unsexy mood unsuited for the diaphanous dialectic of the Fed. The country wants the clothes off, lest the monarch still believes his clothes are on on Constitution Avenue.
When the Fed’s spin cycle is run by politicos in public affairs in bureaucratic adulation of the FOMC, amnesia afflicts the memory of the meaning of “extended period.”
On the heels of prospective Republican presidential nominee Mitt Romney declaring that he will boot Ben Bernanke from the Fed, the former Princeton professor was at his transparent best but not very impressive.
Republicans are not new to wanting to give gentle Ben the boot because he is too much of an economic orthodox to be tough enough on a recalcitrant economy. John McCain did not know who Bernanke was, for good reason.
In an ongoing saga of a south-north tango reminiscent of A Scent of a Woman, the Fed is akin to Norman Bates sitting up Alan Greenspan, the dead mother of the post-Volcker Fed, in decaying rigor mortis expecting moral hazard to cure the American Psychos of their misogyny.
Spring showers notwithstanding, spring still has not come to Xenophon’s oiekos despite the multitude of mechanism designs by one great central banker succeeding another in America and Europe – Bernanke (Dillon, South Carolina) and Greenspan (Brooklyn, New York) :: Mario Draghi (Rome, Italy) and Jean Claude Trichet (Paris, France).
Ben, the maven of monetary economics, should remember, especially at a time when the United Kingdom has entered into a double dip after the double dipping of Wall Street and the City of London, that the very reason why he got the job to run the Fed is because he could see the connection between Greenspan’s inflationary asset price bubbles and Hoover’s deflation.
The posterior distributions in the Bayesian gymnastics of the Federal Open Market Committee (FOMC) are more heuristics than hermeneutics – rules of thumb and seat of the pants fly-bys of Iceman when Maverick is needed to spark the economic engine in an environment where priors don’t hold.
At a Wednesday press conference, the normal pay day for Fed employees when pink slips are being written up the world over, Bernanke thinks Japan and the United States are very different. The land of the rising sun was in deflation, he says, 15 years ago. And that America is not so today, therefore, it is not an analogous circumstance. Perhaps so. It is, however, the similarity that is critical. Both countries are still caught in a liquidity trap.
The rainmakers on Wall Street have barely anything to do while the ‘knuckleheads’ are having a field day. The financial markets are feeling good. The pocket books ain’t. Money gushing out of the New York Fed’s fire hydrants feels like lawn sprinklers for the few and acid rain for the many.
It is not over until it is over. Sheltered from the scorch of his own money supply, the Rainman of the Great Depression, is oblivious to the mechanics of the coming depression.
How can I keep my brother when I cannot keep myself?
Public service rhetoric in the echo chamber of Washington by the Ohio Shermans that pre-emptively takes down the aspiring Rockefellers is not fertile ground for the money rain.