Zero Hedge: As the whipsaw in stocks and the dollar sank in today – while the bond market remains unimpressed by the machine’s liftathon today – market participants are still shaking their heads at what just happened.
One of the more outspoken of those market participants is DoubleLine CEO Jeffrey Gundlach who took to Twitter this morning to express his disdain…
“Three months ago the Fed predicted totally different policy than where they are now. How can they predict 2020 policy with a straight face?”
But he was not done, in a brief interview with Reuters after the close, Gundlach unleashed on Jay Powell and rest of the FOMC warning that their sudden cautious stance on raising interest rates could backfire by creating uncertainty in the economy. more …
Opinion: “I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around (these banks) will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.” Thomas Jefferson
There are many variations on Jefferson’s quote but the point is, there is danger from all powerful banking institutions, like we have now.
On October 3, 2018 Fed Chairman Powell’s seemingly innocuous statement ” we’re ‘a long way’ from neutral on interest rates” sent the stock market down 20%, until he blinked on December 27 and said the economy was strong, and the global stock market started to recover.
The Fed’s Keynesian big government approach to managing short term interest rates was on display. With government debt now at $22 trillion, the idea of much higher interest rates would not only make the national debt unsustainable but make it more difficult for corporations (you know those evil companies that the left hates that employ millions) to maintain profits.
So on Wednesday the Fed got defensive, said the economy is slowing and one of two things is happening:
- They are wrong again
- They know of something in the economy that is really bad like 2007
“It feels eerily like ‘07… The stock market is near its high and the economy is noticeably weaker – and yet everyone is saying ‘Everything is Great!” Gundlach said.
The biggest danger to the economy is the Federal Reserve itself, who thought that printing $4 trillion in counterfeit dollars was a swell idea.
I said that!