Friday, May 24, 2013

The Federal Reserve's new whiz-bang - - -

"Forward Guidance" is the FED's main new whiz-bang financial manipulation toy. Here's what they themselves say about it - - -

With short-term interest rates at the zero lower bound, forward guidance has become a key tool for central bankers, and yet we know little about its effectiveness. Standard medium-scale ...models tend to grossly overestimate the impact of forward guidance on the macroeconomy -- a phenomenon we call the "forward guidance puzzle." The Forward Guidance Puzzle - Federal Reserve Bank of New York

So, basically, they don't know what the un-fuck they're doing with something that "has become a key tool for central bankers."

"Forward guidance" is just FED spokes-folks publicly explaining what they think they're going to do. Before this, it was unofficial, minor, and called "jawboning." Before that, the FED kept everything hidden as if they were bluffing in a high-stakes poker game.

So the future of the fiat-based world economy hangs on something of which the FED admits, "we know little about its effectiveness," our "models tend to grossly overestimate the impact," and in fact, "forward guidance" is a "puzzle."


I've fallen and I can't get up - - -


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Anonymous Amanda Case said...

The FED only cares that they continue to get their interest on the loans, and that the government continues to take out more loans. It is the driving force of our coercive government. All that other stuff that not even they understand is part of the illusion that the FED helps protect the value of the dollar.

4:05 AM  

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