Bill Bonner Wedesday

America’s Second Greatest Generation

London, England

Dear Diary,

Fed chief Janet Yellen is talking about raising rates. From USA Today:

“If the economy continues to improve as I expect, I think it will be appropriate at some point this year to take the initial step to raise the federal funds rate target,” Yellen said in a speech at the Providence Chamber of Commerce in Rhode Island.

She added, however, that after the first hike, “I anticipate that the pace [of subsequent increases] is likely to be gradual. […]

Yellen said that “it will be several years” before the Fed’s benchmark rate is back to normal – which is close to 4% in an economy that’s performing well.

No Real Recovery

We have proven – beyond reasonable doubt – that if anyone can predict the market’s movements, he doesn’t work at the Diary.

But when it comes to the economy, we claim a little credibility. We saw the debt crisis of 2008 coming. Addison Wiggin and I wrote about how America was due a debt collapse in our 2006 book, The Empire of Debt.

It was so big… so obvious… and so in your face, who could have missed it?

And after the worst of the crisis subsided, we saw not only that there was no genuine economic recovery, but also that the economy couldn’t recover.

Genuine economic growth is something you can allow, but you cannot force. If you try to trick your way to it – with phony interest rates, more debt, and cockamamie inflation targets – you will retard the growth, not speed it up.

This is obvious, too. But Ms. Yellen is paid not to see it.

And in the absence of real growth, the Dow at 18,000 looks vulnerable. It wouldn’t be at all surprising to see a rolling top take shape… with a sharp break in the fall.

But here we leave the vagaries of the market to pay homage to America’s Second Greatest Generation.

In the wake of Memorial Day, we feel guilty about the way we’ve treated the old f**ts….Continue Here

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3 responses to “Bill Bonner Wedesday

  1. Pingback: Bill Bonner Wednesdays: Osama Bin Laden was a good guy? | glass of scotch·

  2. Pingback: BILL BONNER WEDNESDAYS: The Glorious Imbecility of War | glass of scotch·

  3. Pingback: Bill Bonner Wednesdays: Our New Friend, al-Qaeda | glass of scotch·

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