Monday, Aug. 31, 2015

The media/press is lazy. In today's world of the 24-hour news cycle there is more filler and idiotic opinion than any semblance of diligent fact-based reporting. The current topic in the financial sector is when and whether the Federal Reserve will or won't raise interest rates. What is missing in all this chatter is the fact that anything the Fed does in the next four months is meaningless. If the Fed decides to raise rates...So What? It will have no effect on the economic activity of this country or any other. There will be some speculation in the currency markets but it will be over quickly. Nothing the Fed is contemplating will have any lasting effect in the real world. At best, whatever the Fed does is window dressing but if you listen to the talking heads on TV you would think that the fate of the world will be decided on September 17th.

The main reason the Fed would raise interest rates is to choke off the economy and kill inflation. Commodity prices are falling because China has finally owned up to being just one big Government spending binge. The world is running out of storage for all the oil sloshing around the globe. All of this combined with the  stock market performance last week, which was a huge deflationary event, and there is no economic reason for the Fed to do anything. With the rest of the world slowing down economically, the US economy looks OK. If there were any real journalists in the financial news business they would be out talking to business owners, contractors, bank lending officers, local merchants etc. and actually try to ascertain what the US economy is doing. Don't hold your breath.