Saturday, September 8, 2018

After global central bank officials admit they aren't prepared for next crisis, the Fed hints of new monetary policies in 2019

After both Greenspan and Bernanke admitted they never saw the financial crisis coming in 2008, global central bank officials last week admitted in their 'Gang of 30' conference that the Federal Reserve today is not prepared again for a new crisis.  And with this being said, it appears that the central bank that controls the global reserve currency has taken note of this assessment and is hinting at a new monetary policy direction in 2019.

Federal Reserve Chairman Jerome Powell says the US central bank could retire some of its key policy-setting tools and key macro indicators. The move is aimed at improving the precision of the Fed's assessments of economic health, enhancing policy transmission to the non-financial sector, and reducing the chances of policy mistakes. 
Powell said that he doesn't completely trust concepts such as the "neutral rate" and hypothetical estimates of "full employment" when making his policy decisions. The chief of the US central bank said that the Fed should avoid excessive reliance on its theoretical tools and variables, but should take into account a broader set of market and non-financial sector data instead. – Sputnik News
The reason we point to 2019 as to when these new methodologies may come into play is because rising inflation and an overheated stock market have pretty much driven the Fed into a corner where they have to raise interest rates in both September, and at December's FOMC meeting.

Unfortunately for the Fed, and for other central banks for that matter, their creation and reliance on faulty models such as with inflation, unemployment, and real gdp make any policy direction they choose to go meaningless.  And this is because they know deep down that their policies, actions, and scope were never intended to help the common man or the general economy, and why their need to hide the truth behind false data and benchmarks is the very thing that will eventually lead to their destruction when the masses finally wake up.


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