Fed Is Catching Up to Reality

In normal times the trading desk at the New York Fed is assigned with keeping the market rate for fed funds close to the target set by the FOMC. But with the Fed widely expected to cut rates by 50 basis points to 1 percent this afternoon, the situation has seemingly reversed.

The following chart from the NY Fed web site shows the effective fed funds (brownish) vs. the target rate:

Comments

[ksmithdc:]

The words "fed" and "reality" don't often intersect often. LOL!

2008 Oct 30 09:57 AM

[swaps:]

The Fed is a privately owned monopoly which artificially constructs an unreal world to benefit primarily its major owners. As Forbes magazine noted a few decades ago it swings between creating too much money and then destroying money by manipulating interest rates.

It has replaced God.

But it actually human, more like sub human.

Everyone has forgotten that just three or so years ago Greenspan began ratcheting up interest rates in order to slow the economy, put people out of work and "fight inflation." After accomplishing what it set out to do why is there such a furor over its success? This is what the Fed does. Congress itself is in an unreal world - insulated from the real world and Main Street by its own inflow of tax revenue through good times and bad - and borrowing from foreign nations to whom American jobs were callously outsourced.

The illusion of prosperity woven by the artificial Fed is just that - a web that traps the unwary.

The Congress overspends, the White House overspends and then money created out of thin air is "borrowed" to be paid back with interest.

Our money clearly says Federal Reserve Notes. It is not from the United States Government. It is from the privately owned Federal Reserve Bank. In U. S. history, privately-owned banks that issued their own notes often produced notes that became....unreal and worthless. How would the Federal Reserve, over time and excess, be any different?

2008 Oct 30 11:42 PM