WASHINGTON, June 2, 2015 – The few realists still surviving in the nation’s capital continue to dribble out, with great caution, this year’s obviously bad economic news. The latest mild jeremiad – toned down even a bit more for public consumption – was issued Tuesday by Federal Reserve governor Lael Brainard. She’s currently a voting member of the all-important Federal Reserve Open Market Committee (FOMC).
According to CNBC, she observed that currently available economic data “so far do not suggest that the U.S. will see a significant second quarter rebound.” She also noted that the currently strong U.S. dollar has been delaying the much anticipated move by the central bank toward raising interest rates incrementally to more traditional levels.
“’No doubt, bad weather, port disruptions, and statistical issues are responsible for some of the softness in first-quarter indicators of aggregate spending,’ she said at the Center for Strategic and International Studies in Washington, D.C. ‘But there may be reasons not to ignore the recent readings entirely.’
“The dollar’s rise, she said, reduces net exports, and that drag can last for some time. In total, net exports subtracted ‘a whopping’ 1.9 percentage points from first quarter GDP, Brainard said.
“‘This large decline likely reflects more than exchange rate appreciation alone, but some drag on net exports from exchange rate appreciation is likely to persist,’ she said.”
That latter observation is Fed talk for “the economy is dead in the water and we don’t exactly know what to do.” The Fed, of course, is also worried about potential fallout from little thing like a potential Grexit from the euro, the continuing territorial gains of ISIS and everything else for that matter.
What’s really going on here is that Janet Yellen’s Fed firmly believed the Washington-wide Democrat narrative that the Obama economy was strongly on the mend due to the Golfer-in-Chief’s blinding policy brilliance and insight, something that at last could lead toward the normalization of interest rates and a rebound in business nationwide.
The problem is, all the happy talk was, is and likely ever shall be a pack of lies, promoted by the media to paper over the economic disaster this Administration has caused by borrowing and squandering mass quantities of borrowed and taxpayer dollars to pay off unions, buy votes from illegal aliens and impose a massive entitlement—Obamacare—on a public that knew it was a fraud from the get-go and to this day still doesn’t want it.
What Brainard, a former Obama Administration official, is really saying is, “Well, gosh darn, we really, really want to raise those interest rates back to normal, even if only an itty bit at a time. But our current excuse for an economy, and our current phony, understated unemployment rate make that too dangerous.
“And, since we’re now mostly Democrat appointees, we don’t want to cause this administration and our party to suffer from Herbert Hoover syndrome by raising interest rates too early, killing this ghost of a recovery entirely, and tarring all us Democrats with the whole mess we know we’ve caused but will never admit to.”
Well, actually, those are the Maven’s words. But wouldn’t it be refreshing if someone, even a Republican, actually stepped up to the plate and told the whole truth as opposed to Brainard’s limited, modified hangout?
Still no trading tips today. But we are looking at a couple of investments we’ve held for awhile. They’ve given us some nice returns, are holding up well in this uncertain environment and offer us some hope that we’ll end up 2015 with at least a miniscule gain.