The John Batchelor Show

VIDEO: Central Banker to the World?

September 21, 2015

Thursday 17 September / Hour 1, Block A: Mary Kissel, in re: the Fed decided to keep the Fed funds rate at zero for largest customers, so Wall St can borrow taxpayers money at zero and lend it out for money. 
Danielle DiMartino Booth worked under Rick Fisher, a Dallas Fed hawk; from zero to 0.25% makes a difference? Last time the Fed raised interest rates was in June 2006 – before iPhones existed.   Where does the money that's not in banks actually go - into stock market? commercial property (which is now 20% higher than at the peak of the bubble)?  Has the Federal Reserve missed a cycle – healthy economy, co's compete for workers, wages rise, eventually Fed raises rates to cool down the economy. The normal cycle is now missed by years; what unexpected problems are accruing?
The problem now is the uncertainty that damages our market – firms have no notion of the contours of he cycle, so do not invest. "Rules-based Fed" says John Taylor – we have no rules. MK: That depends on looking backward; I'd refer that the Congress get rid of the Fed's dual mandate – inflation and jobs – and hew to original obligation: only control inflation.  The problem is the layers of reed tape, crushing tax burden, crippling of our most productive industries.