Clear As Glass

The market seems to think that Janet Yellen will raise interest rates at the December meeting. And of course, it may well be right. Because she has been flailing around without any clear idea of what to do. Remember that the Fed raised rates during the Great Depression (soon to be the Lesser Great Depression) simply because lowering them had not worked and, well, we might as well try it. Didn’t work.

Economists, including Janet Yellen, ignore data in favor of theory. In other words, what theory predicts is what is happening, the data flow is obviously wrong/distorted/maladjusted/whatever. As a non-economist, I can look at the data, which has been saying for some time that the US economy is in recession. The factory order report today was further confirmation, as the following chart shows with crystal clarity. (Really should be optical fiber clarity – glass that, BTW, is so clear you can see through a 2,000 mile thickness). Ms. Yellen is a lot thicker than that. And yes, I’ve posted this chart before as it continues to evolve.


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