Buy, Buy, Buy Consumer, Jeffrey Lacker is Counting on You!
First of all, I need to clear something up for WC Varones' sake. He seems to believe Jeffrey Lacker is my favorite Fedhead because of his sense of humor but I have to be honest, the guy is dry as a piece of two day old toast. Though his latest from West Virginia is kind of hilarious, I have to admit it's actually the hair that makes him my favorite. It used to be the fact that he injected doom and gloom (or reality, depending on how you look at it) into each speech but obviously they've gotten to his ass and started dosing his coffee with the recovery Kool-aid so that whole idea is irrelevant at this point. Oh well.
You can read the whole thing for yourself from the Richmond Fed, I'm not going to bother reposting anything but the following:
Putting the whole picture together, I think the most likely outcome for the rest of 2010 is that the national economy will grow at a moderate rate — consumers spending will gradually pick up pace and businesses will continue to expand outlays for equipment and software, and these key components of demand should overcome any drag from commercial construction or state and local government spending.
That means the frightened consumer - who remains unemployed, overleveraged, and buried by debt - will carry the recovery (or potential recovery, that is) on their backs. Better start buying those big screen TVs again, America is counting on you, America!
I'm partial to Zero Hedge's take myself:
Richmond Fed's Jeff Lacker, in Q&A at the Regional Forum Morgantown, W.Va., disclosed that the Fed was not engaging in any "secret purchases" that he is aware of. Don't worry Jeff - we know you are not. We can't say the same for Mr. Bernanke, which is why the Fed's lawyer is always lurking like a werewolf over his right shoulder at all those congressional hearings to advise him on how far he can stretch the truth when it comes to "lying" about Greek bailouts, gold shortages, futures purchases and the like. Also notably Lacker warned against using more of the "extended period" language, indicating he is gradually shifting to the hawkish Hoenig camp, which is in dire need of more patriotic, non-bribed, rational, homo sapiens. Most notably, Lacker's prepared remarks indicate that the Fed is not going to help Obama's insane spending binge by eroding the government's debt through inflation. We wonder if Bernanke is aware of this tragic development for the HoldCo LPs invested in ObamaCorp on Wall Street.
The government's debt cannot grow indefinitely at a rate much faster than the economy itself grows, so ultimately, something has got to change — either taxes are raised, spending is reduced, or the real value of the debt is eroded through an increase in inflation, an outcome the Federal Reserve is committed to preventing.Well at least the "independent" Fed is now suggesting that the government, which is spending like a drunken whore, needs to rein in its ridiculous money burning practices, or, sorry upper 1% of society, start with the tax hikes.
Well shit, we are doomed aren't we?