Dallas Fed's Fisher Gets Me Excited But Doesn't Accomplish Much Else
JDA's #1 Fedhead is still chugging along making it clear that more easy money isn't the solution. You tell 'em, #1!
"In terms of further easing, nothing has been decided," Dallas Federal Reserve Bank President Richard Fisher told Reuters in a phone interview. "Nothing is predestined."So says Fisher. Remember, there's no way out but devaluation and we all know that.
Likening the effects of monetary easing to the prescription drug Ritalin, used to calm children who otherwise have trouble focusing, he warned that doing too much will do more harm than good.
"We would like to have orderly financial markets in order to lead us out" of economic malaise, he said. "What we need to think about are the negative side effects" of doing still more easing, and such effects are already evident, he said.
Stop it, dude, you're turning me on.
By continuing to push down on interest rates, Fisher said, the Fed "lulls the government to sleep," when what is really needed is for lawmakers to make budget and other fiscal decisions that provide businesses the certainty they need to make critical hiring decisions.
"They want an easy fix," he said, of markets' desire for further easing.
Oh God yes, tell me more.
"The solutions to our problems do not lie in the monetary sphere," he said. "The solutions lie in getting our fiscal house in order....Otherwise, we are just running the presses."
Unnnngggghhh I need a cigarette now.
Bottom line: as exciting as all of this talk is, Fisher is outnumbered by easy money whores who know if we pull out now, the entire system will collapse upon itself. As much as I'd love to see that, even I realize what a disaster that would be.
Still, all we've accomplished is kicking the can down the road. Are your investments worth more today because of Fed intervention? How about your car? Your house? Your career? If you sell your house today for more than you bought it for years ago (haha yeah right), does that mean it was actually worth more or did they just rob the purchasing power from the dollars your buyer will buy your house with?
That's Fisher's point (that and shit-talking the government for using the Fed as their own personal piggy bank even though the Fed has been complicit in using us as one too), the "fixing" that's been done thus far has not actually "fixed" anything it all, so more isn't going to "fix" it more.