The Fed

The Federal Reserve's monumental mistake of cutting rates this past week can only be understood in the context of the rising God complex of central planners: an overwhelming combination of ignorance and arrogance.

By being so dovish for so long, the Fed has greatly limited what it can do in case of recession without resorting to untried and radical solutions like negative rates.

In the wake of the financial crisis of 2008, the Federal Reserve and other central banks around the world adopted new “tools” to influence economic activity in addition to its standard open market operations.

These days, the commercial banking system isn’t where the action is. Instead, it’s the shadow banking system that needs direct feeding to goose inflation—at least inflation in asset prices, and also to keep the debt service on the nation’s debt as low as possible.