Our central banks are engaged in a breathtaking programme of activism. We don’t know where it will lead. But, from the historical record, activism and central banking go no better together than drinking and driving. Keep it up long enough and you’re bound to have an accident.
But the accident hasn’t happened yet. So most people have stopped worrying about it. They smell the liquor on the driver’s breath. But they get on the bus anyway.
Why not? At least the Federal Reserve is trying…even if they see little actual good coming from it. The New York Times reports:
The Federal Reserve is making modest progress in its push to reduce the unemployment rate. But that is not the jobs goal Congress actually established for the Fed. The central bank is supposed to be maximizing employment. And on that front, it is not making progress.
The share of American adults with jobs has hovered around 58.5 percent for more than three years, roughly five percentage points below its prerecession peak.
Job creation has merely kept pace with population growth. The unemployment rate, now 7.6 percent, has fallen mostly because people stopped looking for work.
There is little sign, however, that Fed officials are considering an expansion of their four-year-old stimulus campaign as the Federal Reserve’s policy-making committee prepares to convene Tuesday and Wednesday in Washington.
How do you like that, dear reader? The most reckless driving in central bank history…raising the footings of the US financial system by a factor of five times…from $800bn to $4trn…
…and it has not resulted in one single extra job. Despite the central banks’ race to fluff up the money supply, the percentage of the population with jobs has not budged since 2009.
At least they’re not planning on raising their blood alcohol level even higher!
But the employment news is not the only source of bad news. And the bad news comes not just from the US, but from Europe too. A report yesterday told us that unemployment in the eurozone has reached a new high. France’s economy looks increasingly fragile. And Spain may need a bailout.
And the longer their reckless driving fails to have an impact… the more likely they are to want to press down on the accelerator even harder… and open another bottle of Jack Daniels.
Who knows what will happen? All we know is that the Federal Reserve still have their pedal to the metal… and a bottle of whiskey at their lips. On which corner… at what speed… with what other vehicle… on what day… will the accident occur?
We wait to find out, along with everyone else.
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