ClubOrlov: NIRP Canceled!

NIRP Canceled!

No sooner had I published last week’s post on the dire need for negative interest rates than Federal Reserve mouthpieces started intoning in unison on the need to “normalize” rates. Normal, mind you, means a positive interest rate, not negative—the opposite of what I had facetiously recommended. To quote the inimitable Lee Camp, “So this means, if I just talk about something, it gets cancelled?” He was referring to exit polling at Democratic primaries being canceled no sooner than he pointed out that the very large discrepancy between the exit polls and the official results proves that the voting machines are being hacked to favor Hillary Clinton. For the sake of those of you a bit slow on the uptake, what this means is this: if you vote in the Democratic primary, and you vote for Bernie Sanders, then—congratulations!—you may have just voted for Hillary. And you will never know the truth because the Democratic party machinery is so wonderfully opaque. I could have said “corrupt” instead of “opaque,” but “opaque” sounds more poetic.

Eerily, less than a week after I published my little humorous doodle on the necessity of NIRP (for those of you still catching up, that’s Negative Interest Rate Policy, a.k.a. “free money”) the Fed starts threatening to start raising rates as early as June. Now, the Fed is another American institution that is wonderfully… ahem… opaque, and we have no idea how any of it really works. But let’s imagine that it’s a little bit like the Mad Tea Party from Alice’s Adventures in Wonderland, with Chairman of the Federal Reserve Janet Yellen as the Dormouse. And last week someone at the party—whether it was the Mad Hatter or the March Hare we will never know—splashed some lukewarm tea up Janet Yellen’s snout, causing her to stir awake briefly and say that yes, based on her personal economic index (which tracks the number of times she has lukewarm tea tossed up her snout divided by the number of times she has her head stuffed into a teapot) it’s time to raise the rate. And before you feign umbrage at my tendentious portrayal of the Fed’s inscrutable proceedings, let me head you off by saying that I totally agree with you.


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