Ms. Yellen made a speech last week. It was a speech that she had given before justifying the Fed's monetary policy. She omitted one word. That word was "patient". She had previously stated that the Fed would remain patient with regard to policy changes.
Those that read, rectally examine, and speedily react to any verbiage from the Fed, panicked and started selling. They realize the Bernanke bubble is real and that we are still in it.
Thereupon, Ms. Yellen got mildly provoked, having been caught leaning the wrong way, and explained. Explaining is what political types do when caught with their foot off the base. She explained that omitting patient did not mean impatient. The one percenters and their lackeys that handle their trading all breathed a sigh of relief. Once again things were good in One Percent Land.
Things are really always good in One Percent Land. Those that reside there have more than any sane person needs. But somehow it is never enough. But when you have the likes of the Bernankes and Yellens of the world looking out for you, you are on the side of the fiscal angels.
It is sort of a circle of power. The one percenters support a President who loves them. The President keeps the right people running fiscal policy. The market inflates but never bursts and the one percenters get richer.
Then there is the rest of us. Remember the good old days? The days when you could have a savings account and earn 3%. Or a long term account that gave you 5%. The Fed has taken that away from you. Now you may get a maximum of 1%. More likely, less. The Fed policy of cheap money makes money for the rich and keeps the poor down.
Our President pretends that this is to bring the economy back. Seven years and still waiting. The GDP is almost as low as bank interest rates. We are importing illegal labor when people that had good jobs are flipping burgers part time.
But the Fed stands with their President and the country suffers. You see, they are both scared to death to make a change. They suspect, with pretty good reason, that the Bernanke bubble will burst and the bottom totally fall out of the economy. They will wait. Patiently. Probably after the new President is sworn in, they will raise interest rates. Then the tiger will be loose.