FSN: The Born Again Jobs Scam, Part 2: The Fed’s Labor Market Delusion

Be prepared for the next great transfer of wealth. Buy physical silver and storable food.

by David Stockman
David Stockman’s Contra Corner

Dr.Yellen is at it again. Noting that there is still “slack” in the labor market, she insists that more liquidity pumping action by the Fed is warranted:

“Based on the evidence, my own view is that a significant amount of the decline in participation during the recovery is due to slack, another sign that help from the Fed can still be effective.”

Once again, what Yellen is really saying is that our macroeconomic bathtub is not yet full to the brim—owing to insufficient aggregate “demand”. The purpose of the Fed’s “accommodative” policy, therefore, is to flood the American economy with additional consumer and investment spending—so that “slack” or unutilized labor and capital resources will be “pulled” into production. Thus guided by the visible hand of the Fed, a virtuous cycle of rising spending, output and income will at length levitate our $17 trillion economy to its full-employment potential.

Continue Reading at DavidStockmansContraCorner.com…