The Reverend


The April Consumer Price Index report....



Over the last 12 months, the all items index rose 1.1 percent

before seasonal adjustment.



The index for all items less food and energy rose 2.1 percent over the last 12 months, compared to a 2.2-percent rise for the 12 months ending March.



It seems as if there is still no threat of runaway inflation in the U.S. economy. The 10 year Treasury bond yield stands at 1.85%....basically where it's been for....years. The sluggish economic recovery that began in 2010.....is still, well, sluggishly recovering.



And all of that is seen by the FED as an indication that the economy needs to be slowed down.....yes, slowed down. Janet Yellen, yesterday....



"It's appropriate, and I've said this in the past, I think for the Fed to gradually and cautiously increase our overnight interest rate over time and probably in the coming months, such a move would be appropriate," said Yellen in a speech at Harvard University, according to CNBC.



Again, raising the FED rate is for the purpose of slowing an overheating economy. Again the question....does it look to you like the U.S. economy is overheating? Why, then, raise the FED rate? Here's the only clue offered in The Hill's piece...and it's a bit troubling....



The bank in December raised rates for the first time in almost a decade, a small but significant signal of optimism for the economy.



So, raising the FED rate while economic fundamentals do not warrant a rate increase is for the purpose of "signaling..optimism". No, raising the FED rate is not a signal of optimism for consumers looking to buy a house, find a job, or get a wage increase....because raising interest rates will make all those things much more difficult, if not impossible. Again, raising the FED rate leads to SLOWER consumer spending, more layoffs, a continuation of stagnating wages and a diminishing of optimism for tens of millions of Americans hoping to make a better life for themselves and their families.



But raising the FED rate signals optimism to the....investor class. Because market fundamentals for the past almost-decade have not, and still do not, portray an economy that needs slowing down, raising the FED rate AGAIN is but a psychological ploy to keep those Big Money Boys enthused about playing the casino-based markets.



This all reminds me of the gibberish a number of years ago about corporate "uncertainty" over income tax rates. You remember. Billionaires, it was said, were oh-so-uncertain over whether the Bush era tax cuts for the wealthiest would be raised under the Kenyan Usurper. Until that "uncertainty" was eliminated,....well...those billionaires just couldn't be optimistic about promising new investment, new hires...new anything.



Then, as now, the problem with the economy had nothing to do with tax rates. The problem then, as it still is now, was that consumers did not have enough disposal income to stimulate a sluggishly-recovering economy. Big Money Boys, then, and still today, had no reason to invest in expanding their businesses because demand for goods and services did not warrant new investment. Why invest to expand your business when consumers don't have enough disposal cash to buy the stuff you are already selling?



Instead, the Bigs used most of their record profits over the last few years to buy back their own company's stock...which, of course, drove those stock prices higher....which benefited Big Investors even more.



How, then, does raising the FED rate AGAIN signal optimism to the Investor class? It does so by demonstrating how johnny-on-the-spot the FED is to KEEP WAGES FROM RISING. It's as simple as that. The FED is bending over backwards to signal to the Fortune 500 company barons that it has their backs. The FED is telegraphing to our nation's oligarchs that it is prepared at a moment's notice to pre-emptively tamp down wages and make it harder for average Americans to get a raise, find a job, or a better one.....through continually "signaling" that they will raise the FED rate.



Raising the FED rate in a slowly recovering economy where inflation is nowhere to be seen as a threat has no other purpose than to keep wages low. Raising the FED rate slows down the economy incrementally forcing more laid-off workers to compete for fewer jobs. Labor is a commodity like any other commodity. The more labor there is in the marketplace, the less that labor is worth.



So, agree or not, what the FED is signaling is that, in our nation's ongoing economic class warfare, it will continue to side with the billionaire-few over the average-working many. Slowing a sluggish economy down now is not only counter intuitive and cruel, but I would argue, treasonous to the American People.



Not to fret though.....because the FED is "signaling optimism."