What a sad bunch of speech-listening monetary lackeys we’ve all become. Did you watch Janet Yellen’s press conference yesterday? She is surely a nice enough woman and smart in the way of academics that study money but have never created an ounce of real wealth. But what a sad spectacle!
All around the world, otherwise normal people who would go about living productive and risk-taking lives must now stop to listen to central planners. Not more than one generation after the fall of the Berlin Wall and what have we done? We’ve become the enemy. We manage our economy and our money in exactly the fashion for which we condemned the Soviets. And it all appears perfectly normal and routine now!
In any event, Yellen spoke and not much happened. Mario Draghi should take notes. The gold price crossed over US$1,262. Yellen said the Federal Reserve would hold its target rate between 25 and 50 basis points. It was neither bullish nor bearish for stocks. It just… was.
It’s rock star Mark Carney’s turn today. He has perfected the noble art of doing nothing. He has not raised the Bank of England’s target rate one single time in his tenure. I can’t tell whether that’s admirable restraint or just lying down on the job.
But for investors, please note that the UK gilts have had their best start to the year since 1993. That’s back when John Major was prime minister and the European Union was just a superstate glint in the eye of Jacques Delors. The bond market thinks UK rates are staying put for quite some time, which is good news and bad news.
Category: Economics