“The hurrier I go, the behinder I get,” is a phrase often linked to the White Rabbit in Lewis Carroll’s *Alice in Wonderland*. While its exact origin within the tale is unclear, we can imagine the White Rabbit saying it just as Alice ventures down the rabbit hole.
Today’s wage earners can certainly relate to the notion of working harder, faster, and better, only to feel as if they’re falling behind. Many might unfairly attribute this economic regression to foreign factors. Yet, like in Wonderland, the reality is often far from what it seems. The stock markets are nearing record highs, but 60% of Americans lack the means to cover an unexpected $500 expense.
Curious minds may find themselves with more questions than answers. Where does the money originate? Where does it ultimately go?
Before long, they might find themselves deep in a rabbit hole filled with bewildering revelations. One such observation is that the Federal Reserve, through its fiat currency system, has fostered alarming levels of debt, inflating the economy into a colossal financial bubble.
Moreover, if one follows the flow of money, it becomes evident that the Fed’s actions have led to a drastic concentration of wealth among a select few, effectively draining resources from the many. This highlights the true reason why wage earners find themselves racing harder yet still falling further behind.
Monetary Madness
Clearly, such a chaotic system cannot endure indefinitely. Nevertheless, it tends to persist far longer than any sensible individual might expect. The last 46 years since President Nixon abandoned the gold standard demonstrate this. Furthermore, the last eight years, marked by attempts to normalize monetary policy post-Zero Interest Rate Policy (ZIRP) and Quantitative Easing (QE), confirm the unusual ability of madness to continue.
In essence, our monetary policy resembles the madness of the Mad Hatter. Its rationale often lacks coherence, as evidenced by this week’s actions where Fed Chair Janet Yellen increased borrowing costs in a deflating economy. Isn’t this counter to the Fed’s usual protocol? Are they inadvertently paving the way for another major market crash?
To be candid, one needs esteemed credentials and elite experience to manipulate credit markets effectively. The prevailing philosophy appears to be rooted in the misguided belief that one can manipulate fabricated data to influence credit prices, thus presenting a more favorable outlook for future fabricated data.
However, upon closer inspection, the underlying principles reveal a troubling reality: it’s about ensuring that major banks remain flush with cash and credit, allowing them to reap profits while burdening generations with lifelong debt.
Consider this excerpt from Wednesday’s FOMC statement: the charade that Yellen and the Fed must enact feels directly out of Wonderland.
“The Committee continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, and labor market conditions will strengthen somewhat further. Inflation on a 12-month basis is expected to remain somewhat below 2 percent in the near term but to stabilize around the Committee’s 2 percent objective over the medium term. Near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely.
“In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 1 to 1-1/4 percent. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation.”
This might well be FOMC Jabberwocky at its finest. Yet, one critical detail remains unmentioned: if one runs fast enough, they might indeed catch the rabbit. And, should they choose, they can consume it. Here’s what we mean…
Rabbit Consumption
One realization that comes with fatherhood is just how exhausting and costly it is. There are no vacations, no discounts, not even on Father’s Day.
We don’t complain; in fact, we wouldn’t trade it for anything. With Father’s Day approaching, allow us to share a brief humorous memory from a past Father’s Day, shortly after the onset of the current bull market.
On Father’s Day 2009, after receiving a card and trying on a new pair of shoes, we were informed by our charming spouse that the in-laws—and a few outlaws—were coming over for a barbecue. This meant we had a plethora of chores to tackle, and quickly.
We edged the lawns, mowed the grass, cleaned the gas grill, hosed off the patio furniture, emptied the trash, and more. After taking a moment to hydrate, we rushed to the market, emptying our wallet to procure steaks and all the necessary sides… well, almost all. Our cousin, Cesar, brought the rabbit.
“It’s delicious,” he promised, flashing a grin that revealed a noticeable gap where a tooth once resided—likely lost during a scrap in Mexico City.
Naturally, we were apprehensive when he unveiled a whole rabbit carcass, cleaned and marinated in a mixture of chili peppers, chopped cactus, and lime juice. Our concerns heightened as the pungent aroma filled the neighborhood while it roasted on the grill for nearly 90 minutes. By the time it was ready, we were convinced it would taste terrible.
Nevertheless, as we took a bite of the shredded, smoked rabbit, we hoped it might taste akin to chicken or, better yet, slow-smoked pork. Unfortunately, it did not meet our expectations. We struggled through a bite or two and, when no one was looking, discreetly disposed of our plate in the trash.
“Next time, we’ll bring crocodile,” quipped Cesar with a wink.
Sincerely,
MN Gordon
for Economic Prism
Return from Monetary Madness and Rabbit Consumption to Economic Prism
