Much is made of surveys determining consumer confidence in the economy. Expectations, however, must line up both with proper economic theories and the information at hand.
When Paul Volcker was Fed chairman forty years ago, he did what was necessary to bring down inflation. Unfortunately, the current Fed leadership at best is engaging in Volcker Lite.
The great credit expansion Alan Greenspan began thirty years ago has finally run its course. The Fed no longer can expand credit to fight the oncoming recession.
Most economists see GDP as a snapshot of the performance of the economy. However, it is better understood as a misleading statistic which fails to accurately describe what really is happening economically.
The Federal Reserve was supposed to prevent recessions that people blamed on the lack of central banking. Not surprisingly, the post-Fed recessions have been worse.
The Federal Reserve is raising interest rates and we know what follows, given there has been more than a decade of malinvestments building up: severe recession.
