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Anybody who thought the Fed would raise interest rates in September (for only the second time in 10 years) less than two months before a tight presidential election between two unelectables probably thinks the Clinton Foundation is a charity or that Donald Trump pays taxes.
The Fed's intellectual deficit is only exceeded by its lack of political and moral courage. Even JPMorgan Chase's Chief Economist David Kelly, an establishment figure, told CNBC that the Fed is "doing long-term harm to the economy by not hiking interest rates... the economy has hit every target they have set. And we've got an inappropriate level of interest rates which is distorting asset markets, blowing bubbles, and will eventually end up in inflation. They're imposing long-term harm for no short-term good here."
Naturally, the Fed doesn't see it that way. Janet Yellen, in one of the lamest excuses for inaction in Fed history, said, "We judged that the case for an increase had strengthened but decided for the time being to wait for continued progress toward our objectives."
If that isn't pathetic, I don't know what is. But it wasn't as ridiculous as what came next...
The Markets Love This Fed's Poison
I was almost too depressed to be outraged by the market's reaction to this inanity or the nonsense written about it by the mainstream financial press.
I nearly choked when I saw the CNBC headline lauding the market for celebrating the Fed's failure to act, though I stopped myself after realizing that expecting anything intelligent from the laughingstock of financial media is just inflicting torture on myself.
While the Fed and its apologists engaged in some empty talk about a December rate hike, to quote Hillary Clinton at the Benghazi hearings - "what difference does it make?"
The fact that the Fed is hemming and hawing about raising rates by a miniscule 25 basis points for only the second time in 10 years is proof positive that it not only has no clue what it is doing, but that everything it has done over the previous decades has been destructive to economic growth.
People used to laugh at Ron Paul for demanding that we audit the Fed and then shut it down. Hell, I used to laugh at him.
Now I think he had a point.
They're Using 100-Year-Old Economic Theory on a 21st Century Economy
Leaving aside the fact that the Fed's stated inflation and employment objectives have been met, as Mr. Kelly pointed out, the real problem is that the Fed doesn't understand these objectives.
Trapped inside the intellectual vacuum of traditional economics, our central bankers still believe inflation is too low while clinging to outdated employment models. It is joined in these errors by the mainstream financial press.
About the Author
Prominent money manager. Has built  top-ranked credit and hedge funds, managed billions for institutional and high-net-worth clients. 29-year career.
Since you popped up, I have looked forward to the opportunity of your guidance. At this point I'm dead in the water but I have a feeling all that is about to change. I'm a disabled Vietnam Vet and a retired tattoo artist, I've been beat up and yelled at and I can handle anything you can throw.