When I was a kid, we used to play the opposite game. Everything you said had to be the opposite of what you meant. For example, if you were hungry, you’d say, “I’m not hungry.” Or if you really liked the song on the radio, you’d say, “This song sucks.”
Well, politicians play the opposite game pretty much all the time.
If a politician tells you something is black, it’s almost certainly white. And if she tells you that a policy is going to really help you out, you’re about to get royally screwed.
Now, you may say I’m being a bit too cynical. And I would agree — if we were playing the opposite game.
George Orwell perfectly captured the spirit of the political opposite game.
War is peace. Freedom is slavery. Ignorance is strength.”
The government in Orwell’s dystopian world used this kind of language to promote “doublethink.” This is the ability to embrace two contradictory ideas at the same time and believe they’re both true. Basically, it turns the citizenry into incoherent idiots.
This is not happening in America. (You can decide if I’m playing the opposite game right now.)
Jerome Powell was apparently playing the opposite game this week when he announced the Federal Reserve’s balance sheet policy moving forward. He said — and I quote — “This is not QE. In no sense is this QE.”
So, what is the Fed going to be doing?
According to Powell, the central bank will be expanding its balance sheet. The Fed chair said details of the process will be explained in the following days, but it will involve the purchase of Treasurys.
This is pretty much the definition of quantitative easing. So, basically, the Fed announced QE while telling us that it won’t be doing QE.
Oh, and by the way, the Fed also has not pivoted to an easing cycle. The two rate cuts were just a midcycle adjustment.
And the economy is doing great!
And you thought I was just being cynical.
Fun on Friday is a weekly SchiffGold feature. We dig up some of the off-the-wall and off-beat stories relating to precious metals and the economy, and share them with you – with tongue firmly planted in cheek. Click here to read other posts in this series.
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