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The $18 Trillion question….Fed’s Monetary Policy

In a recent Interview of CNBC, Ex-Fed Chair – Alan Greenspan said that “If countries don’t tackle the problems of fiscal policy, monetary policy will be become irrelevant“. I wonder does it really matter anymore what the Fed does at this stage? How dumb it is on part of ex-Fed Chair Alan Greenspan to not understand that is the monetary policy that drives fiscal policy.

If you read the NY Times best seller by Professor Ravi Batra “Greenspan’s Fraud“, you would come to know that the ex-Fed chairperson’s fraud has undermined the global economy. The book exposes the flip-flops in the monetary policy by the ex-Fed chair while working with several US presidents (both Republican and Democrats) during his tenure. These flip-flops in his policies have just secured his job as a Fed Chair for over two decades and made the jobs of rest of Americans highly insecure.

When I interviewed Professor Ravi Batra on the airwaves of Dallas radio station, Professor Batra explains the difficulties he had to go through in order to publish this book “Greenspan’s Fraud”. You can listen to that enlightening 40 minutes interview by clicking  Ravi Batra Interview by Apek Mulay.

In that Interview, Professor Batra has also explained about Monetary policy of Fed since Greenspan’s tenure has been such that Wages of Americans have failed to catch up with their productivity. These supply side economic policies have plunged global economy in a depression. I have already explained the crisis created by such policies in US economy and its semiconductor industry in my recently released book ‘Mass Capitalism: A Blueprint for Economic Revival’.

The root cause of the ongoing economic depression since 2007 and the coming economic collapse from the explosion of sovereign debt bubble is due to monetary policies of the central banks around the world. But, Since US has been at drivers seat of global Capitalism, the monetary policies of Fed have the most impact on not just the US but even other economies around the world. Until the Fed restores its monetary policies to bring back free markets so that wages keep track with productivity, global economy is not going to recover from its present depression.

In “End Unemployment Now: How to Eliminate Joblessness, Debt, and Poverty Despite Congress“, Professor Ravi Batra has provided a blueprint to make it possible to restore the free market economy without the intervention of congress which in itself is sold to crony capitalists. Once Free markets make a comeback, there would be more reforms needed in the economy to improve the purchasing power of domestic residents through a productive use of technology. This is the only way that the progress of Moore’s Law can be sustained in order to sustain the progress of today’s knowledge based economy.

When I provided my upcoming book with Morgan and Claypool Publishers, entitled “Sustaining Moore’s Law : Uncertainty Leading to a Certainty of IoT Revolution” to Professor Ravi Batra for a book Foreword, Professor Ravi Batra found my proposed macroeconomic solutions with regards to productive use of technology to be both monumental and practical to implement.

I had already forecasted in my article published in March 2015,”Macroeconomic Cycles & Business Models” that –

My forecast is that starting July 2015, stock markets across the world will begin to fall and by October 2015 we will have an event like the Black Monday of 1987. As I have explained, since 1980s the way US has been solving its macroeconomic problems is not by means of fixing its monetary policy to bring back free markets to keep wages on track with productivity. The real fixes to our economic problems are being delayed by excessive monetary printing. Hence, the coming economic crash of 2015 will most likely be a complete collapse of crony capitalism. No matter how much the Fed delays its hiking bench mark interest rates, the macroeconomic cycles cannot be controlled by central banks.

Hence, It really does not matter what decision the Federal Reserve takes in its upcoming FOMC meeting on 16-17 September 2015, the crash of US stock markets and demise of crony capitalism will happen by end of October 2015 irrespective of the Fed’s decision. This Friday’s jobs report has been below expectations and that is bound to happen due to lack of free markets resulting from crony Capitalism. The jobs report would be deadliest on first Friday of November 2015. This is because there would be a Mayhem in global stock markets in the month of October 2015 when most corporations will post huge losses in third quarter of 2015 due to poor sales and start cutting down their workforce.

The Fed’s bench mark interest rates are so low since 2006, did that prevent the Macroeconomic Cycles from collapsing US stock markets in 2008? No, It did not. So, It really does not matter whether or whether not the Fed raises the bench mark interest rates for first time since 2006, the US stock markets are going to crash by end of October due to Macroeconomic cycles.

However, I am very optimistic of the future of Global economy as I mentioned in my previously published blog ‘Destruction is a pre-requisite for any New Construction’. The below three books would bring back A New Golden Age of high prosperity and growth in the global economy.

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