It's that time of the month once again, yes it is time for Janet Yellen to speak to her faithful following and speak for an hour without saying anything. This will be double talk at it's finest, the master spinner will spend time talking about what she is looking for in the economy. The biggest problem is the data dependent FED doesn't know what data they are looking for, it's a moving target.
The biggest question is how much damage will they do the Agricultural space. The FED has single handidly destroyed prices while financially engineering funny money. The supposed lender of last resort has created one of the worst deflationary scenarios in this countries history. The unfortunate problem of currency wars is nobody wins.
If we look at the work of the FED and Central Banks around the world they have created one of the worst environments for entrepreneurs, small business and course farmers. Their policies have not only caused deflation but the ability for the small community bank to operate unfettered and willing to lend farmers the capital to operate their business.
The biggest problem with the FED and the banks is that they have taken control from their borrowers and have done some forced liquidations because they panic when prices fluctuate to far away from loan value. They force farmers to take losses at the bottom of markets because of their lack of understanding of how the markets really work.
The FED has created an environment to force out small business because they have destroyed the free market and price discovery model. The greatest asset pricing takes place when a buyer and seller, lender and borrower meet at a level that both parties are willing to exchange wealth at. Manipulation and outside interference never, they magnify the problem to epic proportions. The economy would be recovering and probably healthy if there was no Alan Greenspan, Ben Bernanke and Janet Yellen. Keynesian economics has proved itself time and time again, it builds bubbles not economies.
Financial Engineering has never worked and never will especially when the engineers are people that have no life's experience and are basing all of their decisions on theory. Theory does not work in the real world, common sense is needed in the real world of business. When a business is failing they don't go to the library to study theory they make a decision based on practical experience.
How many farmers and producers work on theory?
Join Me Thursday September 22nd at 5:00 CST as I talk about how to handle the FED and build in the proper protection to protect your assets
Register here: Bubba Talks FED, Marketing Plans and How to protect it all
Keep those stops tight!
The views, opinions and positions expressed by the author are theirs alone and do not necessarily reflect the views, opinions or positions of Pro Farmer."