Today there is no sign of intelligence anywhere in the US government. That fact is documented every day on my website.

As I recently reported, about 900,000 new jobs that had been claimed over the preceding year have just disappeared in a revision. A further downward revision could follow.

These non-existent jobs were the Federal Reserve's evidence for a hot inflation-prone economy justifying high interest rates. All the time the Fed was preaching inflation, the Fed was contracting the money supply, a contraction that has been underway for 2.5 years. This in itself is proof that the "inflation" was really higher prices caused by the shortages the senseless Covid lockdowns caused. In other words, the higher prices were due to mandated shortages, not to inflation. A central bank too stupid to recognize this is too stupid to justify its existence.

Whenever the Fed contracts the money supply recession follows. If the contraction is too large and lasts too long, as it was following the 1929 stock market crash, the result is a decade of depression and high unemployment.

A contraction in the money supply means that the same level of economic activity and employment cannot be maintained at the same level of prices. Either economic activity and employment fall or prices fall. Historically, it has been economic activity and employment that fall first, and prices follow. Generally, that means profits fall.

Now that it has dawned on the dummies at the Fed that they have set a recession in place, the talk is interest rate reductions. Wall Street is salivating over a possible half of one percent beginning. For Wall Street, a reduction in interest rates means an increase in money, and it is liquidity increases that drive stock prices higher. What usually happens is that stock prices rise in expectation of the Fed loosening, but by the time the Fed loosens the economy is in a recession. So stock prices rise while profits fall, with the market banking on recovery to bring profits up to the level implied by the stock prices that have jumped the gun.

Things, however, can go wrong. Expectations of lower interest rates is a signal to start up home building. But if a recession is in place, who is going to be purchasing homes? If the builders' loans are due before the houses sell, the builder goes bust.