“The Stuka” – How The Fed Manipulates...

“The Stuka” – How The Fed Manipulates You

Posted in the Chicago Forum

Ben Hunt

Chicago, IL

#1 Dec 10, 2013
“The Stuka”– How The Fed Manipulates You Into Believing What It Wants You To Believe

W. Ben Hunt
December 10, 2013

Up to the walls of Jericho
With sword drawn in his hand
Go blow them horns, cried Joshua
The battle is in my hands

–“Joshua Fit the Battle of Jericho”, traditional African-American spiritual

Today the financial media – and the WSJ’s Jon Hilsenrath in particular – is the Fed’s Jericho Trumpet. Unlike the Luftwaffe, the Fed is not trying to inspire terror, but they are similarly trying to turn a powerful tactical weapon into a strategic weapon through psychological means. The Fed is now embracing the use of communication as a policy tool in a totally separate manner from whatever concrete actions the communication is ostensibly about, and they use Hilsenrath (and a few others) as a modern-day Joshua to blow the horn. The Fed is now playing the Common Knowledge game openly and directly, making public statements through their media intermediaries to tell you how ALL market participants perceive reality, even though in fact NO market participant has a clear view of reality. In the Common Knowledge game – whether it’s the Island of the Green-Eyed Tribe that modern game theorists write about, the Newspaper Beauty Contest that Keynes wrote about in the 1930’s, or the Emperor’s New Clothes that Hans Christian Andersen wrote about in the 1830’s – the strong public statement of what “everyone knows” creates a reality where it is rational behavior for everyone to act as if they, too, see this reality … even if they privately don’t see it at all.



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