The Financial Times over the weekend reported that Beijing would abandon its large-scale share purchases. This story sparked declines in China’s A-listed shares, although the Shanghai Composite pared losses to close 0.8 percent down. Then there is Jackson Hole and how amazingly people are stupid and do not understand what the Fed has been saying that they must get back to “normalization” of interest rates. The people who pretend to be pundits in the know, keep talking about unemployment, jobs, inflation, as if the Fed were still guided by Keynesian economics. The Fed is trapped and has lost all ability to return to Keynesian economics unless it raises interest rates to normal levels. We have a massive debt crisis coming from state, municipalities, and pension funds. They all needed “normal” interest rates to survive.

Federal Vice Chairman Stanley Fischer regarding the likelihood of a U.S. interest rate hike in September commented on CNBC on Friday from the Jackson Hole symposium that it was too early to determine whether last week’s market turmoil would impact the likelihood of a rate hike next month. The Fed is not going say, look, we have a real crisis on the horizon unless we raise rates. This is the code word they use – NORMALIZATION

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