This post is an excerpt from the Pro Trader and Monthly Investor MacroLiquidity report. Subscriber links are below the text.

The FOMC meeting minutes are a key instrument of official Fed propaganda. They show how the Fed wants you to view policy. There’s some useful information there, but it’s not what the Fed says it thinks about the economy. I won’t waste your time with what the July meeting minutes reported that the Fed staff and FOMC members said about the economy and markets. Events have a way of superseding whatever they wanted you to think 6 weeks before the release.

I guess they need the 6 weeks to continue the debate over what they want you to think they were thinking so that they can tinker with the language. If the Fed wanted to, it could release a transcript the next day. But that would be messy. It wouldn’t be proper propaganda at all. They need to massage the words so that they come out “just so.” The minutes are designed to soothe you into thinking there’s no need to panic. All is well. The omnipotent Fed has everything under control. As the world goes crazy around you, you merely need to stay focused on the soothing words. “All is well. We know exactly what we are doing.”

It’s all so silly.

Since the Fed professes that it wants to be “transparent,” why doesn’t it just release the full meeting transcripts right after the FOMC dog and pony show? And why, exactly, has no one in Big Media pressed the Fed on that? 

The answer that it is a show and Big Media is part of it. The Fed doesn’t want to be transparent at all. It wants to manipulate the markets, not just you and me, but the big macro players who dominate trading. Big Media plays along with that. It hones and tweaks (and sometimes twists) the message which the Fed carefully attempts to craft for what it wants you to think, while not telling you what it really thinks. The BM is out in Jackson’s Hole right now, disseminating The Word of The Fed. The Wall Street Journal’s Jon Hilsenrath and his corps of Fed access queens has been hard at work, pumping out the official message.

Regarding the minutes, the key issue is not what the Fed thinks about the economy, which even Big Media has been reporting they never get right. There are two key issues. One is whether they admit to thinking about shrinking the balance sheet. The other is whether they discuss how they will actually get money rates to move higher when there’s such a gargantuan oversupply of cash in the banks. If we see discussions of those issues, it tells us that at least they are thinking about them. It does not mean that they are telling the truth about what they think.