 Hello, and welcome to another episode of the Minor Issues Podcast. I'm Mark Thornton at the Mises Institute. Fed Chairman Jay Powell dropped a little bit of a bombshell on the Marketplace and America really. Recently, August 25th, 2023, in his little speech, Inflation, Progress in the Path Ahead, at the conference held at Jackson Hole, Wyoming. He concluded that speech by saying that the Fed was navigating by the stars on a cloudy night. And that's a little bit of a change from their previous buzzword position of being data dependent. This episode of Minor Issues is going to look at what does that really mean? And I'm going to give you a deep theoretical, methodological point about the divide between mainstream economists like Powell and those at the Federal Reserve and Austrian economists. And I'll conclude with a brief statement of my crazy speculative conspiratorial analysis, which is based on my research, which has demonstrated that the job of the Fed is basically a con job of duping the American public, of swindling us, of lying to us, deceiving us, to convince us, to get away with things, and in this case, getting away with your money. Navigating by the stars on a cloudy night does not sound good. If you do that long enough, you're going to end up crashing your ship. But it's really true that we don't know the future and we can't know the future precisely. We don't know completely what is in store for us in the future. So there is truly speculation about the future. Ludwig von Mises, the great Austrian economist, said you can't scientifically know precisely the future of human action in the same way that you can know about things like when Haley's Comet will return to our solar system or what happens when we mix baking soda and vinegar. Human action is not about rocks. It's not about fixed relations like in physics or even measurement. People can always change their minds and the results of human action very often depend on the interaction of hundreds of people, thousands, millions, even billions of people. And all these people can change their minds. They can change their taste and preferences. And of course, we can also change government policy. Now with data dependency, that was the previous buzzword and that was more comforting. It sounded more precise. It sounded more scientific and transparent. But in both cases, especially with data dependency, it's always backward looking. The Fed is always looking at data that has already occurred in the past. And of course, you wouldn't want to run backwards through a forest that you were unfamiliar with because you know what kind of results you would get. And this view that you can be data dependent is basically the same view as what philosophers call empiricism or positivism. And it's also very convenient for policymakers who are trying to convince or con the people that they're engaged in some kind of rational economic policy manipulation. Now, in contrast to that, Austrian economics and Austrian economists use theory as a guide to the future. That's why we support a free market based economy because it's self-regulating. You don't need a bureaucrat in Washington to decide what interest rates are going to be. You let the market do that. And we all get to have our input into the process, whether or not we want to buy or sell or abstain entirely from a market, everybody is allowed in, whereas nobody is allowed into the deliberations of the Federal Reserve system and their policies about interest rates and the money supply and mortgage rates and all that. And so Austrians generally fly under the banner of the gold standard because that is market based money. It's something we can all participate in or abstain from if we want to. So it's a big, absolute divide between what mainstream economics and what the Federal Reserve system does. On the one hand, it's data dependency and Austrian economics, which is based on economic theory that's going to give you predictable results. So if we have supply and demand, we're going to get market prices and buyers and sellers are going to be satisfied. Not everybody is going to be satisfied, but there's going to be some regulation that is independent of any one person's point of view or their self-interest. Now on the other hand, I do think that the Fed and J Powell see severe trouble ahead in the economy of some kind. They have all the data that you and I have access to plus inside information about what's going on inside of banks and what's going on inside markets. They can get on the phone and call the top 100 banks or the top 100 brokerage firms or whatever they want. They have access to every single piece of data. And so I think they can probably see this problem or problems just like you and I can with the recent bank failures, for example, they should have been able to tell what was going on. I mean, they have regulators who are following all of these banks and the problems were in retrospect pretty obvious, but they had all of the data that was going on inside those failed banks. And of course, the Fed itself is running in the red. Its balance sheet is upside down. It's losing money under generally accepted accounting principles. They would soon be bankrupt themselves. So I think they're really getting us ready for some kind of power move from the Fed to respond to this emergency situation. The Fed is going to need more power. It's going to need more control. It's going to have to impose all sorts of restrictions in order to save us from this emergency that they no doubt see coming. They already dominate many markets, including the mortgage market, the interest rate market, the banking market. I mean, they have as much control as you can possibly imagine. I don't know what they see, but they're not really telling us what they already know. And so the only thing I can suggest is that everyone, all listeners, be prepared for this, be prepared for the emergency, be prepared for this Fed response personally in your household, professionally in your job and in the marketplace, as well as politically to stand up to any kind of power grabs that are coming down the line. So thank you, Jay Powell for the revelation. And this has been another episode of the Minor Issues Podcast.