Riding Postilion

Our Federal Reserve chairman must be an equestrian stunt man. His Wednesday posting of a financial forecast has him straddling two horses single-handedly. The horse to his left we can call "Interest Rates". The horse to his right is "Inflation." Mr. B knows that riding postilion is really his only option, yet he fears getting crushed by inflation run amok. That's why he continues to rein in interest rates while hoping inflation will not move over 2 percent.

Another way of envisioning this: Secured help for borrowers while hoping that people won't have to fall back on, let alone live on, their savings. Alas, standing tall in the saddle makes U.S. susceptible to low-flying returns on investment with excessive debt smacking U.S. upside the head. Not a smart way to ride out the wave of unemployment still cresting.

Planned stunts, like we're being offered, are usually exhibited as a circus act. It's a big gamble that can't be trumped. In fact, I vaguely remember a ringleader by that name explaining how he borrows money to buy businesses that he then uses as collateral to borrow more money. Time would show, however, that when more bills came due than revenue came in, bankruptcy was the mounted escape for his personal assets.

If such a routine wasn't being encouraged by the Fed chairman, it would be halted by the courts as yet another Ponzi scheme.

The Old Guard of the economy understood the care needed to ride postilion. They didn't want to leave unprotected the leg people needed to get up on their debts. They put caps on limber poles that would be harmful, since unstable, otherwise. They were near-side cautious of the downside of riding roughshod over the value of the country's currency.

Standing above out-of-control hedgers and over-extended consumers riding shotgun is for a stunt double. Don't try it at home. Don't think you can pull it off. Don't get caught between racing expectations and straining gallops. Too narrow a track and too fevered a pursuit of the prize can get you trampled underfoot.

Even a small bit can cause uncontrollable salivating. Unbridled enthusiasm runs rampant over coordinated efforts to pull together as a team. The opening bell has a way of throwing any horse sense to the wind.

If our economic caisson is going to be brought safely and surely into the fortified storeroom of solvency, then we can't be running headlong into a quagmire of our own making. It doesn't take an Olympic rider to sidestep the horse manure - just someone capable of riding postilion.