Untitled Document

CHANGING THE EVALUATION MODELS
Published 08/January/2016, Updated 17/January/2017
By Eric Lafayette; fordemocracy.com

Dear Mrs Yellen
In many of my previous emails you read that I frequently use the words '' Cold showers '' when analyzing decisions regarding interest rates. I added that these cold showers will hamper the global economy and slow down the American economy preventing a rise in inflation, In addition I guaranteed that there will be many cold showers in the future. I previously described that these cold showers will come from different situations that will take place outside the USA such as economic problems in other large nations or wars far away from the USA. Very recently in the first two weeks of 2016 global economic growth was revised from 3.3 percent to 2.9 percent and the Chinese stock exchange had two catastrophic weeks in a row which means that we had 3 cold showers in less than 2 weeks.
The result is that my prediction are absolutely correct: THERE IS NO INFLATION ON THE HORIZON for the USA even when employment in the US is showing improvement.
My absolute point is that the Fed should review its MODELS for assessing inflation in the US and how it assess the US economy and the Fed should give much more importance to the cold showers from outside the USA because it is an element that slows down growth and reduce potential inflation.
The models used now are misleading.
We must also remember that a rise of interest rates in the US could lead to a much stronger dollar which will be the death of the US recovery.
I hope and I am confident that the Fed will redesign the Models that assess potential inflation.
The Fed should not raise interest rates in the next three months but keep a foot close to the accelerator.
Best regards
Eric Lafayette

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PLANETS WERE ALIGNED FOR JANET YELLEN
Eric Lafayette december 20th 2015
Before Janet Yellen raised US interest rates in mid December 2015 there was a quasi-perfect situation which was close to being a miracle created by the new world order that included the very important close to 0% US interest rates.
Janet Yellen decided to remove one of the planets from its perfect alignment by slightly raising the US interest rates and mentioning that she will raise them slowly in the following months and years. It is a mistake which is based on the usage of dinosaurs era tools such as unemployment statistics and their like. A US interest rate close to 0% would have given the US years of economic bliss and at the same time helped the rest of the world.
Now the dollar is going to get stronger and stronger which is horrible for the US economy and for US industries and manufacturers. It may take a year or two or a little bit less but this very strong dollar will trigger ?a new US recession or a slow down in its economy.
Unfortunately most of the leaders around Janet Yellen threw at her a whirlwind of contradictory advices. Staying still was the way for Mrs. Yellen and the US economy to stay on the path to economic Heaven. It would have been the greatest economic recovery since the dawn of time if Mrs. Yellen had stayed put and not raised US interest rates. With this raise the USA has entered the path of many years of mediocre economy instead of entering an era of many years of economic magnificence. It was not very visible but before the raise of the US interest rates the USA was already on the path of a dynamic, brilliant economy without any damaging inflation. The US economy would have been head and shoulders above the rest of the world economies while helping them.
However their is a glimmer of hope for the future if Janet Yellen does not raise interest rates for the next 6 months or raise them only in a Cosmetic way and the word cosmetic means insignificant or so small a raise that it will barely affect the Dollar or will barely raise interest rates for consumers and companies. Having said that, the Fed not raising interest rates in 2016 is the way to go and the goal of 2% inflation is not a relevant number anymore because of the poorer state of most countries.
Eric Lafayette
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Mrs. Yellen, Please Do Not Put Your Foot on the Brakes Yet.
By Eric Lafayette, Los Angeles, CA, October 26th 2015

In 2015 the word Employment does not have the same meaning
The leaders of the Federal Reserve System are scratching their heads and have not decided if they are going to raise interest rates in the
following months or not.
The Fed should be praised for its inaction and not feel guilty for its lack of action.
It is difficult because people who have a lot of responsibility and who have a lot of power feel extremely guilty if they do not take action
in a challenging situation. This is certainly the case now with the US economy facing many challenges. Many of the parameters of the economy are different now and even the meaning of words used to describe and evaluate economic performance are different. In 2015 the word Employment does not mean what it once did. In most people‘s minds in the USA the word employment means having a job for at least a year or two years at least and being paid a decent salary thus contributing to the buying power of the American population as a whole. Today the world Employment frequently means something different.
In many many cases Today employment could mean millions of temporary jobs and part time jobs with salaries based on $7.50 an hour.

What does the new meaning of the word Employment means for the FED? It means that the force or the trend towards inflation created by the
increase in the buying power of the American population resulting from near full Employment is not strong at all. All benchmarks and models
about statistic are irrelevant to the actual Emloyment situation. There is no need for the FED to raise interest rates now or in December.

In fact by waiting the FED is gaining an invaluable tool, it is: Clarity. The FED needs to know with certainty in what precise direction
the economy is going is and today and for the next three months the Fed will not have this knowledge. The next six months will provide the FED with many more pieces of information on the economy.
Do not forget the underlying factors around the world such as mediocre economies in China, Russia and some European countries, as well as
Brazil economy and for some countries too low an oil price. Add to this the wars that have escalated in the recent months in Syria, Libya or
wars that are linguering such as in Ukraine. All these elements are pouring a stream of cold water into the US economy and preventing the
economy to overheat from overheating.

Mrs. Yellen do not put your foot on the brakeS yet, but wait another six months to see the road ahead of you clearly and with an actual
world with so many disturbing parameters you may even want to keep your foot not far from the accelerator.

My dear friends of the FED do overcome your guilty feelings about inaction, and do not think about raising interest rates until 2016.

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ANYTHING IS BETTER THAN TO RAISE INTEREST RATES

April 15th 2015 by Eric Lafayette

IF the USA is afraid of too much inflation caused by too much available money with not enough goods or services to buy which will make the price of goods and services rise there are good solutions to fight inflation. The consensus in the USA acting through the Federal Reserve is that the USA will reduce the amount of cheap and easily available money by raising interest rates which will make borrowing money more expensive and less attractive thus limiting the amount of money available on the market because less credit equals less available money for buyers which are among others: American people, companies, government entities and so on.
Nobody wins with the exception of financial institutions when interest rates rise.

There are other and better solutions where American people win.
First solution: Raising indirect taxes a double winner .
On one hand Raising the taxes on gasoline will limit the money Americans have in their pockets which in turn will limit inflation. On the other hand with that money now in the coffers of the US government the US can now pay the US deficit starting by reimbursing our debt owned by foreign governments and then reimburse debts owned by Americans.
Second solution: Creating a new VAT (value added tax) taxes on all goods. Paying the deficit with the revenues from the taxes will also remove money from the market and will also allow the US government to reimburse debts to foreign countries and local borrowers.

It is so counterproductive to slow down inflation by raising interest rates that it almost defies common sense.
The Fed cannot be faulted because as defined by tradition, it is the Fed’s task to raise interest rates to fight inflation.
Inflation has not started yet at all in the USA but all Media are pointing to an almost certainty that the Fed will raise interest rates at the end of 2015).

Let's take an example of a good and very simple strategy to implement:
Instead of raising interest rates this in 2015 let's raise taxes on gasoline by 10 cents in September, and if there is still a threat of inflation another 10 cents in December or early next year.
An added benefit: After raising these taxes, if there is no sign of inflation at all then with the money from taxes we can build roads, repair bridges, invest in school buildings, the result being a better America and more Americans will be hired to do these jobs and so on and all Americans will benefit. In the short term one or two years we will see that inflation will be kept in check because there will be less money in the Consumer pocket. However as many new unemployed workers will get hired the unemployment rate will be lowered. These new workers will receive a salary thus having more money in their pockets and with more money in the market than available goods it will in turn raise after a year the possibility of inflation. What can we do then? Easy, we raise indirect taxes again, probably only a little bit. I have now invented a Virtuous Circle: When inflation looms, raise indirect taxes then with these taxes pay part of the debt and repair America, depending of the level of perceived danger for inflation pay more US debt or repair more infrastrucstures and vice vers. if necessary repeat, repeat as many times as necessary thus keeping inflation very low and boosting the economy of the US in general. I just demonstrated that Raising Interest Rates to Fight inflation is incredibly misguided and that Other and better Solutions are at Hand. Raising indirect taxes is a Win Win solution for the USA
Eric Lafayette
August 15th 2015

Additional letter to Janet Yellen sent on Monday September 21st 2015

Attention Janet Yellen
It is always a good feeling to be among the smart men and women. Most analysis by well-known columnists pointed to the fact that Fed chair Janet Yellen did not increase interest rates mid-September 2015 because she took into consideration a major economic instability OUTSIDE the US, namely China's economic problems. Not raising US interest rates for this specific reason was my constant advice for the last six months. It was also the advice of giant figures in economic matters such as Larry Summers and of course their voice is 1000 times more powerful than mine. We columnists write but we do not make decisions. The burden was on Janet Yellen. She showed a steady hand after having broadened the scope of her analysis to include China in it and did not yield to the many pressures from the short-term thinkers. It is always a great pleasure to see a competent captain steer with a deft hand the US ship through rough seas and reach a safe harbor.

What is next? Probably the necessity to include in the Fed analysis even more elements that are today outside the box.

Eric Lafayette, September 21st 2015
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THE FED DOES NOT NEED TO RAISE INTEREST RATES IN JUNE 2015
By Eric Lafayette March 6th 2015

The Fed led by Janet Yellen does not need to raise interest rate in June 2015.
Why?
Because of all the forces pulling down the global economy.
If all significant countries around the world are in a recession with very low growth rate or low growth rate we cannot expect overheating plus inflation of the US economy because these powerful foreign countries represent a major part of the world economy .
Picture a gigantic ocean of cold water AKA the rest of the world pouring cold water in the form of a cold shower into a lukewarm smaller ocean the US. The result is that the US economy under this cold shower will not overheat and go into inflation.
One indirect but very efficient effect of the Ocean of cold water representing under-performing economies is that the values of their currencies are being diminished, making in comparison the dollar very strong which is a significant handicap for American companies who are selling their products outside the USA. This added difficulty of increasing exportation of their products will diminish the expansion of some US companies and with less expansion comes less risks of the US economy overheating. In fact a very strong dollar is having the similar effect that a raise in Interest rates by the Fed would have. The strong dollar is cooling down the US economy and lowering the chances of inflation making it one more element that should prevent the Fed to raise interest rates in June 2015
In addition there is too much uncertainty about the conflict Russia Ukraine as well as the disastrous Greek economy . This cold shower will be felt at least for the duration of 2015 and it is not the minor changes of the US statistics showing a potential inflation that should raise any red flags. Beside increase in prices that are not visible in the near future, the most important warning of potential future inflation is Wages increase driven by the market but we are not seeing any at this time. The US economy is showing good signs of recovery but not very consistent or impressive. Help from the US government should continue and more importantly help from the Fed should continue and no interest rate raise should happen in June 2015?.
Eric Lafayette
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NO MORE WORLD CUP, NO MORE FORMULA 1 FOR PUTIN
By Eric Lafayette February 28th 2015 NO MORE WORLD CUP, NO MORE FORMULA 1 FOR PUTIN

I believe that Vladimir Putin has no morality whatsoever. He had no problem at all killing thousands of people to serve his own interests. He is in the same league as Stalin and Hitler. His absolute absence of morality and his willingness to have people massacred should be taken into account when dealing with him. His complete indifference to the slaughtering of civilians has been clearly demonstrated by the Russian soldiers disguised as volunteers following his orders and killing Ukrainian civilians. In short, no agreements for peace in Ukraine can be trusted as long as Putin is in charge. Only his removal from office will free the world, free Russia and free Ukraine.

Putin's Russia is waging a war on European Democracies. Let's show him and his supporters that there is no more room in Europe for the likes of Stalin and Hitler, and that slaughtering civilians and forcing desperate people to abandon their homes for their own safety is not acceptable. Images like those that were seen during World War II should no longer be seen anywhere in Europe. Putin is a Criminal through and through.

The best way to have Putin removed from Russia's government is to make the Russian people understand how bad he is for their interests and their way of life

We should not give President Putin the tools he needs to please his supporters. Let's not forget the main tools allowing a dictator to govern and that were so well phrased by the Roman Emperors, "As long as we give the people of Rome "Panem and Circences" they will stay quiet." Panem and Circenses translate as Bread and Entertainment. Putin's supporters made up 88% of the Russian people at the end of 2014 and enjoyed a contemporary form of Bread and Entertainment. Dictator Putin collected huge amount of money thanks to very high oil prices ( around 100 dollar a barrel of oil) and gave the vast majority of Russian people abundant and lavish " Bread and entertainment"

Recently at the end of 2014 due to a very important oil production and an economic slowdown oil prices have fallen by 50% cutting revenues to the Russian government by a conservatively estimated 20%. If you add the effects of small Economic sanctions enacted by the European Union and the USA on Russia the picture of Russia Economy is even worse. We can see that the Russian economy has entered an important recession.
In fact President Putin no longer has the money to give abundant bread to the Russian people and the Russian people will have to tighten their belts in 2015 and 2016.

Now Circences or Entertainment come into play. Putin can keep the majority of Russian people happy even if not well fed fed by providing them with lavish entertainment. When flushed with money Putin ?built many stadiums and sport facilities including Olympic sites and a brand new Formula One circuit. Now that he has all the necessary locations for entertaining Russian people he needs great championships and that's when Europe and the United States should make their strategic move and explain to their athletes and teams that they must not participate in events held in Russia. Of course the same interdiction applies to scientists and artists.

Vladimir Putin will blame the West and in the beginning Russian people will blame the West, but a long diet with not enough Bread and Entertainment will slowly but surely open the eyes of Russian people.
I believe it is a strategy that must be implemented mostly by Europe and I do not understand why it has not been yet been executed.
Putin will still beat the Drums of Russian patriotism but without Panem and Circences the music of the drums will fade quickly as it did during the cold war.
Eric Lafayette
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THE USA MUST GO BACK TO THE MOON VERY SOON
Eric Lafayette February 19th 2015, L A

President Vladimir Putin is grabbing every piece of land he can at any cost disregarding international laws. In addition he constantly vilifies the USA and shows hatred for the USA and President Obama. President Putin is taking a page from the book of the Cold War and gathering around him all the malcontent leaders of developing countries who do not fit in the sphere of Democratic leaders but are dictators or respond to his promises of business and money.

The next land that Putin's going to grab to show that he is better and more powerful than the USA is the MOON and if he succeeds in claiming the Moon for Russia and its allies he will have the additional pleasure of humiliating the USA. He will be able to sing a song that will be listened to by many countries and the title is : “How pathetic the USA have become”
IF Putin's Russians Astronauts do not reach the Moon first and claim it for them then Chinese Astronauts will land on the Moon sooner than a New wave of Americans Astronaut could and will claim the Moon for China as China is investing enormously in her quest for the Moon

Remember the USA had Americans walk on the moon more than 45 years ago?.

Since then although NASA is one of America’s most valuable assets, American strategy for exploring and conquering outer space has been a joke.Today the situation is even worse because no one has been able to articulate strong plans and intelligent priorities for NASA.
Now is the time for President Barack Obama to put his intelligence and influence in the service of NASA. NASA needs to be more than a group of wonderfully talented engineers and well trained scientist astronauts managed by too many directors going in too many directions. It needs to be a purposeful and strategic organization focused on specific strategic goals. One reality is that the Moon could become a very crucial military base for Russia.

Some of NASA’s programs such as lassoing an asteroid and landing a man on it seem almost ridiculous when compared with protecting US interests on the Moon.Vladimír Putin must be delighted to see such a scattering of efforts going in so many directions at such a gigantic cost without resulting in boosting the leadership of the USA.

Think how devastating it would be for the American people to see Russian landing on the Moon and claiming it as Russian territory. If it is not Russia it will be China, both nations have increased enormously their space budget with the goal to land on the Moon?.

If the US president does not step in and help NASA’s leadership in a significant way, the first government of the Moon will be a Russian dictatorship or a Chines dictatorship ?

The two most advanced Democratic entities in the world, the USA and Europe, are letting the Moon slip into the hands of dictators who will install military bases on the moon aimed at threatening the USA and Europe.
Eric Lafayette

Remember the USA had Americans walk on the moon more than 45 years ago?.

If the US president does not step in and help NASA’s leadership in a significant way, the first government of the Moon will be a Russian dictatorship or a Chines dictatorship ?

Addition October 7th 2015
NASA programs for going back to deep space is not progressing in a streamlined efficient way but as a sick entity progressing by hicups in a variety of directions. Let's reset the goals and this time the absolute imperative goal is Americans landing and establishing a permanent small colony with at least one American living on the Moon 24 hour a day without one second of interruption even if it means that the first American Residents on the Moon will be camping on the Moon going from one Orion like capsule to any other Orion like Capsule that the US landed on the Moon in large quantity. This first landing of Americans on the Moon must happen MUCH MUCH SOONER that the predictable date of 2025. American landed on the Moon more than 45 years ago then Americans abandoned the Moon and now they Must land on the Moon before December 2020 at the latest to beat Russia or China appropriating the Moon for themselves and building military entities there and grabbing the Moon for their country.

Adding an extract of a previous article
As Early as September 7th 2007 I wrote an article on the necessity for the US of Landing on the Moon

FIFTH ACTION: LANDING ON THE MOON.
Problem
The USA is loosing its aura of invincibility and dominance and is being looked down on by many if not most of the world.
The USA is not a rock star or a giant as it was as recently as during the Clinton Presidency.
This perception of weakness is detrimental to the USA on all fronts.

Solution: FIX IT ALL BY LANDING ON THE MOON AGAIN
Landing on the moon was a feat that only a mega-power like the USA could achieve more than 40 years ago July 20, 1969.

Landing on the moon again will frame the USA as a giant again, and it will make people now under the Islamic Fundamentalist yoke think about the strength of a democracy that interacts with a celestial object that controls their calendars. In addition such a show of strength and demonstration of cutting edge science will send a message to ambitious and aggressive countries such as China and Russia. The message is: The USA is still the leader in scientific exploration and a Gentle giant way ahead of you.

It will also be a giant advertisement for American products no competitor can yet match.

Letting China which is working hard at landing on the moon lands before the US returns is pure folly
Funding: Already funded but on a wrong direction plus money from the Department of Defense.

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COMMERCIAL DRONES, A BRIGHT FUTURE FOR TERRORISTS

Why is the White House and the FAA facilitating the task of an ever growing terrorism?
I believe that there is no better time than NOW after the Massacre by terrorists in France of Journalists at Charlie Hebdo to listen to my Warning. 2015 begins, it is imperative to be aware of the most significant and dangerous threats in the future. I am talking about Commercial Drones. The decision by the government to allow these Drones to fly over the USA is to be made very, very soon.
My warning is: " COMMERCIAL DRONES ARE THE BEST KILLING TOOLS FOR TERRORISTS" as Commercial Drones can replicate dozens of Smaller 9/11 attacks

Forbidding Commercial drones flying over the USA is extremely Urgent as the Obama administration is going to release regulations in the next weeks or days.
The FAA is poised to grant powerful civilian drones that are able to transport important loads the authorization to fly over the USA in coming weeks and months. This insanity has the potential to create numerous 9/11 style attacks. Imagine the joy of terrorists in the United States who are been given perfect tools to slaughter Americans so much potential to kill a small number of people or a large number of people with ease and efficiency. Terrorists will be able to attach a regular grenade that is easy to buy and drop it in a school playground. Terrorists will be able to attach a payload made of high-level explosives and nails to a couples of drones and drop the charges on the crowd of an outdoor concert.
People forget that a commercial drone can be in the shape of a small airplane, take off from any street or alley and delivers miles away a payload of more than 50 pounds of explosive ( today helicopter style drones can carry 20 pounds of powerful explosives). No amount of regulation intended to make flying drones safer is ever going to be efficient.
I repeat:
NO AMOUNT OF REGULATION INTENDED TO MAKE FLYING LARGE DRONES SAFER IS EVER GOING TO BE EFFICIENT.

If President OBAMA authorize COMMERCIAL DRONE flying over the USA he will be the FATHER OF MODERN TERRORISM.
Below is an example of what could happen in the future.
COMMERCIAL DRONES A BRIGHT FUTURE FOR TERRORISTS
"On the same day Amazon is going to deliver safely to a nice family a wonderful set of DVDs about our beautiful country the USA and a Terrorist is going to deliver to a nice audience in the bleacher of a Stadium a couple of bombs that will kill and injure more than one hundred people."
We need a safe USA without big or commercial drones.

O MORE WORLD CUP, NO MORE FORMULA 1 FOR PUTIN

The best way to have Putin removed from Russia's government is to make the Russian people understand how bad he is for their interests and their way of life