Gross is not the issue

In his September 23, 2015 commentary entitled "Saved by Zero", Janus manager Bill Gross seems to second guess the Fed's zero interest rate actions without taking a position.

He reports that

"Ken Rogoff and Carmen Reinhart have meticulously documented periods of 'financial repression', long stretches of years and in some cases decades where short-term and even long-term yields were capped and suppressed below the level of inflation."

... but does not object to financial repression or interest rate suppression in principle ... just in application.

He alleges as

"fact that while 0% or .25% or other countries’ financially suppressed yields might be appropriate for keeping their economy’s head above water, they act as a weight or an economic “sinker” that ultimately lowers economic growth as well."

... but asks only for this to be acknowledged in the minutes of a central bank meeting.

He appears convinced that

"zero bound interest rates destroy the savings function of capitalism, which is a necessary and in fact synchronous component of investment."

... but is willing to settle for something that lets that vital savings function "survive – if only on a shoestring."

Finally, he laments that

"Mainstream America ... [is] on a revolving spit, being slowly cooked alive while central bankers focus on their Taylor models and fight non-existent inflation."

... but feels called only to give his "advice" to the financial malefactors.

Laws are not Fashions ... or vice versa.

The reason most people lose their way and wander in endless cycles when seeking to understand the role and effect of central banking is that they fail to distinguish between what is legal and what is fashionable.

• Laws connect the fundamental and invisible principles of social order with the unavoidable and obvious consequences that arise from obeying or violating them as evidenced by history.
• Fashions link anticipated but mutable human perceptions with the assumed but uncertain human actions that may give rise to them which only time can show to be true or false.

Mr. Gross does nothing other than deal in an unprincipled manner with central banking fashions. He fails to grasp that the real issue is

• not whether he [or anyone else] perceives the outcomes of central bank actions to be desirable
• but rather whether the actions of the central bankers are legal or illegal.

 Law enables freedom. Fashion incites tyranny.