By Craig R. Smith, Author/Chairman, Swiss America

After listening to Fed Chairman Janet Yellen's statement justifying the increase in interest rates for the first time in nearly a decade, I am convinced her ability to contradict herself rivals that of President Barack Obama.

Yellen began her statement by saying all of the Fed objectives have been met to justify increasing interest rates from 0-.25% rate to .25-50% based on "anticipations" and "expectations". So, it is not that the economy has actually met the benchmarks, but it's what she expects in the future.

After nearly seven years of the Fed's experimental zero interest rate policy (ZIRP) here is what we now have to show for it ...

santa -Less than 2% GDP economic growth
-Home ownership has dropped 3.6%
-Student loans have increased 103%
-Consumer debt has increased 34.6%
-Big banks are now 30% bigger
-The Dow stock index is up 96.3%
-Government debt up 96.3% to $18.8T
-Labor participation rate is far below "historic norms"

This is not the robust recovery so often promised to our nation by both Janet Yellen and her predecessor, Ben Bernanke.

Yellen went on to say she expects inflation of .4% in 2015, 1.6% in 2016, 1.9% in 2017 and 2.00% in 2018. She "anticipates" FED funds rate to be 1.5% by late 2016, 2.5% in 2017 and 3.25% in 2018.

I'd say this qualifies as either great expectations or grand delusions. What could she and her unanimous Fed governors see that nobody else sees?

According to Yellen, "What Americans should realize is the FED decision today reflects our confidence in the U.S. economy. That, um, we believe we have seen substantial improvement in the labor market conditions and while things may be uneven across regions, um, of the country and different industrial sectors, we see an economy that is on a path of sustainable improvement."

One word comes to mind in response to this: delusional!

Ms. Yellen hopes this symbolic upward interest rate hike will demonstrate to the world that the Fed is very confident all is well in the U.S. What planet is she living on?

Meanwhile, the FED balance sheet expansion to nearly $5T has produced a domestic and global slowdown. Yellen says the FED has done its job and has helped the national recovery - which includes U.S. GDP still under 2% in 2015 and an expectation of 2.25% growth in 2016. Does just above stall-speed economic growth sound like the Fed is doing a "good" job for the American people? Not in my book.

Yellen believes zero interest rates actually helped to retard the economy and nearly stall the recovery. However, she claims the Fed is doing a terrific job of being accommodating.

This Fed chairman is clearly focused on making the folks on Wall Street a ton of money, while draining what little wealth is left for middle class and forcing them to invest in risk-based investments.

One hopes the new president in 2017 will install sane leadership at the FED; someone willing to make the tough decisions necessary to address our anemic growth, our $200 trillion long-term liabilities and establish sound policies that will encourage real recovery and economic growth in America.

God Bless America. We desperately need it.

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