The chart below crystalizes why the Fed is stranded in a monetary no man's land. By the time of next week's meeting the federal funds rate will have been pinned at about 10 bps, or effectively zero, for 84 straight months.

Yet during that same period, the consumer price level has risen by 1.75% per year. And that's if you give credit to all of the BLS gimmicks, such as hedonic adjustments for quality change, homeowners "imputed" rents and product basket substitution, which cause inflation to be systematically understated.

On a basis that is close enough for government work, therefore, the real money market interest rate has been negative 2% for seven years. But that's so crazy, unjustified, and unprecedented that even the Keynesian money printers who run the Fed have run out of excuses.

Presumably, Yellen and her posse know that we did not have seven years running of negative real money market rates even during the Great Depression of the 1930s.

So after one pretension, delusion, head fake and forecasting error after another, the denizens of the Eccles Building have painted themselves into the most dangerous monetary corner in history. They have left themselves no alternative except to provoke a riot in the casino——-the very outcome that has filled them with fear and dread all these years.

Indeed, Yellen and Bernanke before her have made a huge deal out of communications clarity and forward guidance. But how do you explain to even the credulous gamblers and day traders on Wall Street that the business cycle has not been outlawed and that free money can not last forever, world without end?

Likewise, after all these years of saying that the dollar's exchange rate is the responsibility of the US Treasury— and that the Eccles Building only does domestic monetary policy—– how will the Fed heads explain that they have wrapped themselves around the axle of an unrelentingly strong dollar?

And that they are impotent to stop the gale force of global deflation and recession being imported into the domestic economy by the inexorable unwinding of the massive dollar short that they have spent years fueling?

For years now the dollar has been a "funding" currency in the global casino—-something the gamblers borrowed or effectively sold short in order to pile into higher yielding EM debt, equities and commodities until they peaked awhile back.

But the fantastic global credit bubble summarized below has now reached its apogee. China and the EM economies are rolling over into a debilitating deflation, thereby catalyzing the mother of all margins calls. This time subprime is lettered in Chinese and speaks with a Portuguese accent.

This time the correction will not be in the overbuilt and over-valued domestic (and other DMs like Spain) housing market. Instead, there will be a global CapEx depression and its contractionary cascade will cause the entire global economy to shrink for the first time since the 1930s.

In fact, it is already happening, even by the lights of the IMF. The world's nominal GDP has dropped 5% in dollar terms during the past year, and that's what counts because the world's $225 trillion tower of debt is heavily denominated in dollars, or linked to it through exchange rates, most especially the Chinese RMB.

But unlike the short-lived recessionary dips of the past, the southward turn in the graph below still has a long way to go. Brazil is plunging into its so-called hard-landing and China is not far behind—-along with its supply chain and DM materials exporters like Canada and Australia.

Figure 1. Gross Planet Product at current prices (trillions of dollars, 1980 – 2015)

Source: IMF World Economic Outlook Database, October 2015.

Shrinking GPP (Gross Planet Product) is not even in the Fed's vocabulary yet, and even when they do latch on to it, they won't dare explain it honestly and cogently.