Systems theorist/anthropologist Gregory Bateson developed (with others) the concept of double bind, a psychological and social conflict in which contradictory demands generate a form of schizophrenia:

Unlike the usual no-win situation, the subject has difficulty in defining the exact nature of the paradoxical situation in which he or she is caught. The contradiction may be unexpressed in its immediate context and therefore invisible to external observers, only becoming evident when a prior communication is considered. Typically, a demand is imposed upon the subject by someone who they respect (such as a parent, teacher or doctor) but the demand itself is inherently impossible to fulfill because some broader context forbids it. For example, this situation arises when a person in a position of authority imposes two contradictory conditions but there exists an unspoken rule that one must never question authority.

The Federal Reserve's communications and policies are a form of crazy-making double bind. No wonder the economy and everyone participating in it are beset by various manifestations of mental and physical illness.

On the one hand, the Fed insists the economy is expanding and all is well. If this is true, then the Fed should allow interest rates to normalize, i.e. be unleashed from the Fed's financial prison and allowed to rise to whatever the market of borrowers and lenders sets as fair in the current climate.

But the Fed also insists that it cannot allow rates to rise. If this is true, then it means the economy is weaker than the Fed would have us believe.

These are contradictory, but the Fed would have us believe both conditions are true. The Fed's job as the authority figure is to convince us the economy is expanding at a healthy clip, but interest rates cannot be allowed to rise because the economy is fragile and ill.

This makes no sense, but the Fed insists on maintaining this crazy-making double bind because the stock market depends on both conditions being true at the same time: the economy must be expanding so profits can loft ever higher, but the economy must also be weak and ill so the Fed will continue its policies of zero interest rates (ZIRP) and free money for financiers that have pumped trillions of dollars into "risk-on" assets like stocks.

If either of these contradictory conditions is erased, the stock market will tumble, as neither a weak, recessionary economy nor zero interest rates (ZIRP) alone is sufficient to maintain the stock market's current sky-high valuations: profits must continue rising and rates must stay zero to enable carry trades, stock buy-backs, and all the other financial finagling that has driven stocks into the stratosphere.

The Fed is attempting to bridge the schizophrenic contradictions of its policies and communications by blaming the "poor labor market". Just as in families that choose one child--usually the "misbehaving" or "rebellious" one--to be the scapegoat for all the family's sociopathologies, the Fed has designated the labor market as the scapegoat for the economy's schizophrenia: If only the labor market was as strong as the rest of the economy, we could allow rates to normalize.

But this is as bogus and crazy-making as everything else the Fed says and does: how can an economy in which wage-earners are losing purchasing power and jobs growth lags population growth be expanding as robustly as the Fed claims?

The Fed's crazy-making double bind serves to enforce obedience without overt coercion. Nobody made you buy those risk-on assets, buddy; if the bubbles all pop, you've got nobody to blame but yourself.

But this is crazy-making in the extreme, as the Fed has done everything in its considerable power to push everyone into speculative risk-on assets while funneling a steady skim to the big banks at the expense of savers and households.

The ultimate Fed crazy-making double-bind is this: you can't live without us, your financial Overlords who keep you safe from recession and the volatility of creative destruction, but you can't be free or prosperous with us in control.

And so the crazy-making continues, a steady drip of contradictory communications and claims, one masterful display of schizophrenic-inducing propaganda after another, month in, month out, year in, year out.

Thus we can anticipate Crazy-Maker in Chief Janet Yellen will lace her speech at the Jackson Hole confab with enough contradictory contexts and explanations to maintain the nation's sad schizophrenic malaise. And like all the other poor souls trapped in a double bind, we will love our servitude to the Fed even as it slowly strangles our clarity, purpose, liberty and ability to navigate an unmanipulated world.

Administrative note: I apologize for the lack of email response; the past few weeks have been brutal and my time online has been extremely limited. Thank you for your understanding and patience.