Tag Archives: Federal Reserve

Tick Tock, by Jim Quinn

It’s only a matter of time before it all blows up. It’s probably already started. From Jim Quinn at theburningplatform.com:

“This country, and with it most of the Western world, is presently going through a period of inflation and credit expansion. As the quantity of money in circulation and deposits subject to check increases, there prevails a general tendency for the prices of commodities and services to rise. Business is booming. Yet such a boom, artificially engineered by monetary and credit expansion, cannot last forever. It must come to an end sooner or later. For paper money and bank deposits are not a proper substitute for non-existing capital goods. Economic theory has demonstrated in an irrefutable way that a prosperity created by an expansionist monetary and credit policy is illusory and must end in a slump, an economic crisis. It has happened again and again in the past, and it will happen in the future, too.” – Ludwig von Mises – 1952

Image result for recession

As the von Mises quote proves, economic cycles, artificial booms created by Federal  Reserve easy money and delusional human nature are cyclically constant across the decades. Anyone with an ounce of critical thinking skills realizes the current artificial boom, created by a feckless Fed captured by Wall Street banks and corrupt Washington politicians who took Dick Cheney’s “deficits don’t matter” mantra to obscene levels, will end in another financial crisis. Our Deep State controllers have “solved” a financial crisis caused by too much debt by tripling down on more debt.

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“The Federals Are Coming!” by Jeff Thomas

The next financial crisis will bring a general clamoring for the government to do something, which always translate to more power for the government and less for its subjects. From jeff Thomas at internationalman.com:

Americans were taught about Paul Revere’s ride in school. He was said to have ridden from his home in the North End of Boston, to Lexington and Concord, to warn the people there that Federal troops had landed in Boston Harbour and would soon reach the townships.

Of course, the story was tarted up a bit for the history books. First, it’s unlikely that he shouted, “The British are coming,” since, at the time of the ride, in 1775, he was in fact British – a British colonial – and would have regarded himself as British, as would the townspeople.

It’s also unlikely that he galloped through the towns shouting, “To arms! To arms!” since a major portion of the British colonists, particular those who were older and had a lot to lose, were loyalists, and taking up arms would be treasonous. (At that time, treason was one of only two capital crimes.)

So, what did he shout on his ride… or did he in fact shout anything? It’s more likely that he simply went to the back doors of select sympathisers and asked them to spread the word that the Federal troops were on the way. But, of course, that would have made for a far less colourful story.

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The Broken Clocks’ Minute, by Robert Gore

Sometimes the reasons you’re wrong turn out to be the reasons you’re right.

Even a broken clock is right twice a day.

Old Wall Street adage

Anyone who has consistently sounded cautionary or outright bearish notes during the last nine years of relentlessly rising equity markets has been cast aside. Wall Street is bipolar. You’re either right or wrong, and wrong doesn’t buy mansions and Maseratis. Like that broken clock, the so-called permabears have had a couple of minutes when they were right, far outweighed by those 1438 minutes when they were wrong.

Or maybe it’s all a matter of perspective, and it’s the last nine years that amounts to two minutes. In geologic time nine years isn’t even a nanosecond. Perhaps even on time periods scaled to human lifetimes and history, the last nine years will come to be seen as an evanescent flash that came and ignominiously went.

Markets don’t listen to reasons. They’re exercises in crowd psychology and crowds are emotional and capricious. That doesn’t mean that reason is a useless virtue in market analysis, quite the opposite. It’s reason that allows the few who are consistently successful to separate themselves from the crowd and capitalize on its emotion and caprice.

Reason identifies rising stock markets as one symptom of a sugar high global economy. Since 2009, staring into the abyss of debt implosion, central banks acting in concert have promoted furious debt expansion as the finger-in-the-dike remedy. Governments expanded their fiat (aka out of thin air) debt, and central banks monetized that debt with their own fiat debt. Not only did that create loanable reserves within the banking system—private debt fodder—it drove interest rates so low that yield-deprived investors were herded into the stock market. Borrowers won, savers lost.

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Rock the Vote, by James Howard Kunstler

Regardless of political antics, the nation is headed towards a cataclysmic crash. From James Howard Kunstler at kunstler.com:

It warmed my heart to read in The Wall Street Journal that Hillary Clinton is preparing to re-enter the Washington DC swamp from her deluxe exile in the woods of Chappaqua, New York, and make another run for the White House — though it’s hard to calculate how many porters in sandals and loincloths will be required to lug all her baggage around the campaign trail. Will hubbie hit the hustings with her? That would be rich. I can just imagine the pussy-hatted legions shrieking #MeToo at every stop. Surely there is no better way to put the Democratic Party out of its misery.

The post-election melodramas in Georgia and Florida grind on, despite the various rules and laws about deadlines for certifying ballots and accounting for their origin. What is a ballot after all but a mere scrap of paper, easily reproducible, and interchangeable. Sometimes, they make strange journeys out of election headquarters in trucks and SUVs, seeking fun and excitement, and they have been known to mysteriously turn up by the hundredweight in broom closets where they retreat to caucus. Only one thing is certain: the ballot fiasco is a billable hours bonanza for DC lawyers arriving on the scene to sort things out — which they may not manage anyway.

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Hilarious How Wall-Street Crybabies Whine about the Fed’s QE Unwind after a Decade of “Wealth Effect”, by Wolf Richter

Wall Street feels it has an “entitlement” to perpetually rising markets. From Wolf  Richter at wolfstreet.com:

Their “Everything Bubble” is being pricked “gradually,” and they don’t like it.

Wall Street has been moaning, groaning, and crying out loud about the Fed’s current monetary policies – raising rates and unwinding QE. They fear that these policies will undo the Fed’s handiwork since the onset of QE and zero-interest-rate policy in 2008, now called the “Everything Bubble” (stocks, bonds, “leveraged loans,” housing, commercial real estate, classic cars, art…). In an effort to pressure the Fed to back off, they’re accusing the Fed of making a “policy mistake” and creating “scarcity” of bank reserves.

Here is Bloomberg News this morning. It’s really cute how this works. This is how the article starts out: “Fixed-income traders are telling the Federal Reserve that it might end up making a big policy mistake.”

These folks cannot say that the Fed’s QE unwind and higher rates might unwind some of the wealth of asset holders that resulted from the Fed’s desired “wealth effect.” That would be too clear. So they have to come up with hoary theories to back their “policy mistake” theme. This time it’s the theory of a “scarcity of bank reserves.”

When these folks talk about “scarcity,” what they mean is that they have to pay a little more. In this case, banks are having to pay more interest to attract deposits.

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Three Events That Could Change The Face Of America, by Brandon Smith

The three events are Jamal Khashoggi’s murder, the immigrant caravan, and Trump’s war with the Federal Reserve, if you’re looking for the short version of the story. From Brandon Smith at alt-market.com:

The past year in general has been a firestorm of news events, many of them misrepresented by the mainstream media but nevertheless important signals that the economic, social and geopolitical systems we are familiar with are changing or destabilizing rapidly.  It is important to understand, however, that the implications of these events have been building for YEARS, not for mere weeks or months.  They are not sudden and inexplicable consequences of “linchpin theory”, the outcome of these events was pre-planned and engineered far in advance.

This does not mean that establishment interests including globalists will necessarily get what they want.  Which is why I believe they tend to produce multiple crises at once, hoping that at least a few will produce the effects they desire in the population.  I call it the “scattershot strategy”; by creating a swarm of manipulated “bullets” of social/psychological leverage each with the same intended target, the result becomes more certain and predictable.  Much like smashing troops into the same point in a line of defense over and over again – eventually it is more likely to break where you expect it to break.

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Love, Marriage, Debt and Infidelity, by Dave Walden

Banking and politics may not be a marriage made in heaven, but it has certainly endured. From my friend Dave Walden:

Friends:

Trump is now publicly engaged in criticizing the Fed.  Apparently, he is doing this because of the slow but steady rise in interest rates.  In terms of my response, I prefer to ignore such theater and look at “the bigger picture.”

As issues de jour come and go, with Trump revered or reviled as hero or villain, the remorseless threat to all pretense continues its quiet advance.  Should it suddenly be awakened from its seeming complacency – whether during Trump’s reign or following it, blame for the turmoil and destruction it will precipitate must always be placed where it is most deserving.

“Economic” affairs dominate and DRIVE most of human affairs.  Certainly not all affairs, mind you, affairs of the heart can, and do, rise to play dominant roles as well, but they tend to arise after survival is assured through the success of one’s personal, “economics.” 

At the very center of all economic affairs, because it represents the time, efforts, and the results/products of a Human Beings life, remorselessly and immovably sits, “money.”  Resting confidently astride this money, in control of not only their own – earned honorably or otherwise, but of significant amounts of what others have also earned, presides the “banker.” 

This leads to what I have determined to be a critical distinction.  For the purpose of this brief missive, consider economics to be an “affair of the mind.”  Rational because, as I stated above, economics deals with actual survival.  Conversely, consider “affairs of the heart” to encompass those human values that, in summation, “make life worth living.” Importantly, though there are values common to all of us, a life worth living remains for each of us to independently determine, just as is our choosing of one’s particular economic means of survival.

Earning respect, and its ultimate expression, love, seems a common denominator in “affairs of the heart.”  For some among us however, EARNING them is either thought impossible, or it becomes “fearfully” tenuous or uncertain.  In response to this apparent fact, depending on other critical psychological factors, there arises among us those who become insistent and DEMAND that they be PROVIDED such things, thereby perverting the concept of “earned.”

It is in response to this phenomenon, at least for the purpose of this missive, that the politician emerges.

We have little insight into “who” financed Alexander the Great, Genghis Khan, or any of the other political thugs of early history.  Their success, by some measure, was “financed” – as well as made possible by, plunder.  However, since the Renaissance, and the historical record available therefrom, we have witnessed the rise of “modern” banking.

The financing of Columbus, with the endless subsequent financial arrangements that were to make possible the exploration and colonization of the New World, all involved banking, bankers, and their providing of credit.

There is perhaps, no more-famous examples of bankers than the Rothchild family.  A combination of fact, myth, and legend surrounds them, with the means/extent of their centuries-old family fortunes endlessly cited.  This leads to the point of this article.

In America, the time-honored marriage between bankers and politicians was formalized in 1913.  In  exchange for the bankers taking the vow to finance whatever the politicians might wish to spend, the politician took the vow to assure that the banker would have sole authority to control the price and availability of money and credit.  In consummating these prenuptials, both partners joined the ranks of virtually all politicians and bankers throughout recorded history.  The result(s) of this marriage will be little different than all others that have come before.

To a significant degree and as a group, the professionals who understand money and credit, at least those who wish to retain and grow it, know their business.  It is, after all, “an affair of the mind,” NOT one of the heart – whatever descriptive noun might be applicable to any among them.  Conversely, the endless politicians who must inextricably tie themselves to those to whom they have exchanged their corrupt vows, are exclusively dominated by those engaging in “affairs of the heart” – in this case, the attempt to COMMAND/LEGISLATE respect and “love.”

In such a contest, between those who actually know what is going on, as opposed to those who have been led to believe they “know,” the “winners” become obvious.  Under the illusion/delusion that they, the politicians, are in control, it is those engaged in “affairs of the mind” who always actually retain control.  They understand the folly unleashed by said politicians, because unlike the politicians, they are engaged in “affairs of the mind.” Always mindful to remain in a position to best survive – irrespective of whatever the particular delusions of their marriage partner(s)” folly, or their own “infidelity” to the immutable laws of their craft.

It is the banker(s) who can be expected to always demonstrate the most successful use of “bid” and “ask” – however such “spreads” are to become defined.  Because this timeless phenomenon is now occurring in the 21stcentury, it must be defined as being worldwide – just as the early Rothchilds saw it as having grown to include all of Europe..

When the debt made possible by the marriage made-in-hell finally shatters the illusions/delusions upon which it is built, Trump – or whoever may be at the helm, will be judged as having been responsible.  It will not matter one wit that he was but the latest in a long line of political “soul mates” that came before him that were equally culpable, as they sought their own particular versions of respect and love.  Meanwhile, the banker(s), wherever they may reside, in whatever form their “money” – safely secured in whatever manner, the banker(s) shall retain their treasure.

When the marriage is inevitably dissolved, dissolved by the inevitable results of the infidelities in which both have been engaged, it is the bankers, as is always the case, who will assure that their “settlement,” remains intact.  For in this annulment and divorce, there will be no alimony – for ANY of the rest of us.

Dave