Tag Archives: Federal Reserve

Home Alone—Trump Is The Kevin McCallister Of American Politics, by David Stockman

Having made an implacable enemy of the political establishment, and having then surrounded himself with team members who don’t have his best interests at heart, President Trump is all by himself in Washington. From David Stockman at lewrockwell.com:

It’s as if on election night the shocked and exasperated rulers of the Imperial City ordered Donald Trump to sleep in the White House attic. Unlike Kevin McCallister’s family in the movie, however, the establishment never stopped obsessing about his bratty insolence and never intended for him to rejoin the family the next morning—or ever.

Instead, the Washington political establishment and its collaborators in the main stream media are engaged in an unabashed and unconcealed campaign to remove the Donald from even the figurative White House attic where he now dwells with his Twitter account.

The evidence for that lies right in the threadbare and preposterous pretext for this de facto coup. Namely, the alleged Russian meddling and collusion campaign, which took another body-slam this morning in the form of son-in-law Jared Kushner’s written congressional testimony about the Trump campaign’s now endlessly ballyhooed June 2016 meeting with the “Russians”.

That this meeting was a giant nothingburger should have been evident enough from the politically illiterate email of the meeting’s arranger, Rob Goldstone. The latter was a former British tabloid journalist and Vodka-chugging music world pimp, who happened to be under contract with Emin Agalarov, the Russian pop star.

“Emin”, as he is known Madonna-style, also happens to be the son of a Moscow real estate billionaire who had provided the venue for Trump’s 2013 Miss Universe contest, and has since become a pal of sorts of Donald Jr. But as it happened, the promised dirt on Hillary was only the come-on for the meeting.

The real reason is plain as day. The elder Agalarov’s company, the Crocus Group, was having trouble with the Magnitsky Act and wanted its hired attorney-advocate, one Natalia Veselnitskaya, to make a pitch on the matter to the Trumps.

To continue reading: Home Alone—Trump Is The Kevin McCallister Of American Politics

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The Federal Reserve Is A Saboteur – And The “Experts” Are Oblivious, by Brandon Smith

The Federal Reserve, according to Brandon Smith, is hell-bent on deliberately destroying the US economy. From Smith at alt-market.com:

I have written on the subject of the Federal Reserve’s deliberate sabotage of the U.S. economy many times in the past. In fact, I even once referred to the Fed as an “economic suicide bomber.” I still believe the label fits perfectly, and the Fed’s recent actions I think directly confirm my accusations.

Back in 2015, when I predicted that the central bankers would shift gears dramatically into a program of consistent interest rate hikes and that they would begin cutting off stimulus to the U.S. financial sector and more specifically stock markets, almost no one wanted to hear it. The crowd-think at that time was that the Fed would inevitably move to negative interest rates, and that raising rates was simply “impossible.”

Many analysts, even in the liberty movement, quickly adopted this theory without question. Why? Because of a core assumption that is simply false; the assumption that the Federal Reserve’s goal is to maintain the U.S. economy at all costs or at least maintain the illusion that the economy is stable. They assume that the U.S. economy is indispensable to the globalists and that the U.S. dollar is an unassailable tool in their arsenal. Therefore, the Fed would never deliberately undermine the American fiscal structure because without it “they lose their golden goose.”

This is, of course, foolish nonsense.

Since its initial inception from 1913-1916, the Federal Reserve has been responsible for the loss of 98% of the dollar’s buying power. Idiot analysts in the mainstream argue that this statistic is not as bad as it seems because “people have been collecting interest” on their cash while the dollar’s value has been dropping, and this somehow negates or outweighs any losses in purchasing power. These guys are so dumb they don’t even realize the underlying black hole in their own argument.

To continue reading: The Federal Reserve Is A Saboteur – And The “Experts” Are Oblivious

 

Creating Another “Crash of 1929” by Jeff Thomas

There are already similarities between the present day and 1929. Jeff Thomas opines there may be more. From Thomas at internationalman.com:

Regarding the Great Depression… we did it. We’re very sorry… We won’t do it again.

– Ben Bernanke

Waiting too long to begin moving toward the neutral rate could risk a nasty surprise down the road—either too much inflation, financial instability, or both.

– Janet Yellen

In his speech above, future Federal Reserve Chairman Ben Bernanke acknowledged that, by raising interest rates, the Fed triggered the stock market crash of 1929, which heralded in the Great Depression.

Yet, in her speech above, Fed Chair Janet Yellen announced that “it makes sense” for the Fed to raise interest rates “a few times a year.” This is a concern, as economic conditions are similar to those in 1929, and a rise in interest rates may have the same effect as it did then.

So let’s back up a bit and have a look at what happened in 1929. In the run-up to the 1929 crash, the Federal Reserve raised rates to 6%, ostensibly to “limit speculation in securities markets.” As history shows, this sent economic activity south rather quickly. Countless investors, large and small, who had bought stocks on margin, would be unable to pay increased interest rates and would be forced to default. (It’s important to understand that the actual default was not necessary to crash markets. The knowledge that investors would be in trouble was sufficient to send the markets into a tailspin.)

Mister Bernanke was quite clear in 2002 when he stated that the Fed would not make the same mistake again that it made in 1929, yet, then, as now, there’s been a surprise victory by a Republican candidate for president. Then, as now, a wealthy man who had never held elective office was unexpectedly in the catbird seat and had the potential to endanger the control of the political class, at a time when that political class had been complicit in damaging the system by creating massive debt.

To continue reading: Creating Another “Crash of 1929”

Bond “Carnage” hits Mortgage Rates, Aims at Housing Bubble 2, by Wolf Richter

The relationship between the housing market and higher interest rates isn’t as straightforward as many people think. Sometimes rates rise and the housing market does well for the same reason: the economy is strong. Interest rates probably hit bottom in July, 2016, and have embarked on a long-term rising trend. It remains to be seen how that will affect the housing market. From Wolf Richter at wolfstreet.com:

“Many fear the Fed is behind the curve. The market is even further behind: This is clearly a dangerous situation.”

US government debt took another beating today. As prices fell, yields rose to new multi-year highs. The 10-year Treasury yield rose 5 points to 2.625%, the highest since September 2014, when it just briefly kissed that level. At this pace, the yield will soon double from the record low of 1.36% in July last year.

This chart shows the progression of the 10-year Treasury yield since late August (chart via StockCharts.com):

When yields were surging maniacally in November and December – broadly called the “bond massacre” or the “bond meltdown” or similar – I pontificated that eventually yields would fall back some, “on the theory that nothing goes to heck in a straight line.” And they did start falling back in mid-December. But that three-month breather has now been totally undone.

Two-year Treasuries took it on the chin too today, and the yield jumped to 1.40%, the highest since June 2009.

To continue reading: Bond “Carnage” hits Mortgage Rates, Aims at Housing Bubble 2

The World Is Turning Ugly As 2016 Winds Down, by Brandon Smith

Brandon Smith reasserts his hypothesis that disaster is coming and the globalists want Trump to win so they can blame it on him and his liberty-minded and conservative supporters. If the Federal Reserve Open Market Committee, contrary to market expectations and the clearly deteriorating economy, raises the interest rate target on overnight fed funds next week, as Smith expects, then the plausibility of this hypothesis goes way up, although it probably doesn’t kill it if the FOMC stands pat. From Smith at alt-markets.com:

I have to say that the negative reverberations in our current economic and political environment are becoming so strong that it is impossible for people to not feel at least some uneasiness in their gut. I imagine this is the same kind of sensation many felt from 1914 to 1918 during World War I and the terrible birth of communism, or perhaps in the early 1930s at the onset of the Great Depression and the rise of fascism. Some global changes are so disturbing that they send shockwaves through the collective unconscious before they ever hit the mainstream. People know that something is about to happen, even if they cannot yet clearly define it.

At the beginning of August in my article “2016 Will End With Economic Instability And A Trump Presidency” I stated that:

“I believe a softer downturn will begin before the election (the U.S. presidential election) takes place, most likely starting in September. This will give a boost to the Trump campaign, or at least, that is what the polls will likely say. I would also watch for some banking officials and media pundits to blame this downturn on Trump’s rise in the polling data. The narrative will be that just the threat of a Trump presidency is “putting the markets on edge.”

Unfortunately, it would seem so far that this prediction was correct. Currently global markets have crossed into severe volatility with a vengeance after around three months of eerie calm. Why? Well, as I warned in the same article linked above as well as numerous others since the beginning of this year, the Federal Reserve is determined to continue raising interest rates into a recessionary environment as they almost always do, and equities markets addicted to cheap debt cannot tolerate even one additional rate hike from the central bank.

So far all evidence suggests that the Fed plans to raise rates again soon; I believe at the end of this month. The only seemingly “anti-hike” voice at the Fed so far has been board member Lael Brainard, but even her statements promote a false narrative that a America is on track to “recovery”.

Many normally “dovish” members of the Fed have openly suggested that now is the time to hike. Voting members at the Fed have been vocal about a shift in policy. The latest example being head of the Bank of Cleveland, Loretta Mester. She argues that rates have remained “too low for too long,” and rejected notions that lower rates are necessary to maintain stability.

This is the same kind of language Fed members used right before the rate hike in December 2015, the first rate hike in around a decade. And, to add to the fervor, even JP Morgan Chase head Jamie Dimon is calling for interest rates to rise.

Get ready folks, because all the naysayers that claimed another rate hike is “impossible” are probably about to be proven wrong yet again.

My warning on an accelerating Trump campaign being blamed for weak stock markets has also come true. Already, Bloomberg is launching the meme that the idea of Hillary Clinton losing the election to Trump “because of her health” is a “landmine for vulnerable markets.”

This is some incredible spin by the elitist controlled media, but again, very predictable. The globalists are setting the stage to blame the economic collapse they created on conservative movements. Clinton’s “health issues” are being set up as the scapegoat for a Trump win, which conjures additional social unrest as many on the Left will argue (in the event of a Trump win) that Trump prevailed on a technicality. That is to say, the extreme Left will argue that Trump’s presidency is not legitimate.

To continue reading: The World Is Turning Ugly As 2016 Winds Down

The Fed Launches A Facebook Page… And The Result Is Not What It Had Expected, by Tyler Durden

This is probably the first time the Federal Reserve has received this kind of negative feedback; it gets nothing but adulation from the press and financial market participants. From Tyler Durden at zerohedge.com:

While it is not exactly clear what public relations goals the privately-owned Fed (recall Bernanke’s Former Advisor: “People Would Be Stunned To Know The Extent To Which The Fed Is Privately Owned”) hoped to achieve by launching its first Facebook page last Thursday, the resultant outpouring of less than euphoric public reactions suggest this latest PR effort may have been waster at best, and at worst backfired at a magnitude that matches JPM’s infamous #AskJPM twitter gaffe.

Here are some examples of the public responses to the Fed’s original posting: they all share a certain uniformity…

To continue reading (further non-complimentary comments): The Fed Launches A Facebook Page… And The Result Is Not What It Had Expected

The Fed’s Doomsday Device, by Bill Bonner

The Bill Bonner version of debtonomics, and one of the few that at least partially gets the difference between real money and fiat debt. However, he errs when he says that banks create money when they create loans. They create debt. See “Real Money,” SLL. From Bonner, at acting-man.com:

Bezzle

BALTIMORE – Barron’s, in a lather, says the market is facing the “Two Horsemen of the Apocalypse.” Huh?

Supposedly, the so-called Brexit – the vote in Britain this Thursday on whether to leave or remain in the European Union (EU) – and uncertainty over where the Fed will take U.S. interest rates are cutting down stocks faster than a Z-turn mower.

But Brexit is a side show. As our contacts in London explained in last week’s issue of Bonner & Partners Inner Circle, Britain will do just fine outside of the EU. It will even thrive.

As for the Fed’s fumbling, it is a consequence, not a cause, of falling stock prices. The real threat to this market is more basic, more dangerous… and completely unavoidable. It is a “doomsday device” – hidden in plain view – in the feds’ fiat money system.

It took us a long time to understand how this works. For many years, we referred to the Fed’s EZ money policies as “printing money.” Finally, we realized that this metaphoric description of the Fed’s role probably hides more than it reveals.

The Fed is not printing money. If it were printing money, we’d have more money around and higher consumer prices. Instead, when the feds went to a “paper” money system in 1971, they did it very cleverly.

Yes, their new system is totally fraudulent and absolutely ruinous – just like an old fashioned money-printing scheme. But the fraud takes much longer to uncover, and the ruin is only obvious at the end. It is a “bezzle”… where you only become aware that you’ve been had when it blows up.

Unlimited Credit

Here’s the deal…Instead of printing money itself, the Fed allows banks to create an almost unlimited amount of credit (providing they meet certain capital requirements).

Contrary to popular belief, banks don’t act as “warehouses” – taking in deposits and then lending them out again. Instead, banks create new deposits (aka money) when they make a loan.

US true money supply TMS-2 – we [Pater Tenebrarum at acting-man.com] actually have to disagree with Bill on one point: while normally, the bulk of credit and money supply expansion is indeed left to commercial banks, the Fed can and does “print money” directly if it deems it necessary. In fact, this happened during the three iterations of QE – every time the Fed purchases a security from a non-bank (and the primary dealers are legally non-banks), new deposit money is created to the extent of the purchase. You can catch up on the details here: “Can the Fed Print Money?”

All it takes is a few strokes on a keyboard, and account balances – along with the money supply – go up.0 At first, this new credit-money acts much like printing-press money: It gives people money to spend that nobody ever earned. Everybody is happy.

But if you keep on creating more and more paper money, the fraud is soon obvious. Prices rise. People realize that they have no more purchasing power than they had before.

In the meantime, businesses and consumers have all made bad decisions, based on the apparent increase in “demand.” After a while, all those mistakes have to be flushed out… in a recession or a depression.

To continue reading: The Fed’s Doomsday Device