Tag Archives: Federal Reserve

Stabbing With Their Steely Knives, They Just Can’t Kill the Beast, by Doug “Uncola” Lynn

Saving the best for last. From the always interesting Doug “Uncola” Lynn at theburningplatform.com:

 You were blameless in your ways from the day you were created till wickedness was found in you. Through your widespread trade you were filled with violence, and you sinned. So I drove you in disgrace from the mount of God, and I expelled you, guardian cherub, from among the fiery stones. Your heart became proud on account of your beauty, and you corrupted your wisdom because of your splendor…

– Ezekiel 28: 15-17

In horror stories originating from the times of the first songs there have always been common enemies.  Creatures of sinister intelligence, blind violence, disingenuity, clever crafters of schemes, or often containing the capacity for all of these; lurking in the dark, or hidden in plain sight, but always waiting and watching.  Little Red Riding Hood and the Three Little Pigs suffered through the antics of wily wolves. Rapunzel and Hansel and Gretel agonized before the wicked wills of warted witches; and with Jack of Beanstalk fame it was jeering giants who longed to grind his bones for bread, alive or dead.  Star Wars had Darth Vader and the Lords of the Sith, whereas it was the evil eye of Sauron that ruled over J.R.R Tolkien’s shadowy land of Mordor.  And for most of the world’s religions today it remains Lucifer, the morning star, who fell from heaven by the weight of a prideful heart and now reigns as the Prince and Power of the Air; tempting, taunting, and tantalizing, all of mankind.

In every story, there are heroes and villains introduced and funneled into the friction of rising action that results in a climax followed by the falling action which precedes any resolution.  Also known as the Five Elements of a Plot, these components are the sine qua non of universal story telling across any genre or medium.

To continue reading: Stabbing With Their Steely Knives, They Just Can’t Kill the Beast

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Trump’s Fed Picks? More of the Same! by Ron Paul

It’s not clear if Ron Paul thinks the right personnel, policies, and an audit will cure an institution that rests on an illogical foundation, is inherently corrupt (if you or I counterfeit money, we get thrown in jail), and is the apex of a bankers’ cartel. Paul is not happy with Trump’s candidates for the next Fed head. From Paul at ronpaulinstitute.org:

This week President Trump revealed his final five candidates for Federal Reserve chair. Disappointingly, but not surprisingly, all five have strong ties to the financial and political establishment. The leading candidates are former Federal Reserve governor and Morgan Stanley banker Kevin Warsh and current Fed governor, former investment banker, Carlyle Group partner, and George H.W. Bush administration official Jerome Powell. Gary Cohn, current director of the president’s National Economic Council and former president of Goldman Sachs, is also on Trump’s list.

Trump is also considering reappointing Janet Yellen, even though when he was running for president he repeatedly criticized her for pursuing policies harmful to the middle class. Of course candidate Trump also promised to support Audit the Fed and even voiced support for returning to the gold standard. But, he has not even uttered the words “Audit the Fed,” or talked about any changes to monetary policy, since the election.

Instead, President Trump, in complete contradiction to candidate Trump, has praised Yellen for being a “low-interest-rate-person.” One reason Trump may have changed his position is that, like most first-term presidents, he thinks low interest rates will help him win reelection. Trump may also realize that his welfare and warfare spending plans require an accommodative Fed to monetize the federal debt. The truth is President Trump’s embrace of status quo monetary policy could prove fatal to both his presidency and the American economy.

The failure of the Fed’s post-2008 policies of unprecedented money creation and record-low interest rates shows our experiment with fiat money is nearing its inevitable end. All of Trump’s potential picks are likely to continue the Fed’s current policies. Even the ones who say they favor higher rates will likely bow to the wishes of their friends in the financial and political establishment and make sure any rate hikes are minuscule. Appointing a Fed chair who will continue, or only make marginal changes to, these failed policies will hasten the collapse while making the resulting depression more painful.

To continue reading: Trump’s Fed Picks? More of the Same!

Federal Reserve Will Continue Cutting Economic Life Support, by Brandon Smith

The Fed’s mission is not to help the US economy, but to torpedo it. From Brandon Smith at alt-market.com:

I remember back in mid-2013 when the Federal Reserve fielded the notion of a “taper” of quantitative easing measures. More specifically, I remember the response of mainstream economic analysts as well as the alternative economic community. I argued fervently in multiple articles that the Fed would indeed follow through with the taper, and that it made perfect sense for them to do so given that the mission of the central bank is not to protect the U.S. financial system, but to sabotage it carefully and deliberately. The general consensus was that a taper of QE was impossible and that the Fed would “never dare.” Not long after, the Fed launched its taper program.

Two years later, in 2015, I argued once again that the Fed would begin raising interest rates even though multiple mainstream and alternative sources believed that this was also impossible. Without low interest rates, stock buybacks would slowly but surely die out, and the last pillar holding together equities and the general economy (besides blind faith) would be removed. The idea that the Fed would knowingly take such an action seemed to be against their “best self interest;” and yet, not long after, they initiated the beginning of the end for artificially low interest rates.

The process that the Federal Reserve has undertaken has been a long and arduous one cloaked in disinformation. It is a process of dismantlement. Through unprecedented stimulus measures, the central bank has conjured perhaps the largest stock and bond bubbles in history, not to mention a bubble to end all bubbles in the U.S. dollar.

Stocks in particular are irrelevant in the grand scheme of our economy, but this does not stop the populace from using them as a reference point for the health of our system. This creates an environment rife with delusion, just as the open flood of cheap credit created considerable delusion before the crash of 2008.

To continue reading: Federal Reserve Will Continue Cutting Economic Life Support

 

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

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