Tag Archive: The Fed


The World’s Next Credit Crunch Could Make 2008 Look Like A Hiccup

 

 

 

 

” We are certainly living in strange times. An unprecedented monetary experiment is coming to a staggered end and no one knows the potential repercussions – a plague of frogs cannot be entirely ruled out.

  For the time being, the markets remain sanguine, expecting, for example, a gentle increase in the Bank of England’s main interest rate to just 1.5pc by the end of the decade. And, who knows, maybe the markets are right.

  But maybe it’s too quiet. Last week, Ray Dalio, the founder of the $165bn (£110bn) hedge fund Bridgewater Associates, wrote a widely-circulated note warning his clients that the US Federal Reserve risked setting off a 1937-style crash when it starts raising interest rates again.

  Then, as now, the central bank had spent years printing money in order to help the American economy recover from the 1929 crash. But the side effect was a stock market bubble, which promptly burst when the Fed prematurely increased rates. Mr Dalio is worried about a repeat performance: “We don’t know – nor does the Fed – exactly how much tightening will knock over the apple cart.”

  It’s true that the policy and regulatory response to the last crisis often sows the seeds for the next. It is not hard to map out a sequence of events in which that proves to be the case again. If it were, a US stock market crash might be the least of our problems.”

 

Read more at the Telegraph

 

 

 

 

 

 

 

 

 

 

 

 

Daily Video 10.20.14

The Fed Lays A Foundation For The Next Round Of QE

 

 

 

 

Published on Oct 10, 2014

 ” Listen to The Peter Schiff Show on http://www.SchiffRadio.com
Buy my newest book at http://www.tinyurl.com/RealCrash
Friend me on http://www.Facebook.com/PeterSchiff
Follow me on http://www.Twitter.com/PeterSchiff “

 

 

 

 

 

 

 

 

 

 

 

Why You Feel Poorer

 

 

costoflivingxpenses-7-1-14

 

 

 

 

” You feel poorer because you are poorer.

  In the last fourteen years, has your income increased over 50%? If you think it has, has it done so after taxes? Even if it has, you likely have not kept up in terms of inflation.

  If you are a retiree, living on fixed income, a pension or bonds, you certainly have become poorer. If you had bought the Dow-Jones on 12/31/1999 you would have entered at about 11,500. It closed last week at less than 17,100. That would have been an appreciation of 6,600, better than 50%. But, of course, that was before taxes.

  As a retiree, you have seen your purchasing power stolen by Fed policies. Whether you invested in fixed income or equities, you lost ground. Anyone in that position has seen their lives become poorer despite a lifetime of successful work and careful financial planning.”

 

 

    As it stands now , no matter how hard you work and save , you’ll never get ahead , not with the present monetary policies put in place at the behest of the Fed and the government . The authorities are systematically destroying all that the American public has worked so hard to attain . The American dream is not being killed by China … It is a victim of filicide

 

 

” For those still working, most are losing purchasing power each year. Wages are not keeping up with inflation, even the understated numbers reported by government. In short, the decline of a once-great economic power is well underway. The country is no longer growing enough to raise everyone’s standard of living.

  Government has killed the golden goose and in an attempt to hide the obvious is debauching the dollars. Government tries to hide their own failure with phony statistics and a welfare state designed to placate the masses. Bread and circuses are deceptions not progress.”

 

 

Read the rest

 

 

 

 

 

 

Fischer, Brainard To Push For More Activist Fed

 

 

 

 

 

 

” The two new nominees to the Federal Reserve’s Board of Governors are expected to push for an expanded Fed role in managing the U.S. economy, working to replace the current raft of programs that resulted from the financial crisis with more permanent tools.

  The arrival of former Bank of Israel Governor Stanley Fischer and former U.S. Treasury official Lael Brainard will add two strong voices to back Chair Janet Yellen’s view that loose monetary policy needs to be extended to turn around a slack labor market.

  Fischer intervened directly in Israel’s mortgage market to tackle a real estate bubble, while Brainard pushed EU governments hard for more aggressive action from the European Central Bank during the euro zone crisis.

  BB Interviews with former colleagues and a review of their public statements and published material also suggest both will want the Fed to remain in activist mode long after its current programs wind down and its bloated balance sheet shrinks.

  How they influence the U.S. central bank is a critically important question for investors, who are searching for clues on when the Fed will lift interest rates from near zero, where they’ve been since late 2008. It is a debate that may well be the defining one of Yellen’s tenure.”

 

 

 

 

 

 

    As if they don’t already control everything now , the Fed wants even more power . Statism is on the march in Obama’s Amerika .

 

 

 

 

 

 

 

 

 

Federal Reserve Issues Warning, Bank Drills, Possible False Flag

 

NMDrill

 

” Either the new Federal Reserve Chairman Janet Yellen is a prepper, or there is something afoot in the world of banking. If she is a prepper, I missed any indication of that in her background. Bankers typically talk in terms of contingency plans and liquidation programs, not prepping for disasters.

  In January of this year, Supervisory Regulation (SR) 14-01 was issued in regarding the need for bank preparedness particularly for the eight bank holding companies (BHCs) in the United States. According to the memo, there are eight Bank Holding Companies that appear to be at risk and that risk threatens the financial stability of the United States. These eight companies are Bank of America Corporation, Bank of New York Mellon Corporation, PLC, Citigroup Inc., Goldman Sachs Group, Inc., JPMorgan Chase & Co., Morgan Stanley, State Street Corporation, and Wells Fargo & Company.”

 

Story continues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

They’ll Turn Us All In To Beggars , ‘Cause They’re Easier To Please

 

 

 

” Yet as fewer labor hours go into producing goods, workers work longer to buy the goods. Using the hour as a measure of costs, we can calculate how much more work a wage earner must produce to buy milk today. But it’s harder to measure the reduction of work that goes into production. We know that it’s less by empirical evidence, but we only get a sense of it.

By switching to gold, we can measure both wages and prices on an absolute scale—in ounces—and we can make precise comparisons. To convert the price of anything to gold, just divide the price by the current gold price. For example, in 2011 if a big-screen TV was $785, then divide that by the gold price of that year; the television set cost half an ounce of gold.”

 

 

 

The bottom line is that, in terms of gold, wages have fallen by about 87 percent. To get a stronger sense of what that means, consider that back in 1965, the minimum wage was 71 ounces of gold per year. In 2011, the senior engineer earned the equivalent of 63 ounces in gold. So, measured in gold, we see that senior engineers now earn less than what unskilled laborers earned back in 1965.

That’s right: today’s highly skilled professional is making less in real, comparative terms than yesterday’s unskilled worker.”

 

 

 

” When measured in dollars, wages and prices appear to be rising and, comparing wages to prices, we see only a small loss of purchasing power. However, prices do not tell the whole story, because they reveal nothing about costs. Costs also fell and this explains why the apparent drop in the real wages seems small.

But measured in gold—and this is crucial to understanding why we need a gold standard—we see reality with clarity. Incomes are about one tenth what they were in the 60’s. ” 

 

 

HT/Instapundit

 

 

 

 

 

 

 

Does The Dollar Have What It Takes ?

 

 

” We use the term “reserve currency” when referring to the common use of the dollar by other countries when settling their international trade accounts. For example, if Canada buys goods from China, it may pay China in US dollars rather than Canadian dollars, and vice versa. However, the foundation from which the term originated no longer exists, and today the dollar is called a “reserve currency” simply because foreign countries hold it in great quantity to facilitate trade.

The first reserve currency was the British pound sterling. Because the pound was “good as gold,” many countries found it more convenient to hold pounds rather than gold itself during the age of the gold standard. The world’s great trading nations settled their trade in gold, but they might hold pounds rather than gold, with the confidence that the Bank of England would hand over the gold at a fixed exchange rate upon presentment. Toward the end of World War II the US dollar was given this status by international treaty following the Bretton Woods Agreement. The International Monetary Fund (IMF) was formed with the express purpose of monitoring the Federal Reserve’s commitment to Bretton Woods by ensuring that the Fed did not inflate the dollar and stood ready to exchange dollars for gold at $35 per ounce. Thusly, countries had confidence that their dollars held for trading purposes were as “good as gold,” as had been the Pound Sterling at one time.

However, the Fed did not maintain its commitment to the Bretton Woods Agreement and the IMF did not attempt to force it to hold enough gold to honor all its outstanding currency in gold at $35 per ounce. The Fed was called to account in the late 1960s, first by France and then by others, until its gold reserves were so low that it had no choice but to revalue the dollar at some higher exchange rate or abrogate its responsibilities to honor dollars for gold entirely. To it everlasting shame, the US chose the latter and “went off the gold standard” in September 1971.”

 

 

 

 

 

 

 

 

 

From Zero Hedge

 

1913 Just Happens To Be The Year Of The Fed’s Creation … Co-incidence ?

 

” The Fed claims it can generate a “recovery.” It cannot. The Fed’s devaluation of our currency is the very reason why the economy is a disaster.

According to the NY Times the average net worth for Middle class Americans in 2010 was 6% lower adjusted for inflation than their average net worth in 1989.

As the articles notes, housing costs 56% more than in 1989, our of pocket healthcare expenses rose 155%, college expenses are up in the double digits

The Fed is responsible for the Dollar devaluation that caused this. The Fed is the one that eviscerated the Middle Class. Its policies have lowered the quality of life for Americans. Period. End of story.”

 

 

 

 

 

 

 

 

 

Where Are We Now? – A World View

 

 

 

Wondering why the money world got its knickers in a twist last week? The answer is simple: the global economy is breaking apart and its constituent major players are doing face-plants on the downhill slope of a no-longer-cheap-oil way of life.  Let’s look at them case by case.

     The USA slogs deeper into paralysis and decay in a collective mental fog of disbelief that its own exceptionalism can’t overcome the laws of thermodynamics. This general malaise precipitates into a range of specific quandaries. The so-called economy depends on financialization, since it is no longer based on manufacturing things of value. The financialization depends on housing, that is, a particular kind of housing: suburban sprawl housing (and its commercial accessories, the strip malls, the box stores, the burger shacks, etc.). Gasoline is now too expensive to run the suburban living arrangement. It will remain marginally unaffordable. Even if the price of oil goes down, it will be because citizens of the USA will not have enough money to buy it. Lesson: the suburban project is over, along with the economy it drove in on.

     But so is the mega-city project, the giant metroplex of skyscrapers. So, don’t suppose that we can transform the production house-building industry into an apartment-building industry. The end of cheap oil also means we can’t run cities at the 20th century scale. That includes the scale of the buildings as well as the aggregate scale of the whole urban organism. Nobody gets this. For one thing, there will be far fewer jobs in anything connected to financialization because that “industry” is imploding. The recent action around the Federal Reserve illustrates this. When chairman Bernanke’s lips quivered last week, the financial markets had a grand mal seizure. He floated the notion that his organization might “taper” their purchases of US government issued debt and mortgage-backed securities — the latter being mostly bundled debt originated by government-sponsored entities and agencies. That’s the “money” that supports the suburban sprawl industry.”

 

 

 

Read the whole sobering article … if you dare .

 

 

 

 

 

 

 

History of Federal Reserve & JFK’s Executive Order 11110 Pt 1.

History of Federal Reserve & JFK’s Executive Order 11110 Pt 2.

It’s Official: Worst. Recovery. EVER

” If there was any debate whether the Fed’s policies have helped the economy or just the market (and specifically the Bernanke-targeted Russell 2000), the following two charts will end any and all debate. As the following chart from the St Louis Fed shows, as of the just completed quarter, US GDP “growth” since the “recovery” is now the worst in US history, having just dipped below the heretofore lowest on record. “

Step One In Getting Our Country Back

Support Rep. Broun’s New Audit the Fed Bill!

“The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.”

Lord Acton

“… we conclude that the [Federal] Reserve Banks are not federal … but are independent privately owned and locally controlled corporations… without day to day direction from the federal government.”

9th Circuit Court

 

Enough with a totally unaccountable cabal of banksters running this country into the ground and manipulating our government and economy for it’s own private gain . 

 

” Banks have done more injury to the religion, morality, tranquility, prosperity, and even wealth of the nation than they can have done or ever will do good.”

John Adams

” On the very first day of the 113th Congress, Georgia Congressman Paul Broun introduced legislation for a complete audit of the Federal Reserve System. This legislation will bring transparency to the central bank’s covert operations. After passing the House of Representatives in 2012 with bipartisan support, the original Audit the Fed bill was dead-on-arrival in the Senate thanks to Harry Reid and the rest of the establishment. They chose to stand with secret bailouts for the world’s most profitable companies, foreign banks, and even foreign governments instead of the people. ”

 

 

“The system of banking [is] a blot left in all our Constitutions, which, if not covered, will end in their destruction… I sincerely believe that banking institutions are more dangerous than standing armies; and that the principle of spending money to be paid by posterity… is but swindling futurity on a large scale.”

Thomas Jefferson

 

 

This exactly what the founders warned against when they spoke of the evils of national banks .

 

 

” The bold effort the present (central) bank had made to control the government … are but premonitions of the fate that await the American people should they be deluded into a perpetuation of this institution or the establishment of another like it.”

Andrew Jackson

 

The Missing Element

   “The one missing element in the news stories just put up in respect of the quantitative easing by the Federal Reserve is the comment issued by the one of the individuals who sits directly above Chairman Bernanke in the constitutional pecking order. This is the chairman of the House subcommittee on domestic monetary policy, Ron Paul. He’s none too pleased with the direction in which the Fed is going. “The Fed’s only solution for every problem is to print more money and provide more liquidity,” Dr. Paul said in a statement today. “Mr. Bernanke and Fed governors appear not to understand that our current economic malaise resulted directly because of the excessive credit the Fed already pumped into the system.” “

   Breitbart

” Just how subservient to Barack Obama is the Fed? We’ll soon find out . The Fed is considering pumping more money into the
economy and inflating the currency by the end of September, just in time to artificially stimulate growth and help Obama’s reelection prospects. Just two weeks ago,
Senator Chuck Schumer told the Fed it should act before the 2012 election. “

  As this NY Sun editorial makes abundantly clear , the Fed doesn’t work for us , the people , it works for the government and the banks .

” We’ve often thought of that harbinger in the context of the current crisis over the fiat dollar, but it was all brought together in column by Judy Shelton in today’s Wall Street Journal. She notes that many in America “fear that our nation is going the way of Europe —becoming more socialist and redistributionist as government grows ever larger.” But, she warns, “the most disturbing trend may not be the fiscal enlargement of government through excessive spending, but rather the elevated role of monetary policy.” She’s referring to the way the Federal Reserve, as she puts it, “uses its enormous influence over banking and financial institutions to channel funds back to government instead of directing them toward productive economic activity.” “

  ” This would mark a significant break from the Fed’s current Congressional guidance, which
provides a “dual mandate “– to maximize both employment and price stability. Because Federal
Reserve actions are not an effective way to achieve job growth, Mr. Brady said, that goal should be dropped as a guiding mandate. “