It’s all very well those who fully understand finance reading and fully understanding this at Zero Hedge:
At this point it is worth considering a critical, if tangential question: Why is the Fed so concerned about not signaling QE, and why are so many Fed fanboys desperate to parrot whatever Powell is saying day after day?
Simply said, there are several reasons why the Fed is making a great effort to let the world know that its security purchases are not QE and are not reflective of any change in monetary policy stance. The first is the obvious issue of signaling concern around the economic outlook which would run counter to its cautiously optimistic and often upbeat assessment. After all, why do QE if the economy has “never been stronger”, and the Fed was hiking rates as recently as a December. Included here are the concerns about running out of ammunition at the zero lower bound of rate policy. With negative rates increasingly off the table – until push comes to shove of course and the Fed is forced to cut below zero – QE is meant to be reserved as dry powder for a rainy day when conventional tools are exhausted (even if QE is in fact taking place this very instant).
A less obvious concern for the Fed is connecting monetary policy to bank demand for Fed liabilities, which as BofA admits, “is not something that fits neatly within its dual mandate”: last January, the Fed made a “momentous decision” to run an “abundant reserve regime” also known as a floor system, where the central bank decided not to return to its pre-crisis days of zero excess reserves. As such, the central bank now views the proper level of excess reserves (a Fed balance sheet liability) not in terms of its dual mandate for inflation and employment, but in terms of how banks prefer to meet regulatory liquidity requirements and how this preference impacts repo and other markets.
In short, the Fed’s dual mandate has been replaced by a single mandate of promoting financial stability (or as some may say, boosting JPMorgan’s stock price) similar to that of the ECB.
… but what of those who do not understand the intricacies and jargon? Well we rely on trusted sources.
Is ZH a trusted source? Well, there are two things to say – firstly that major articles are written by Tyler Durden, a generic name for all writers co-opted at the site and secondly, it is a ‘bear-ish’ site, as in bull and bear, as in optimistic high v depressed low.
ZH takes a jaundiced view of finance and so tends to expose dodgy practice early. To me, it’s good when taken in conjunction with other trusted sources.
Ah, but there’s the rub. One thing for sure – the Fed is no one’s friend but JPM’s and similar and N.O. has been onto JPM, along with others, since its inception.
Within that article was this:
… and remember that they are connected to Chatham House, Demos and the BIS. It would take a tome to cover all that.
Where does that leave us, the mass of amateurs?
Firstly, it leaves us with the realisation of why people do things, particularly those ‘in charge’. It explains the out-and-out unprincipled actions of Johnson and across the pond – the Dems and RINOs. The Remainers have already openly nailed their colours, so they’re a slightly different matter, still in thrall though to the EU gravy train.
Those not on EU largesse and who are still Remain essentially want to be able to travel freely on the continent and/or not have their country of residence over there make them toxic in that country. I can understand that.
Trouble is that the EU is a grasping, communist, bloodsucking body which has spread itself across the continent like a cancer, as Hitler did and that’s the climate we’re in – quisling place-people are everywhere over here, e.g. Miller.
Secondly, it becomes quite apparent that the whole regulatory framework of finance is bollox – when the Fed is nothing but a group of greedy families who sold their soul a couple of centuries back and earlier, that they tried it on with Andrew Jackson in the States and were temporarily prevented from establishing the Bank of the United States, then got around it in many other ways – when we see that the regulators are controlled by JPM and GS, who are in turn controlled by other names in finance – then it’s obvious that those in the game are a bit like the great, greedy Fed ship plowing through the sea and everyone in finance is attempting to ski behind in its wake.
But it’s an artificial wake, in that the greedy ship can change course at a whim, whenever it chooses or whenever directed by its spiritual side [see Svali]. When you see the climate religion and the mystery religions very, very close to big finance:
… then you begin to realise how powerless Common Man really is. Not in a right or wrong sense but in a practical sense. The game is stacked against him/her and there it is.
But there is slight hope – the best laid schemes o’ mice an’ men gang aft a-gley. Aye.
If you believe in a different power, an opposed and higher power, then the story becomes most interesting indeed. Just why we’re suffered to go through these fourscore years and a bit is beyond me – some sort of punishment for a former life perhaps? Either way, here we are and there they are above, we are indeed the stars’ tennis balls.
Coming back to Svali yet again:
One reason that our economy continues limping along is the artificial support that the Federal Reserve had given it, manipulating interest rates, etc. But one day, this won’t work (or this leverage will be withdrawn on purpose) and the next great depression will hit. The government will call in its bonds and loans, and credit card debts will be called in. There will be massive bankruptcies nationwide. Europe will stabilize first and then Germany, France and England will have the strongest economies, and will institute, through the UN, an international currency.
That was the year 2000, mind. Since the year 2000, that is what I’ve believed has always been in the offing and I see no reason to change that view now – it’s simply a case of when they intend to pull the plug.
As mentioned a few times, my long book speaks of the concept of time – not as linear but as things occurring when the conjunction of required elements is present, not before, not after. The Twilight Zone touched on it with A Matter of Minutes, so did Groundhog Day.
Implications and indications?
Look to your family and yourself, get your spirit, mind, body in order, get ready to take on what’s coming.