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Here Is What The Fed's Advisors Really Think About The US Economy

Tyler Durden's picture




 

Five months ago, in May, in a release that stunned markets, the Federal Advisory Council (FAC) which is composed of twelve representatives of the banking industry (including the CEOs of Morgan Stanley, TD Bank, State Street, PNC, BB&T, First Horizon, Commerce Bank and Discover), and which "consults with and advises the Board on all matters within the Board's jurisdiction" said something very disturbing: the truth.

To wit: "There is also concern about the possibility of a breakout of inflation, although current inflation risk is not considered unmanageable, and of an unsustainable bubble in equity and fixed-income markets given current prices."

This took place just as the Fed launched its PR campaign to "taper" or rather see what the market's response would be to concerns that the Fed may be, slowly, pulling out of the monthly monetization business. The outcome as we all know, was not good, and it certainly punctured the equity and fixed-income bubbles, if only for the time being. A few days ago, the same Fed Advisory Counsil met again, and once again shared its views on current banking conditions, the economy and markets, with the FOMC Board.

Contrary to the all "rose-colored glasses" reports by the Fed released in the past year, which constantly talked up the "economic recovery" only to punk everyone - economists and market participants alike - when it stunned markets with its no taper announcement in September, over fears what this would do to the economy, the Federal Advisory Council's view on things is decidedly less "rosy."

This is a the summary of how the various bank CEOs that tell the Fed what it "should" do, see the US economy and financial system currently:

  • Loan demand is tepid due to uncertainty around the economic outlook, regulatory burdens, health care and tax reforms, geopolitical risk, and sovereign deficit spending.
  • Senior bank leaders at the recent Barclay’s investor conference consistently noted that loan demand is softening and mortgage banking revenue is evaporating faster than expected. This consensus has led some analysts to lower quarterly earnings forecasts for several regional banks.
  • Both consumers and businesses have deleveraged over the past few years and remain more selective about new borrowing and capital expansion.
  • Loan volumes are dominated by refinance activity. New loan volumes are concentrated in mergers and acquisitions, capital distributions, and share repurchases.
  • Excess capacity remains in the banking sector and in the institutional markets. Loan tenor, structure, and pricing continue to drift negatively. With large inflows of funds seeking yield and variable pricing, there is greater structuring weakness in the institutional markets.
  • The outlook for the loan markets is uncertain and no near-term changes are expected.
  • The financial markets appear to be dominated by decreasing liquidity as some dealers are no longer making a market in certain asset classes. It is clear that dealers are less willing to hold sizable inventories of bonds.
  • The financial markets have been adversely impacted by ever-changing regulatory metrics, such as leverage capital requirements, Basel III’s Liquidity Coverage Ratio (“LCR”), and the liquid asset buffer. The response to these ratios may cause downstream implications for other financial institutions and municipalities, with SIFIs less willing to use their balance sheets to provide secured funding (repurchase agreements) or to book municipal deposits.
  • While many analysts have argued that a small reduction in monthly asset purchases still represents an extremely accommodative monetary posture, the markets’ recent price movements suggest otherwise. Thus far, even the threat of lower Federal Reserve purchases paired with an increase in selling has had a major negative impact on the bond market.
  • Increases in longer-term rates have caused a flip from unrealized gains to unrealized losses in longer-duration investment portfolios, which could ultimately impact consolidation in the industry.

Still think anything is recovering, and that stocks reflect anything more than the unprecedented liquidity tsunami the same ill-advised Fed has created (and which by implication means that said liquidity is likely never going to me removed voluntarily)?

Didn't think so.

 

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Fri, 10/11/2013 - 14:35 | 4046012 Pooper Popper
Pooper Popper's picture

Fuck Barry!

Fri, 10/11/2013 - 14:43 | 4046033 Millivanilli
Millivanilli's picture

It sure is nice of those snakes to fund banks guilty of money laundering, market manipulation, securities fraud and rate rigging, with zero percent money all the while ripping off savers with ZIRP.    Then they turn around and charge high interest loans to the savers who can't make ends meet.

 

FUCK THE CRIMINAL FED. AND FUCK STEVE LIESMAN.  

 

We are blood bags and they are ticks.   It is that simple.

Fri, 10/11/2013 - 14:44 | 4046046 McMolotov
McMolotov's picture

Jeez, it sounds pretty bad when you put it that way...

Fri, 10/11/2013 - 14:48 | 4046060 Enslavethechild...
EnslavethechildrenforBen's picture

The Fed is just a front for the Military.

Fri, 10/11/2013 - 14:51 | 4046071 General Decline
General Decline's picture

And who is the military the front for?

Fri, 10/11/2013 - 14:54 | 4046084 McMolotov
McMolotov's picture

"Aliens!!!" —Giorgio A. Tsoukalos

Fri, 10/11/2013 - 14:59 | 4046106 Shocker
Shocker's picture

Here is the Job part of the economy.

Layoff / Business Closing List

http://www.dailyjobcuts.com

,

Fri, 10/11/2013 - 15:07 | 4046135 Enslavethechild...
EnslavethechildrenforBen's picture

The Military is a front for a bunch of sociopaths

Fri, 10/11/2013 - 15:18 | 4046172 NoDebt
NoDebt's picture

LIQUIDITY TRAP.

You know it, I know it and now, at long last, the Fed knows it.

That's why it's called a trap.  Easy to get into, hard to get out of.

Fri, 10/11/2013 - 16:13 | 4046310 eclectic syncretist
eclectic syncretist's picture

The realization that printing money will not solve the problem, but in fact is the problem, has not yet materialized in the cranium of the average citizen.  But the increasingly desperate measures being taken by the politicians, banksters, and central banksters clearly signal that the day this fundamental realization awakens within the populace is drawing nearer rapidly. 

Fri, 10/11/2013 - 15:19 | 4046174 dontgoforit
dontgoforit's picture

Not a front - a bludgeon.

Fri, 10/11/2013 - 15:21 | 4046182 Herd Redirectio...
Herd Redirection Committee's picture

You need to recheck your history books.

Really, its the military that calls the shots?  In the 19th century, a nations ability to conduct war abroad depended on its ability to get physical bullion, gold and silver, to its troops abroad.  That made the military beholden to the money powers.  You might want to look into the financial aftermath of a certain Battle of Waterloo.

As powerful as the military is, the ability to create money out of thin air is more powerful.

Fri, 10/11/2013 - 15:51 | 4046271 Dick Buttkiss
Dick Buttkiss's picture

"As powerful as the military is, the ability to create money out of thin air is more powerful."

Until it isn't, and both powers bite the dust.

There will be quite a duststorm in the interim, of course, so best hunker down and store up:

http://readynutrition.com/resources/52-weeks-to-preparedness-an-introduc...

Fri, 10/11/2013 - 16:02 | 4046288 Enslavethechild...
EnslavethechildrenforBen's picture

Only a mentally retarded cock sucker would actually believe that you can create money out of thin air...

Fri, 10/11/2013 - 16:17 | 4046322 eclectic syncretist
eclectic syncretist's picture

Yeah!  The truth is that the Fed creates money by just typing the numbers into a computer.

Fri, 10/11/2013 - 15:00 | 4046107 General Decline
General Decline's picture

@ McMolotov

"Aliens!!!" —Giorgio A. Tsoukalos

 

That guy could take a dump in the toilet and figure out a way to blame it on aliens.

Fri, 10/11/2013 - 15:08 | 4046144 cougar_w
cougar_w's picture

I'm not saying it's aliens -- but yeah, aliens.

Fri, 10/11/2013 - 17:07 | 4046472 halfawake
halfawake's picture

"I didn't hear your question.. but the answer is aliens."

 

http://cdn.memegenerator.net/instances/250x250/37583519.jpg

Fri, 10/11/2013 - 15:09 | 4046149 TrumpXVI
TrumpXVI's picture

Good grief, what KOYNED of accusation is that!

Fri, 10/11/2013 - 15:12 | 4046159 Pool Shark
Pool Shark's picture

 

 

"Don't blame me, I voted for Kodos."

http://www.youtube.com/watch?v=zTJ0qYR6YFo

 

 

Fri, 10/11/2013 - 16:55 | 4046421 Kirk2NCC1701
Kirk2NCC1701's picture

Ah, of course... the Ancient Aliens model.  And Lucifer (the Light Bearer) became a disgruntled indentured servant (or contrarian second in command) to God, who rebelled.  His 'adversarial' role got him branded as the Adversary (Satan).  After their starship mutiny failed, they were dumped on planet Earth, where they've been stirring up trouble for God ever since.  ;-)   ;-)

Fri, 10/11/2013 - 17:22 | 4046498 The Heart
The Heart's picture

"After their starship mutiny failed, they were dumped on planet Earth, where they've been stirring up trouble for God ever since."

Ahoy Kirk!

Yes, true that. They also have like an evil virus, contaminated many people and beliefs that were meant for the good of mankind. The pollution of darkness that is revealed to be light, is turned back into darkness with the diabolical plan of infesting the entire body with the choking killing pusy dis-ease of greed, and ego. What was given by many for the good of the whole has been sequestered and used for the gains of power, and more ego.

There are many souls aboard that are sick and fricking tired of all the corruption and blatant criminality. Soon the Marks will make the moves, the Tylers are watching the doors, all is seen and known.

Now for some camaraderie and good fun. All for ships and giggles of course.:

http://www.youtube.com/watch?v=p0mjG9-CA3w

 

Fri, 10/11/2013 - 15:01 | 4046087 ZerOhead
ZerOhead's picture

It's really just the global US dollar hegemony enforcement unit for the Fed & Special friends.

(Just ask Saddam Hussein and Muammar Gaddafi... oh wait... they and their oil for Euro dreams are already dead)

Fri, 10/11/2013 - 15:03 | 4046118 General Decline
General Decline's picture

It was the "special friends" part I was to refering to above.

Fri, 10/11/2013 - 15:07 | 4046137 ZerOhead
ZerOhead's picture

I try not to mention them too much by name these days... it hurts my neck too much having to look up in the sky all the time...

Fri, 10/11/2013 - 15:07 | 4046141 General Decline
General Decline's picture

For incoming drones?  Yeah, I know what you mean.

Fri, 10/11/2013 - 15:33 | 4046152 ZerOhead
ZerOhead's picture

Ragtop convertibles and motorcycles are all I drive these days because of the great visibilty plus you can get out of them real fast.

I hear camel sales in the middle east these days are through the roof...

Fri, 10/11/2013 - 15:11 | 4046150 CPL
CPL's picture

Depends who is paying them.  Oddly some rituals haven't been observed for around 1300 years on the word SOL-DIER, latin root of solidum.  Which is Payment to a Lord, as in sacrifice.  Versus Mercenary which is Payment of Fortune, or Soldier of fortune.

In Japan historically it goes further and adds a third option.  Samurai, bound to a vassal lord until they die.  Ronin, money loving thugs.  Yojimbo, honourable money loving thug that's friends with people.

Gets even more interesting when looking at Elite soldiers, in latin the word is schola, which is the root of scholar.  Neat huh.

Fri, 10/11/2013 - 14:56 | 4046091 dontgoforit
dontgoforit's picture

The rape continues until they're fully sated - well, actually they will never be fully sated, so I guess we will continue to have it stuck to us.  There was a study done a year or so ago by a 'prestigious' university using MRI equipment and confessed liberals and conservatives.  When asked the same economic or political questions there was a marked difference not only in the response, but in the part of the brain that registered the question & answer.  The conclusion of the experiment is that liberals and conservatives brains are about as different as male & female human brains.  Now, I could get quippy and say, "they discovered the libs didn't have any brains," but that wouldn't be completely fair.  Fairness, by the way, was a subject that libs were all over (when it went their way).

Fri, 10/11/2013 - 14:50 | 4046050 Enslavethechild...
EnslavethechildrenforBen's picture

The MIA is behind it all.

Fri, 10/11/2013 - 14:56 | 4046094 Wahooo
Wahooo's picture

"We are blood bags and they are ticks."

Quotes like this are why I come to ZH.

Fri, 10/11/2013 - 15:08 | 4046147 cougar_w
cougar_w's picture

Best just before lunch.

Fri, 10/11/2013 - 14:41 | 4046036 Chris Jusset
Chris Jusset's picture

Repeat after me: "THERE IS NO RECOVERY."

 

Repeatedly blowing unsustainable bubbles IS NOT A RECOVERY.

Fri, 10/11/2013 - 15:22 | 4046125 AL_SWEARENGEN
AL_SWEARENGEN's picture

Who controls the British crown?
Who keeps the metric system down?
We do, we do
Who keeps Atlantis off the maps?
Who keeps the Martians under wraps?
We do, we do
Who holds back the electric car?
Who makes Steve Gutenberg a star?
We do, we do
Who robs gamefish of their site?
Who rigs every Oscar night?
We do, we do

Fri, 10/11/2013 - 19:15 | 4046756 Seer
Seer's picture

So, people believe this is all due to the POTUS?  Logic test!

What precipitated all of this?  De-regulation of the financials (which predated "Barry")?  The housing bubble (which predated "Barry")?  TARP (which predated "Barry")?

Yeah, "Fuck Barry!" is a great slogan, one that works well for the other part of this infested System.

Hurling invectives, if not childish, does absolutely NOTHING to get to the REAL ROOT of the "problem."  For those who don't follow history, and would therefore be unable to identify the real root problem, I point out the following as the epochal moments:

1) 1971 - US goes FULL fiat;

2) 1971 - US oil production peaks (the tide turns, which ultimately tacks the balance of trade the other way [net oil exported to net oil importer]);

3) 1971 - US "representatives" establish market relationships with China.

1971 is a symptom.  The "disease" is based in cancer- perpetual growth within a finite host (in the case of the US, and of the world, that "host" is the planet).  Yes, folks can dig back to 1913 but the paradigm of perpetual growth on a finite planet existed BEFORE the creation of the Fed.

Failure to understand these things only insures that we get something like the Bolshevik Revolution- expectations of a big break from a controlling/ruling class to one "for the people."  Because folks there FAILED to understand the REAL ROOT of their problems, and focused their energies on getting rid of the "fuckers,"  they fell victim to their own shitty "solution."

It's the System.  And as long as we expect it to deliver perpetual growth on a finite planet we are subject to shitty results: changing the team of horses does nothing to change the fact that the cart is loaded with (unwanted) shit.

"Fuck Barry!"  All hail the new Barry! (and thanks to the legislation enacted during the Bush administration the POTUS has unlimited power via "national security" declarations; just wait to see what the next POTUS is able to pull off)

Fri, 10/11/2013 - 14:36 | 4046015 hangemhigh77
hangemhigh77's picture

It's good to know that these guys tell us the truth.  I think we should hang them all anyway.  Fuck it.

Fri, 10/11/2013 - 20:23 | 4046865 Seer
Seer's picture

We turn into a bunch of vigilantes, kind of like Al Qaeda, and THEN what?  What happens after we've spent all our energies on drawing blood?

I'm not arguing against the notion of punishment for the lot of them, but after punishment has been meted out we'll STILL be broke, STILL with a fundamentally flawed System (predicated on the impossible- perpetual growth on a finite planet), and STILL with massive imbalances (how can one advocate on one hand for claw-backs from TPTB and other the other discourage takings from people?).  Oh, and there's less and less readily obtainable Natural Capital available with every passing day: raw resources, the kind that actually makes things work, are becoming more energy intensive to extract as energy itself is becoming harder to obtain).

Fri, 10/11/2013 - 14:36 | 4046021 Colonel Klink
Colonel Klink's picture

Fuck the FED!

Fri, 10/11/2013 - 14:36 | 4046022 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Munch ...

SCREAM

Fri, 10/11/2013 - 14:39 | 4046025 hangemhigh77
hangemhigh77's picture

Since it's a private company printing our money I say we put McDonalds in charge. This way we can get cheap toys with our QE.

Fri, 10/11/2013 - 15:34 | 4046214 masonman
masonman's picture

If it was a private company then you would be able to do exactly what they do and not go to jail for it. You are no longer a private company when you're constantly talking to congress, and when you're the only entity in the entire country that is allowed to do what you do.

Fri, 10/11/2013 - 14:39 | 4046030 tempo
tempo's picture

American's military power is and will remain for years the primary reason the dollar is the world's reserve currency which is the reason we can run massive deficits and live on entitlements w/o any real cost.

Fri, 10/11/2013 - 14:41 | 4046037 McMolotov
McMolotov's picture

It works until it doesn't.

Fri, 10/11/2013 - 14:53 | 4046073 Enslavethechild...
EnslavethechildrenforBen's picture

Drive through Detroit and look around. Reminds one of Rome.

Fri, 10/11/2013 - 14:59 | 4046109 dontgoforit
dontgoforit's picture

After the sack.

Fri, 10/11/2013 - 15:26 | 4046195 involuntarilybirthed
involuntarilybirthed's picture

without tourist

Fri, 10/11/2013 - 15:39 | 4046237 aardvarkk
aardvarkk's picture

I drove through Detroit in 2010 driving a big rig to pick up a load.  The pickup was in probably an "average" part of town, to judge from the various neighborhoods.  I had to drive over one avenue that was unpaved.  Sitting for a couple of hours waiting, I saw maybe half a dozen "gangsta" cars drive by, one fight on the street that ended in one guy unconscious and no cop response before he got up and walked away minus some teeth, and one girl, maybe 10 years old, whipping by on a crotch rocket and hitting a telephone pole and nearly killing herself.  The whole time I had my pistol beside my seat, white-knuckling the steering wheel and wishing I was somewhere else.  Even Cleveland would have been preferable.

I have not spent a lot of my life in inner cities but I've seen a few, and this environment struck me as super-toxic for an adult, nevermind a 10-year-old.  I imagine it's gotten significanly worse in the last three years, to judge by the stories I've read.  I sometimes wonder if that little girl is still alive, and if so whether she's now strung out on drugs or turning tricks yet.

Fri, 10/11/2013 - 21:59 | 4047063 Tim_
Tim_'s picture

"Even Cleveland would have been preferable."

Up to 28 men and boys 'filmed gang rape' of 11-year-old girl on their mobile phones

"A defence prosecutor today claimed up to 28 men and boys may have been involved in the filmed gang rape of an 11-year-old girl."

"At the moment only 18 suspects aged between 14 and 27 are accused of taking part in the rape last Thanksgiving in an abandoned mobile home in Cleveland, Texas."

Fri, 10/11/2013 - 21:34 | 4047007 Seer
Seer's picture

It happens slowly, then all at once.

Fri, 10/11/2013 - 14:45 | 4046047 Winston Churchill
Winston Churchill's picture

Then they better automate right now.Just go read some services/vet websites.

Zero morale in the forces for any further conflict.

A mutiny is very possible at this  point.

Fri, 10/11/2013 - 14:48 | 4046057 earnyermoney
earnyermoney's picture

The bill comes due when we lose an upcoming war ...

Fri, 10/11/2013 - 15:00 | 4046101 Wahooo
Wahooo's picture

We already lost a coming war - in Syria. And we won't be going back to Somalia anytime soon.

Fri, 10/11/2013 - 15:21 | 4046178 Enslavethechild...
EnslavethechildrenforBen's picture

Maybe if our Military bombed us here we could get some money flowing in our local economy. I mean our anti economy.

Fri, 10/11/2013 - 23:26 | 4047175 Seer
Seer's picture

Don't you just need to shout that you're being infested with terrorists/communists?  That's how all those low-life two-bit dictators do to get free USD.

Fri, 10/11/2013 - 14:49 | 4046064 McMolotov
McMolotov's picture

I actually think we already had a quasi mutiny behind the scenes over the Syria thing. It wasn't trumpeted by the media, but the military made it fairly clear they wanted no part in that mess. Who knows what would have happened if Barry pushed the issue.

Fri, 10/11/2013 - 23:24 | 4047172 Seer
Seer's picture

Perhaps much had to do with the Russians saying Nyet?

Fri, 10/11/2013 - 14:49 | 4046066 Grande Tetons
Grande Tetons's picture

Zero morale.  Blame it on the boss. 

Dying for your country has honor. 

Dying for cunts...less so. 

Fri, 10/11/2013 - 15:04 | 4046102 Enslavethechild...
EnslavethechildrenforBen's picture

Dying for a selfish, self centered, self serving, cock sucking, filthy rich, lying, cheating, thieving, scabbed up, stitched up, blue cheese smelling, godamned, motherfucking, shit eating cunt...

Fri, 10/11/2013 - 21:06 | 4046964 Incubus
Incubus's picture

good, good, let it out..

 

...let it flow... /gags

Fri, 10/11/2013 - 14:59 | 4046111 roadhazard
roadhazard's picture

It's been that way since Korea.

Fri, 10/11/2013 - 16:58 | 4046442 Kirk2NCC1701
Kirk2NCC1701's picture

"Dying for your country has honor."

Please elaborate on which country that's worth dying for, that we're talking about these days. /rhetorical

Fri, 10/11/2013 - 21:38 | 4047021 Seer
Seer's picture

Mutiny definitely means no pay.  Let's face it, MANY enlistees sign on the dotted line because it's the only "job" they can find.

I one knew a guy who worked for an aerospace company that does military weaponry for the US govt.  One day he was driving to work and then just decided to turn and go back home, never to return to that job.  He finally understood the cognitive dissonance that he was dealing with, being anti-war.  Very few people like this guy...

Fri, 10/11/2013 - 14:41 | 4046031 RockRiver
RockRiver's picture

The Fed has painted itself into a corner and it should be interesting to see them squirm when it has to be delt with.

Fri, 10/11/2013 - 14:47 | 4046059 Winston Churchill
Winston Churchill's picture

Thats what wars ae for.

Warred out though.

Fri, 10/11/2013 - 21:41 | 4047025 Seer
Seer's picture

The System has painted itself into a corner.

The Fed is but a facilitator of the perpetual growth paradigm that is the core of the System.

Fri, 10/11/2013 - 14:40 | 4046035 lolmao500
lolmao500's picture

Here's what FED's advisors read at night to get their groove on : Dinosaur Erotica.

http://disinfo.com/2013/10/next-burgeoning-literary-trend-dinosaur-erotica/

The Next Burgeoning Literary Trend: Dinosaur Erotica
Fri, 10/11/2013 - 14:45 | 4046048 Lmo Mutton
Lmo Mutton's picture

"Taken by the T-Rex" sounds more like a dinosaur cookbook to me but I am not the expert and stuff.

Fri, 10/11/2013 - 14:45 | 4046049 earnyermoney
earnyermoney's picture

LOL

Fed intern hitting the red arrow on all the posts.

Fri, 10/11/2013 - 14:52 | 4046067 Unprepared
Unprepared's picture

Just an algo:

If ZH.new(post) then -1

Except when ZH.name(poster) = "MDB" OR ZH.troll_id() like '%.gov'

Fri, 10/11/2013 - 21:07 | 4046966 Incubus
Incubus's picture

i wish i worked for .gov

Fri, 10/11/2013 - 14:50 | 4046068 Bunga Bunga
Bunga Bunga's picture

Get over it, they just pave the way for QEY1.

Fri, 10/11/2013 - 14:54 | 4046072 Randoom Thought
Randoom Thought's picture

So, second tier banks were all brought in to see if they had any clue what the central bank/international bank plan is and if they posed any threat to it ... whoopie doo doo.

By their response, the answers are: No and Hell No.

Fri, 10/11/2013 - 14:53 | 4046078 venturen
venturen's picture

Hey I have all the chips...why doesn't anyone want to play poker?

Fri, 10/11/2013 - 14:57 | 4046090 cougar_w
cougar_w's picture

That report has a big read "DEFLATION" stamp right across the middle of it. This economy has ground to a nearly full stop. The Fed pumping $85B into it is the only thing holding it together.

We're so fukt right now I don't think there is a single human being has the ability to fit the entire fukt-ed-ness into their brain case all at once.

Fri, 10/11/2013 - 15:15 | 4046161 delivered
delivered's picture

Agreed. Deflation is the FEDs biggest worry right now as inflation can to a certain degree, be managed and tollerated but deflation brings it all down. Once deflation takes hold, the ability to repay debt comes under extreme strain as everyone's revenue base (think tax revenues for governments, wage earnings for individuals, and sales revenues for businesses) compresses. And due to the extreme level of leverage throughout the entire world economy, the first sign of deflation will be amplified and exported very quickly.

Of course, this will ultimately lead to soverign debt defaults and currency crisis's around the globe as with reduced tax receipts against fix debt payments, government's will be left with no choice but to default (by choice or forced). And the final chapter will be hyper-inflation triggered by the inevitabale currency crisis. Inflation is what's needed and the FED knows this. Deflation is their biggest fear so every tool, solution, etc. will be deployed to avoid this. Maybe they can continue to work their magic for another year, two, or even five but eventually, when there is too much debt without enough assets to repay the debt, deflation will be the last man standing.

Fri, 10/11/2013 - 15:23 | 4046181 dontgoforit
dontgoforit's picture

Remember Jimmy Carter & 'Stagflation'?  14% mortgage rates.  What an eff'n nightmare that was.  Now, another dem president and the nightmare on elm street continues to grow even more weird.

Fri, 10/11/2013 - 15:38 | 4046228 Herd Redirectio...
Herd Redirection Committee's picture

This is why I frame it as a choice between the collapse of the government (in its current gargantuan form) or the currency (in its current world reserve currency role).

And its quite clear the government (and the Elite controlling it) would sooner destroy the currency than their own power structure, their graft distribution network and provider of barriers to entry that is the Federal Gov't.

Fri, 10/11/2013 - 16:57 | 4046438 W74
W74's picture

At least ol' Jimmy knew who controlled America behind the scenes....and admitted it.  Only the enemy-controlled media is preventing from going even deeper than he is here.

http://www.youtube.com/watch?v=kDKw0f95k7Q

Salt-of-the-Earth.  He may have been a less than mediocre president, but at least Carter was more honest and genuine than the rest.

Fri, 10/11/2013 - 22:48 | 4047123 Seer
Seer's picture

Yeah, the problem sure looks like it's because of the Dems...  Let's not look at the facts that:

1) US effectively defaulted in 1971, except that, it never really restructured, it only doubled down by going FULL FIAT;

2) The world's resources are finite and systems predicated on perpetual growth on a finite planet can NOT succeed/endure.

Were those 14% mortgage rates available?  That is, today there's "low" rates, but no one can get them (unless you're a big developer).  Also, mortgage interest, as is the case today, can be written off.

The big push toward financial deregulation and financial trickery got on board when Reagan stepped into office: not blaming Ronald, just pointing out that this is when it all got momentum.  It's quite possible that this was the only way to simulate economic activity: note that I got the spelling correct for "SIMULATE"- it wasn't STIMULATE(d) as in aiding something workable.

The No-Way-Out sign was posted in 1971.  It's taken us this long to finally see it...

Fri, 10/11/2013 - 16:24 | 4046343 eclectic syncretist
eclectic syncretist's picture

Who pays Ben Berananke's salary?   Answer: taxpayers

Who determines what Ben Bernanke gets paid?  Answer: Congress

Who elected Ben Bernanke?  Answer: the president, with congressional approval

Who does Ben Berananke work for?  Answer: NOT THE GOVERNMENT

Fri, 10/11/2013 - 15:16 | 4046164 q99x2
q99x2's picture

The FEDs going to print me a happy life at UCLA.

Yellen Yellen Yellen

Keep those doggies rollin.

 

Fri, 10/11/2013 - 15:20 | 4046170 SandiaMan
SandiaMan's picture

Hell gas is below 3.00 a gallon here because all the feds vehicles are parked. Keep them parked and gas goes to 2.50 a gal soon! How many gallons of gasoline does the government use?

Fri, 10/11/2013 - 21:08 | 4046967 Incubus
Incubus's picture

for their turbo powered ass-ramming dildos?

 

I think they're up to 50,000 thrusts per gallon.

Fri, 10/11/2013 - 15:29 | 4046201 involuntarilybirthed
involuntarilybirthed's picture

The 10Y is the story teller.  It will speak first.

Fri, 10/11/2013 - 15:49 | 4046266 29.5 hours
29.5 hours's picture

 

Wow, that FAC report was dynamite. Clear and powerful in implication. If it had been published on the front page of the NY Tmes in a timely manner, it could have been both influential and educational. Ahh, maybe that is why it wasn't...

 

 

Fri, 10/11/2013 - 16:03 | 4046287 alangreedspank
alangreedspank's picture

The fact that only Schiff and assorted authors/bloggers like him reported on it and that the MSM did not touch it makes it even more relevant.

Fri, 10/11/2013 - 15:50 | 4046267 squid427
squid427's picture

Honest question, how is the purchasing power the dollar going up a bad thing? Or is that not deflation?

Fri, 10/11/2013 - 16:18 | 4046301 29.5 hours
29.5 hours's picture

 

An increase in the purchasing power of the dollar may very well be "not a bad thing" for individuals with fists full of dollars. But for all individuals and institutions living on debt, (as explained in a post above) the effect will be very bad--and for transactions involving leverage, a promise of unpayable levels of debt, now in ever more (relatively) valuable dollars.

 

Fri, 10/11/2013 - 21:12 | 4046975 Incubus
Incubus's picture

Why wait? Hyperinflate!

Fri, 10/11/2013 - 15:57 | 4046280 alangreedspank
alangreedspank's picture

The Fed uses metrics that mean nothing and I think they know it by now. So they just concentrate on bubble blowing because even if they want to do good, using those useless models makes them completely blind.

Food producers in Japan have been hiking their prices 10, 15% for the first time in 10, 15, 20+ years. And what does the CPI pickup ? 0.8. Of course they know their tools are completely useless, they just coast comfortably til retirement.

Fri, 10/11/2013 - 16:21 | 4046336 squid427
squid427's picture

but wounld deflation be a correction in overvalued assests bonds etc. and a natural phenomena if there were not fed intervention 

Fri, 10/11/2013 - 23:03 | 4047147 Seer
Seer's picture

The Fed represents the wealthy.  The wealthy do NOT want deflation since most of their assets would get deflated.  It's the entire point of the exercise, it's why $85 billion per month is being injected into the banks- just realize that this is no more than "filler" to keep the balance sheets from showing big fucking holes (due to real deflationary forces at work).  Someone forgot to tell these folks that the story of the little boy with his finger in the dike (holding off the bad fate) was a fairytale!

Fri, 10/11/2013 - 16:43 | 4046400 Seize Mars
Seize Mars's picture

I'm just waiting for the next false flag murder of more Americans by our own government. Of course the blame will be placed on the bill of rights.
Come on you guys, what's next? More schoolchildren?

Fri, 10/11/2013 - 21:11 | 4046976 Incubus
Incubus's picture

please pick some boomers this time

Fri, 10/11/2013 - 23:06 | 4047149 Seer
Seer's picture

So you can carry more of the debt load?

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