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The Fed NEEDS Inflation Otherwise the Bond Bubble Will Burst
As we keep emphasizing, the Fed’s real concern is the bond bubble… NOT stocks.
We get more evidence of this from Janet Yellen’s press conference after the Fed’s Wednesday FOMC meeting.
During the conference, Yellen repeatedly stated that lower oil prices were “positive” for the US economy. This is simply astounding because the Fed has repeatedly told us time and again that it was IN-flation NOT DE-flation that was great for the economy.
And yet, on Wednesday, the head of the Fed admitted, in public, that deflation can in fact be positive.
How can deflation be both positive for the economy at the same time that the economy needs MORE inflation?
The answer is easy… Yellen doesn’t care about the economy. She cares about the US’s massive debt load AKA the BOND BUBBLE.
Yellen knows deflation is actually very good for consumers. Who doesn’t want cheaper housing or cheaper goods and services? In fact, deflation is actually the general order of things for the world: human innovation and creativity naturally works to increase productivity, which makes goods and services cheaper.
However, DEBT DEFLATION is a nightmare for the Fed because it would almost immediately bankrupt both the US and the Too Big To Fail Wall Street Banks. With the US sporting a Debt to GDP ratio of over 100%... and the Wall Street banks sitting on over $191 TRILLION worth of derivatives trades based on interest rates (bonds), the very last thing the Fed wants is even a WHIFF of debt deflation to hit the bond markets.
This is why the Fed is so obsessed with creating inflation: because it renders these gargantuan debt loads more serviceable. In simplest terms, the Fed must “inflate or die.” It will willingly sacrifice the economy, and Americans’ quality of life in order to stop the bond bubble from popping.
This is also why the Fed happily talks about stocks all the time; it’s a great distraction from the real story: the fact that the bond bubble is the single largest bubble in history and that when it bursts entire countries will go bust.
This is why the Fed NEEDS interest rates to be as low as possible… any slight jump in rates means that the US will rapidly spiral towards bankruptcy. Indeed, every 1% increase in interest rates means between $150-$175 billion more in interest payments on US debt per year.
If you’ve ever wondered how the Fed can claim inflation is a good thing… now you know. Inflation is bad for all of us… but it allows the US Government to spend money it doesn’t have without going bankrupt… YET.
However, this won’t last. All bubbles end. And when the global bond bubble bursts (currently standing at $100 trillion and counting) the entire system will implode.
If you’ve yet to take action to prepare for the second round of the financial crisis, we offer a FREE investment report Financial Crisis "Round Two" Survival Guide that outlines easy, simple to follow strategies you can use to not only protect your portfolio from a market downturn, but actually produce profits.
You can pick up a FREE copy at:
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Best Regards
Phoenix Capital Research
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Maybe they will own the world when it crashes.
Yellen and the rest need "lie assistants."
But then her/their "inflation good, low prices good" dichotomy is just more proof that all they utter are lies to cover their schemes and theft.
The banksters need to repay us.
Guillotine the Fed!
Guillotine the Fed!
This is why Yellen is now saying low oil prices are good. The author (Phoenix Capital) conflates the gov. with banksters. Banksters RULE, not the gov. When/if the bankers clear all their bad loans, they will let rates rise no matter how much pain it causes the gov. tax slaves. They know, from the last election, that they will have to temporarily back away from so much counterfeiting. At least, until the next 50-75% stock crash. Or, maybe, just until the CIA/FBI can blackmail all the new CONgress Critters.The Fed is taking its orders from the White House....if you want change change the politicians in office. Here's the problem, for them to get elected they need to give shit away to special interest groups for campaign dollars. Even when we are about to go bust the corrupt politicians do what ever they can to be able to give shit away to maintainthe power structure. As long as it takes lots of money to get elected and as long as the corrupt politicians keep giving shit away and drivig up our debt we're fucked. Creating an enabled and entitled society comes with a steep price...the politicians that pushed for it should be held to account when it all ends badly.
Jim Willie said years ago the Treasury bond market will be defended til the end.
You're a moron. Nothing kills bonds like inflation.
Go back to selling cars
Yep. Price is inverse to yield.
The question is were they lying to us then or lying to us now and the answer is both. Yellen will undoubtedly try another QE but just like last time the cash will be vacuumed up by the mega-banks and the super rich with no effect on the economy....
When dammit, when??? Would you writers please grow some balls and share with us your ideas of when!!!
Like a thief in the night, you will never know.
when it is too late, then you will know...
plan on changing the plan, ha..
OH GOD THE END IS NEAR !!! WHAT CAN I DO TO SAVE MYSELF FROM RUIN ?!?!?!
OH, all I need to do is buy shiny lead, and it will protect me while all the world lies in ruin ?
YIPPEEE !!! Gimme shiny lead, the saviour metal - HALLELULYA !!!!
Debt is deflationary. That is why bonds are toxic. The best (least painful) way to unwind debt is to devalue money, hence the lust for inflation. But, inflation is good for gold, because the price of gold reflects the liquid money supply. So, gold-bugs love inflation, despite their fierce protestations to the contrary.
I have a reputation for making fun of gold-bugs, but only because of conceptual self-contradictions, such as gold-bugs hating inflation. If we get a gold-backed global currency, and I think this is the direction the BRICS are moving towards, and if the petro-dollar collapses, a gold-backed global curency is the only thing that can fill the void, then those with gold MAY be sitting in a fairly good position, IF they can (ie are allowed) to sell their gold at a market price, and not a NWO mandated confiscation price.
So, good luck stackers, and i mean that sincerely. i truly hope your gold hedgeing strategy works out. I say that because if it does work out it will mean that the best of all possible worlds is taking shape, and not the worst of all possible worlds. Stackers, my fate is in your hands, so keep up the good work, and let's keep our fingers crossed.
Sooner, or later.:
http://naturalsociety.com/obama-increases-allowable-levels-radiation-dri...
Wouldn't it be nice if there were some real fair alternatives to the bullshit markets and investment options Wall Street dishes out? I wish. In liu of that, I'll move towards gold, and whatever else I can find that will still be around when their house of cards comes crashing down. It may not be perfect, but, at least I'll be alive to tell the story.
It's amazing how good spam tastes when there is nothing else to eat.
Spam's best FRIED!
"Why is the theft being allowed to continue?"
Because the sheeple ALLOW it to continue.
Until the North Koreans hack all the US reality shows
(starting with the Kardashians)
THEN, you will see the sheeples pour into the streets.
Not before, Not until.
Yeah, GOP...could you please hack some of the bullshit News channels and crap TV Programming? you can start with MSNBC and MUD LOVIN' REDNECKS on the DISCOVERY Channel