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Why The Fed Will Never Succeed
Submitted by Alasdair Macleod via GoldMoney.com,
The Fed will never succeed in its attempt to manage inflation and unemployment by varying interest rates.
This is because it and its economists do not accept the relationship between, on one side, the money it creates and the bank credit its commercial banks issue out of thin air, and on the other the disruption unsound money causes in the economy. This has been going on since the Fed was created, which makes the question as to whether the Fed was right to raise interest rates recently irrelevant.
Furthermore, it's not just the American people who are affected by the Fed's monetary management, because the Fed's actions affect nearly everyone on the planet. The Fed does not even admit to having this wider responsibility, except to the extent that it might have an impact on the US economy.
That the Fed thinks it is only responsible to the American people for its actions when they affect all nations is an abrogation of its duty as issuer of the reserve currency to the rest of the world, and it is therefore not surprising that the new kids on the block, such as China, Russia and their Asian friends, are laying plans to gain independence from the dollar-dominated system. The absence of comment from other central banks in the advanced nations on this important subject should also worry us, because they appear to be acting as mute supporters for the Fed's group-think.
This is the context in which we need to clarify the effects of the Fed's monetary policy. The fundamental question is actually far broader than whether or not the Fed should be raising rates: rather, should the Fed be managing interest rates at all? Before we can answer this question, we have to understand the relationship between credit and the business cycle.
There are two types of economic activity, one that correctly anticipates consumer demand and is successful, and one that fails to do so. In free markets the failures are closed down quickly, and the scarce economic resources tied up in them are redeployed towards more successful activities. A sound-money economy quickly eliminates business errors, so this self-cleansing action ensures there is no build-up of malinvestments and the associated debt that goes with it.
When there is stimulus from monetary inflation, it is inevitable that the strict discipline of genuine profitability that should guide all commercial enterprises takes a back seat. Easy money and interest rates lowered to stimulate demand distort perceptions of risk, over-values financial assets, and encourages businesses to take on projects that are not genuinely profitable. Furthermore, the owners of failing businesses find it possible to run up more debts, rather than face commercial reality. The result is a growing accumulation of malinvestments whose liquidation is deferred into the future.
Besides the disruption to healthy business development, monetary inflation also transfers wealth from the owners of the existing money stock into the hands of the initial beneficiaries of extra money and credit. The transfer of wealth is predominantly from savers and wage earners in the non-financial part of the economy, reducing their ability to spend. The beneficiaries of this wealth transfer are the banks and their favoured borrowers, for whom the credit has been created. How it is that destroying widespread ownership of wealth is meant to provide meaningful, lasting improvement to an economy is a mystery never properly explained.
Monetary inflation not only encourages malinvestment, but by destroying the purchasing power of savings it encourages consumers to turn from being savers into borrowers. They have learned that money no longer retains its value. The madness of weak-money policies becomes even more clear when one contrasts empirical evidence of the post-war success of Germany's economy, which was rebuilt on the accumulation of savings, compared with the failure of the other European economies that tried unsuccessfully to inflate their way to prosperity.
Eventually, the tendency for monetary inflation to undermine the purchasing power of a currency leads to a shift in consumer preferences away from holding cash and bank deposits in favour of accumulating physical goods. This is actually the effect that central banks try to achieve, in the mistaken belief they can control the outcome. However, only a small change in this balance of preferences is enough to trigger a dramatic downward shift in the currency's purchasing power, raising the rate of price inflation to far higher levels than previously thought likely by the monetary planners. It is the threat, or even the actuality of this development, that always forces the central bank to raise interest rates to the point where the balance of preferences between money and goods is restored. Inevitably, this triggers a crisis where malinvestments and their associated debt threaten to come dramatically unstuck.
One would have thought it blindingly obvious that the boom and the bust are two sides of the same coin. In other words, if the artificial boom had not been created by monetary stimulus, the crisis of a bust could not occur either.
Where are we in the credit cycle?
The last crisis was triggered by the Fed's increase in the Fed Funds rate in 2006, when it peaked at 5¼% that August. It was held at that level until the following June and reduced sharply thereafter, specifically to stop the unwinding of widespread malinvestments made by industry, investors, and the banks. Interest rates have now been increased this month for the first time since being reduced to the zero bound in December 2008.
We must put ourselves in the Fed's shoes to try to understand why it has raised rates. It has seen the official unemployment rate decline for a prolonged period, and more recently energy and commodity prices have fallen sharply. Assuming it believes government unemployment figures, as well as the GDP and its deflator, the Fed is likely to think the economy has at least stabilised and is fundamentally healthy. That being the case, it will take the view the business cycle has turned. Note, business cycle, not credit-driven business cycle: the Fed doesn't accept monetary policy is responsible for cyclical phenomena. Therefore, demand for energy and commodities is expected to increase on a one or two-year view, so inflation can be expected to pick up towards the 2% target, particularly when the falls in commodity and energy prices drop out of the back-end of the inflation numbers. Note again, inflation is thought to be a demand-for-goods phenomenon, not a monetary phenomenon, though according to the Fed, monetary policy can be used to stimulate or control it.
Unfortunately, the evidence from multiple surveys is that after nine years since the Lehman crisis the state of the economy remains suppressed while debt has continued to increase, so this cycle is not in the normal pattern. It is clear from the evidence that the American economy, in common with the European and Japanese, is overburdened by the accumulation of malinvestments and associated debt. Furthermore, nine years of wealth attrition through monetary inflation (as described above) has reduced the purchasing power of the average consumer's earnings significantly in real terms. So instead of a phase of sustainable growth, it is likely America has arrived at a point where the economy can no longer bear the depredations of further "monetary stimulus". It is also increasingly clear that a relatively small rise in the general interest rate level will bring on the next crisis.
Therefore, we are on the edge of the bust of the boom-bust credit-driven business cycle, when all historically accumulated malinvestments begin to liquidate. We are already seeing low-quality borrowers facing difficulties in trying to extend their debt. We are already seeing global trade, which is not immune to the Fed's debt-perpetuation and wealth-transfer policies, contract. We are already seeing the collapse of collateralised loan obligation prices (CLOs) in the low-grade corporate bond market, and the halts called to investor redemptions. If rates for corporate borrowers rise by three or four percent as they have for some recently, you already have a developing debt crisis.
As to whether or not the Fed should be raising rates, it matters not. Instead of the hoped-for gently rising path for interest rates through 2016, it is more than likely this month's rise will be soon reversed, and a whole new round of "extraordinary measures" introduced. The Fed will probably feel greater confidence it can manage a crisis this time than it did at the time of the Lehman crisis, because despite the rapid expansion in the Fed's balance sheet, the dollar is stronger today than in 2008. The fear that open-ended monetary intervention deployed to save the banks and large corporations from insolvency would undermine the currency proved to be unjustified.
Yet more extraordinary methods will probably extend to renewed talk of the Taylor rule and even negative interest rates. From the Fed's narrow point of view, negative interest rates have the virtue of not only transferring wealth by monetary stealth from increasingly impoverished inhabitants of Main Street to those in Wall Street, but it will also rob their bank accounts more directly as well. For an answer as to why the Fed thinks this will save us all, I have no idea. Ask the Fed.
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Insanity is doing the same thing over and over, but expecting a different result. Of course this doesn't apply to the Fed since they are keepers of the scrolls in the temple of Keynes.....
I read somewhere that even Keynes would not approve of this absurdity currently transpiring at the Eccles Bldg.
Why The Fed Will Never Succeed
Because we live in a finite planet. And a growing population that is total unaware of its demise.
Good luck try to reason with them.
And good luck be around when they find out there’s no more growth. And there will be less and less.
The Fed's job is to extract as much wealth from the US public as possible and leave them footing the bill for making the tribe wealthy.
None of this other crap is even on their agenda.
Criminal Cartel that needs to be dismantled and the members thrown in jail. They now operate in the open because their veil of secrecy is gone and the American people are too stupid and scared to do anything about them.
Wake up. Read on:
http://www.veteranstoday.com/2015/12/17/house-of-cards-empire-of-lies/
The Fed is a political cult with unfettered control of a lotta money: Ours.
The FED has already won. THey have the money, thye have the power, they have the law, they have the stysem to wipe us all away. Even if we win in the end, they still win. They will lose in the afterlife however.
The Fed is a central bank. The argument of having a US central bank goes back to the beginnig of our Republic. The Federalists (Alexander Hamilton) wanted it and the Antifederalists (Thomas Jefferson) did not want it.
Federalists vs Antifederalists has been the main theme of the history of the United States.
We are fu.ked! The Federalists won: perpetual war and debt spending until our Republic implodes.
The Fed is a central bank
Define the nature of this central bank...
Is it a central bank under government control, to then monetize debts?
Or, is it a central bank created by its private bank system? Is the FED a central bank used by TBTF banks, to then guarantee profits at the expense of society?
Other central banks in history have had a much different nature. So, when somebody says something, they should define what they mean.
"We succeeded some folks..."
Sure they are.
They are suceeding by destroying the United States.
Quite well I might add.
Each and every day that they and their bankster system remain in business is all the success that they desire and need.
The idea that the Fed can't conjure unicorns only displays the immaturity of Macleod's worldview. I can only hope that he's either young enough to mature beyond this, or old enough that he will soon be out to pasture.
Awful title.
The FED has and always will succeed it's only a matter of what goals you're using to define success.
Agreed. That's the first thing that struck me.
As intended, they've succeed in transferring unprecedented amounts of real wealth to themselves, i.e. its shareholders. These, in turn, will have their cashflow and ensuing lifestyle ensured for a lot longer than you will with yours.
And that, my friends (may I call you Friends?), is really the penultimate goal of any being: to create and perpetuate an opulent lifestyle for oneself and family. And if possible, for those near & dear to us.
Genetics and Darwinism at work. But feel free to package it within your preferred religious paradigms/models, sold by your favorite shaman -- er, Minister/Priest/Rabbi/Imam -- if it makes you feel better.
Kirk2NCC1701, they've succeed in transferring unprecedented amounts of real wealth to themselves
Exactly. Wonder why?
Because they know it’s over. Because there won’t be nothing left for a good and decent life.
“Caviar & Champagne since 1913”
"The Fed will never succeed in its attempt to manage inflation and unemployment by varying interest rates."
Umm... maybe the Fed won't succeed because they're a private, for profit corporation that doesn't give a flying fuck about unemployment or inflation as long as the shareholders are making money.
The fed IS really good at shaking anything and everything from weak hands and into strong hands.
Bitches, bitchez!
The FED is insolvent - period.
The Federal Reserve is NOT FEDERAL and has NO RESERVES
and that is where the deceptions begin, not end.
The fact that anyone thought it was possible to manage an economy later than about 1950 should be an embarassment to our civilization.
Hubris to the power of Dunning-Kruger, ignoring all science and math knowledge of complex systems and all of history and the many who explained the political reasons entirely independently of those.
A triumph of groupthink over reality.
The Fed doesnt know Newton's Second Law of motion applies perfectly to economics. For every action, there is an opposited and equal REACTION.
Rates can bolster short term, but low rates too long become a hinderance to economic expansion.
Low rates also foster the inefficient, allowing them to continue to produce, and thus having a deflationary effect.
It brings higher stock prices which brings more IPOs.....thus more stock supply.
They are ivory tower geniuses ... but have not practical experience
the premise of the first sentence is crap.
To say that the Fed will never succeed is, I think, is incorrect. I think a more accurate headline would be "Fed will never succeed as soon as people stop valuing paper and promises". That is the one of the main things which is keep this ponzi scheme going. If you were to ask the average person on the street "Which is more valuable?" and hold out an ounce of gold and a $100 bill, most would opt for the $100 bill. And therein, lies the problem.
As long as people think paper has more value than gold and silver, the Fed can keep succeeding. Don't believe me? Look no further than the COMEX. There, apparently, paper gold and silver has as much value as physical gold and silver! Does that sounds right to you? Of course not, but the current paradigm is exactly that. A promise is just as good as the actual object.
In fact, it gets even worse. Even if you take gold and silver out of the equation and just deal with currencies, the problem is still there. A $100 bill in your hand is worth as much as a bank account which tells you have $100 in it. Again, a promise is just as good as the actual object. And the cherry on the cake? Because of fractional reserve lending (and fractional reserve gold and silver), if just a fraction of the "creditors" were to call in the gold and silver or money from their accounts, the whole system collapses. It's almost comical.
Now, to be fair, I think this system still has a couple of bullets left in their chamber and it's part of the reason why I've been away from Zero Hedge for a while. If you continually read doom porn, you'll whip yourself up into a frenzy and not get a balanced picture. I think TPTB have enough left to stave off the collapse one more time, then that's it. However, I'm only 50-50 on that one. I'd like to think that the TPTB have the class not to do that and let this play out. But I doubt it....
Anyway, on a more personal note, although I don't celebrate it, I wish every ZHer a pleasant Christmas and a happy new year. I hope you get what you want in 2016. Even if that includes a financial crash..... ;O)
As the economy falls, foreign investors flock to US bonds ('promises') for protection. That is what's keeping the boat afloat. It's also why Paul Ryan rolled over so fast on the Democrat budget. Gotta take advantage of that protection demand! It's like an freshly unemployed family borrowing as much money as possible before the banks cut off their credit.
The Gold is money crowd, and the Austrians always mix truth in to make their point. I find this kind of behavior not honest. Their intents are honest: but if one holds ideas at variance with reality and history, they should be rejected.
What they say about the FED cannot be argued with.
But, when they say things like this:
The madness of weak-money policies becomes even more clear when one contrasts empirical evidence of the post-war success of Germany's economy, which was rebuilt on the accumulation of savings, compared with the failure of the other European economies that tried unsuccessfully to inflate their way to prosperity
and leave out key data, like ALL OF THE NAZI debts that were erased from the books, and were then given loans, and then the loans forgiven - to then allow the German miracle, then they cannot be taken seriously.
(That the German people are unaware of this history - to which they then turn around and screw over Greece - is more proof of the hypnotic pall.)
Money is not metal. Money is law.
Sorry if it is an inconvenient truth. Maybe reality sucks, but stand up and take it.
Money has to be volume and path controlled. It also has to be controlled for type (there can be more than one type of money as defined by law). Volume, Path, Type.
If the three variables: Volume, Path, Type are not accounted for, then it is just so much B.S.
Interest rates are a very weak knob for volume controlling a credit money economy and false money system. It is part of usury funded hypnosis that people still think this sort of system is viable.
Debt money systems are not viable and should be thrown onto the ash heap of history. This statement sure as hell does not sanction an "international" gold system, shown by history to have its own weaknesses and internal contradictions.
Gold is floating money without debt.... fine and good, but it is just one element...one money type as agreed to by common law.
www.sovereignmoney.eu
Makes me wonder how we had an international economy before we had international law.
Money is agreement about what it takes to move goods. IOUs work fine for some aspects of trade, if we trust each other. IOUs worked for international trade and local general stores.
We don't need gov money, can do it ourselves just fine.
Makes me wonder how we had an international economy before we had international law.
Before money, people lived in tribes and remembered credits and debts. This can work for about up to 70 people or so, beyond that they stop forgetting who owes who what.
Talleys are a way of marking down credits and debts, which allows the tribe to extend goods and services, and gives it a patina of law.
In other words, if somebody doesn't make good on deal, then the trival chieftan or priest steps in and dispenses legal judgement or force.
Again, sorry if reality sucks...but this is what happened. Law was around from the very beginning, even if it is only contract - or high agreement. This is our evolutionary heritage as we had to agree to work together to survive.
Money came along later as legal codes developed further. Evidence is that it mostly popped into being in temples, to then allow temple "welfare class" to trade outside of their zone.
The welfare class were temple workers, like widows and children, who made things - and these goods (blankets, etc.) were traded some distance.
Temples had gold and silver available, especially gold - as jewlery was bequeathed to said temples when people died.
Gold was easily found in alluvial plains and fashioned into jewlery long before money came into existence.
We don't need gov money, can do it ourselves just fine.
No.... IMHO that is an untrue statement. Any advanced society needs money as it allows division of labor, and the gains that brings.
Advanced money is law money. Ignoring the true nature of money is denial.
Digging a little deeper, it becomes obvious that government has a role, but must be constrained to its role. Forces are to be balanced, and "ourselves" money means a credit system - not a law system.
Witness today's private credit system for the eventual outputs of "ourselves" private bank money.
Today's financial capital is one of unrestrained rentiers "taking" and screwing over others. It is not consensual nor civilized society working together to solve problems.
With Gold money system in the past, international law consisted of force, such as mercantile countries, like Britain, building ships - then sinking, or ramming others, to then take their gold/silver.
International money was gold and silver, with our Jewish friends taking exchange rate rents on their east/west caravan trade.
Since gold was "agreed" to by common law, then it was money.
This common law agreement ignores that contracts settled by money are usually local or maybe national in scope; thus settling legal contracts is the province of government, or whatever legal body is extant.
One more time : money is whatever moves goods. That is the function of money, therefore anything that does that must be equivalent to money, whatever you want to call it.
No crap about law or anything lese, we moved goods long before any kind of law other than whatever you problems you could cause the lawbreaker.
There is no theory needed her. And no "no true scotsmen" quibbles. Money moves goods. We denominate things like IOUs in dollars, doesn't mean they are dollars. But they are money.
I think what you've said is amazingly cogent and consise.
The forgiveness of debt is one pathway to new monetary law which is to be kept closed at all costs.
It doesn't matter though it will happen because the current experiment has gone completely off the rails into utter lawlessness and thus will extinguish itself no matter what anyone does anyhow.
"Money is not metal. Money is law."
Money can be many things BUT primitive money existed before law whether it be sticks, shells or PM.
Law is what ruined money and eventually society.
I see your point but law is a very broad term encompassing both bad and good ones.
The only real laws are natural laws that flow from a harmony with creation. Laws can either flow with the natural order of things or not and exist on a continium from complete idiocy and disharmony or chaos to sublime perfection and perfect harmony that is of course never obtained.
An exmple of a real law is gravity.
You can't break it you can work within it's defined parameters but you can't break a real law.
Manmade laws are subject to both interpretation and change.
So I think he isn't saying anything more than money is what we agree it is although I don't want to speak for him perhaps he'll explain further if he wants.
However fundamental truth still remains.
The ultimate law is of course truth and any man made laws based on truth tend more towards harmony.
My main concern with the world at present is it's dangerous spike away from truth towards disharmony.
We are increasingly ruled by lies, and to get biblical a second for only illustrative purposes, Satan is the father of lies.
Just briefly I am not religious but I am spiritual and I consider the bible to be a great source for finding some human wisdoms especially when not taken as literal document but as a documentation of distilled human spiritual wisdom.
So we torment ourselves by our preference for lies over the truth and any time any people prefer knowingly or not, lies over truth they will suffer miseries of all kinds, and it's no accident money would be the first to go.
To properly orient yourself and attain an actual goal requires knowing as much truth as you can know and harmonizing with the truths you can see all around you. Our current monetary system is a bastard lie from hell in other words.
First you have to be a seeker of truth though to find it then you have to be willing to keep an open mind and continue to seek it for it is more of a path than a destination.
If what you are attempting to do in any endeavor deviates from this then you begin to go down false paths.
So it's not necessary that the people know everything it is only necessary for them to spot actual truth seekers and for them to follow those instead of the liars.
Modern life is so complex that it's far too easy to lie and remain concealed. That is the real problem we face and it will only be solved by a combination of spiritual "not religious" truth seeking and the ability to adhere to harmonize with the natural laws that surround us.
So if I may we must seek better laws and more worthy authors of laws to begin to gain traction forward.
Vote down!
From rejected:"Money is not metal. Money is law."
Money can be many things BUT primitive money existed before law whether it be sticks, shells or PM.
It easy to understand your confusion, since most people imagine things, especially when it comes to money. Feeeling something or imagining it, can cause issues, especially when large populations are under what I call "hypnosis."
Credits and Debts existed before money. Talley existed before money. A stick could be a talley, where information was coded, such as who owes who what and when. A talley then would be evidence of contract.
Money is general demand, or pay to the bearer upon demand, and it has to have high agreement and law.. basically a more advanced type of civilization for it to come into agreement.
Yes, most people are not taught monetary history, because rentiers in finance want to keep you dumbed down and ignorant.
A talley stick can become money, or general demand, if the king issues it, as what happened in England. Their talley stick cum money project lasted for 600 years. Talley sticks fluxed back to the King upon payment of taxes. This would be a law money system that lasted longer than the U.S. has been in existence.
Isn't it interesting that bank of england take over by private finance in 1694 was a REGRESSION in monetary science, where private rentiers then took over money power and started controlling England after this point. Rothschild was soon part of this mix.
So, it is not a continuum of progression in legal knowledge. It is forward then reverse as people unlearn, or become confused. This confusion is usually brought on by propaganda.
Stop discussing the fed; its all rigged no use to apply logic to them for 10 years in a row
There are two types of economic activity, one that correctly anticipates consumer demand and is successful, and one that fails to do so.
Economic activity is trade. It only comes in one type, that being the here and now. It has nothing to do with anticipation. That's called forecasting and varies all over the map.
the disruption unsound money causes in the economy.
Is it commonly known what "sound money" is? Is everyone in agreement? This whole essay is based on the concept of so-called sound money ... yet never defines it. Shouldn't it define it just so there's no confusion? Shouldn't the meaning of sound money be agreed upon before proceeding since so much supposedly depends on it? For starters, how is sound money created? How is it destroyed? How does it guarantee perpetual balance between supply and demand for the money itself? How does it guarantee zero inflation of the MOE itself?
No point discussing the remainder of this essay until you Mises Monks step up to the plate and define what you're talking about. Tell us all how it works? And mysteriously the word "fiat" doesn't appear in this essay. Want to take a shot at that too?
How does it guarantee perpetual balance between supply and demand for the money itself?
You use big words, boy
And demand definitions where you yourself can't give yours in a clear, concise manner.
But completely miss the point that a system of rules can only set outer limits (and punishments for crossing those!), but never give guarantees - except you want to go pure totalitarian.
Malek: Again, you advance the subject not one bit. What "big" words are you referring to? I've given definitions in clear concise language to you specifically Malek. Now I'm asking for yours.
So I've missed the point that a "system of rules only sets outer limits" but doesn't "guarantee". Now that you have asserted that point, how does it apply?
Let's make it as simple as possible for you Malek: Should money exhibit perfect perpetual balance between supply and demand for it? If not, what are the consequences of it not exhibiting that attribute?
Regarding "going pure totalitarian", nothing I have ever written or described suggests anyone being forced to adopt it. I presume that's what totalitarian means to you. So what causes you to mention it?
Malek: Another example proving you are an avoider.
You gave nothing.
You answered to none of my pointed out flaws in your made-up theories.
(And if you don't even know what totalitarian means or believe it is subject to interpretation, better stop writing.)
I refer the interested reader to an earlier "discussion" http://www.zerohedge.com/news/2015-12-19/how-dollar-gets-replaced#comment-6944253
Another star for Malek the avoid-er. And another reading assignment from a Mises Monk regurgitating dogma without the ability to understand it and explain it and defend it.
Thus, they just declare themselves the winner of the debate and hand out reading assignments. These readings are created by the priests of Misesdom who will never engage in a call to debate. Rather, they just dump a bibliography and kick it further up the chain.
Unfortunately, at the top of the chain, Mises (whose total focus on prices and why people trade) and his disciples totally miss the point of the purpose of money ... that being to enable simple barter exchange over time and space. Plus, they are conveniently dead ... so their word is gospel.
They totally miss the point that only traders are interested in prices. It is not the concern of money at all. What traders want is zero inflation of the money (Media of Exchange) itself. And the Mises Monks, the Mises disciples, and Mises, Hayek, Rothbard and the others never address that need. They only obfuscate it. Yet they insist that some commodity must exist before traders can make promises spanning time and space.
If the Mises Monks take control after the reset, it's out of the frying pan into a hotter fire for the rest of us. If you think they're starting to prevail (and they are very well funded), buy gold as they advise because their activities will make it worth much more than its cost of production.
Malek: I'm glad you included that link. It fairly recalls the play-by-play ... my contributions ... and yours. I doubt we have any interested readers. I suspect we do have lookers-on from the Mises peanut gallery ... but of what value and import is that?
fed policy will always succeed in a closed system. the problema arises when people who aren't being served by that policy go outside the policy, the shadow or underground economy. the fed basically threw SB under the bus in 2008, which is great for wall street. if you are a listed company on the NYSE you have less competition to worry about. the question for voters is would donald trump do it any differently. hillary already made some noise about it, but thats just noise. somebody will step and say restore competition that would be the clue. the fed created this rate hike policy of theirs (which is not data dependent, they made that clear) in order to stay out of the political crosshairs but sooner or later some candidate is going to zero in on them, they are the architects of the fuck SB policies, enrich wall street companies. they want to see if they are still going to be the sugar daddy of the buyback M&A policy or they have to change policies in order to keep their heads. pretty simple really, theyre just bureaucratic stooges. do we elect another one and does everyone live happily ever after? if not we have policy failure, but no problem they have new policies to offer, in a democracy the squeky wheel gets their wallets greased. SB has its turn coming.
All you Fed haters still don't get the fact that the Fed is unaudited and can create electronic money out of thin air. That's powerful enough to take over the entire free market. What's to stop them?
Did you all see this:
"Switzerland will hold a referendum to decide whether to ban commercial banks from creating money.
The Swiss federal government confirmed on Thursday that it would hold the plebiscite, after more than 110,000 people signed a petition calling for the central bank to be given sole power to create money in the financial system."
http://www.telegraph.co.uk/finance/economics/11999966/Switzerland-to-vot...
Professor Steve Keen from Australia on The Keiser Report.A modern debt jubilee?If I got a free cheque from the government,I'd buy gold.
https://www.rt.com/shows/keiser-report/326948-episode-max-keiser-853/
"Furthermore, it's not just the American people who are affected by the Fed's monetary management, because the Fed's actions affect nearly everyone on the planet. The Fed does not even admit to having this wider responsibility, except to the extent that it might have an impact on the US economy."
And this is precisely the global dynamic that is in the process of being dismantled, one Eastern trading bloc nation at a time, via U.S. foreign policy actions, alternative trade agreements and soon-to-be, by way of the most hated and ridiculed of all, Gold.
"Why The Fed Has Already Succeeded":
Over 100 million Americans don't work, yet the system remains propped up.
Rent and cost of living continues to increase as wages stagnate, a process that continues until everyone lives in a box and the banks own all private property.
Most Americans more concerned with Obama's latest vacation than their future being sold out.
The Fed will never succeed in its attempt to manage inflation and unemployment by varying interest rates.
LOL Silly Wabbit - The Fed's job is to destroy the United States and loot the people of everything they have - it's not there as some kind of benevolent organization - it's a fucking parasite, and always has been.
The Fed with its stranglehold on the world reserve currency since 1944 has always put the self-interests of its owners ahead of the needs of the world – and peace. As a result, the political universe now is rapidly paralleling the USSR under the leadership of Lenin and Stalin in the 1920s. The reason for the USSR's crisis of late 1927 was “pricing policy errors and a disproportionate investment in industry” in a then primarily agrarian economy, caused by a socialist ruling system. “It undermined peasant incentive to sell to the state and disrupted the overall economic balance.”
Now, once again universal political and economic conflict is roiling the globe – economic collapse of the system is inevitable - and blame can be laid again at the feet of Bolshevism, at the feet of the revolutionary Fed.
But now, as Maccleod points out, there are “new kids on the block” who will fight back. Ironically, one of those kids is Russia.
Bernie Sanders asks:
"What went wrong at the Fed? The chief executives of some of the largest banks in America are allowed to serve on its boards. During the Wall Street crisis of 2007, Jamie Dimon, the chief executive and chairman of JPMorgan Chase, served on the New York Fed’s board of directors while his bank received more than $390 billion in financial assistance from the Fed. Next year, four of the 12 presidents at the regional Federal Reserve Banks will be former executives from one firm: Goldman Sachs.
“These are clear conflicts of interest, the kind that would not be allowed at other agencies…”
And answers:
“First, we should prohibit commercial banks from gambling with the bank deposits of the American people. Second, the Fed must stop providing incentives for banks to keep money out of the economy. Since 2008, the Fed has been paying financial institutions interest on excess reserves parked at the central bank — reserves that have grown to an unprecedented $2.4 trillion. That is insane. Instead of paying banks interest on these reserves, the Fed should charge them a fee that would be used to provide direct loans to small businesses.
“These are clear conflicts of interest, the kind that would not be allowed at other agencies.
“Third, as a condition of receiving financial assistance from the Fed, large banks must commit to increasing lending to creditworthy small businesses and consumers, reducing credit card interest rates and fees, and providing help to underwater and struggling homeowners….”
Abolish the Fed; it is an instrument of war and tyranny.
http://www.nytimes.com/2015/12/23/opinion/bernie-sanders-to-rein-in-wall-street-fix-the-fed.html?_r=1
Can you please find a less microaggressive photo of Mr. Yellen for these articles? I'm tired of having to constantly run and hide in my safe space.
A central bank is nothing more than a money funnel at our expense for government. One of the first things CONgress changed was to allow the FED to purchase government paper. You see, like everything, they lie like hell to pass law then once "passed" they change it to suit them. Today the FED purchases most of the government "debt" which is exactly what a central bank is designed to do. This was warned by economists before the FED was made law and they were correct. They have slowly inflated the value of the money away.
Then we have those that preach the FED is a private business. BONG! Wrong,,, When a law is enacted to create something, whatever it is,,, it's NOT private. If there was no central bank to feed the monster and the monster was required to rely on taxes all these wars and military spending and most welfare (free money or services,,, not SS) would stop. The budget they show us is for the public consumption only and only covers about 1/3 at most the actual spending. The monster is getting fat by destroying your currency.
The really sad part,,, most don't care and the rest use it to make their money from the misery of others. In our case, the production freely given to poor foreign nations to pad corporate profits and to buy governments that allow these traitorous companies to re-import tax free. Again Americans participate by purchasing these goods which today they have little choice since almost everything is foreign made. American companies still producing in the USA market share is limited by corporations like WalMart, K Mart and Sears. They are mostly online sales.
To think a central bank is designed to create jobs and regulate the economy is comical at best and disastrous at worse.
Millennials and X'ers trolling this site will argue the Welfare vs SS. IMO welfare is free money / services based on income, race, sex, religion or some other victim group. Social Security's problem is mainly the off shoring of production and the good jobs it provided and the actual theft of the funds by government for use in wars and the aforementioned welfare. Adding to the problem is the constant addition of beneficiaries to individuals the law never intended to participate.
Social Security is also welfare. The only difference is that Social Security is welfare without a means test. People who want to pretend there is a difference need to stop trolling everyone else, admit they are on the dole, and just take the money.
Because perpetual, premeditated fraud/theft is not a viable business model.
The Fed has succeeded in making its owners richer year after year since it was created. Those owners have siphoned off a piece of capital's and of labor's flesh since that Congressional vote during Christmas of 1913. The Federal Reserve doesn't give a shit about any results other than how much they put in the owners' pockets.
An agency that creates usury was never about helping the public.
"Interest rates" should be abolished. The "government" should be 1% its current size. People should go back to minding their own businesses instead of everyone else's.
The United States Federal Reserve System has one mandate: enriching the Wall Street, Banking, Crony Capitalist and obscenely rich Oligarch criminals by stealing from Main Street America. The Federal Reserve could not care less about 'saving' Main Street America.