The Next Fed Chair All But Promised NIRP is Coming to the US

Phoenix Capital Research's picture

The Fed Vice-Chair has begun laying the groundwork for NIRP.

 

The US Federal Reserve is obsessed with market reactions to its policies. Because of this, anytime the Fed plans to announce a major change in policy, it preps the markets via numerous leaks and hints… oftentimes for months in advance.

 

An excellent example of this concerns the Fed’s decision to taper QE back in 2013.

At that time, the Fed had been engaging in two open ended-QE programs… programs that had been running for over six months.

 

Rather than simply beginning to taper the programs, then-Fed Chairman Ben Bernanke, hinted that the Fed was contemplating a taper in June.

 

The markets reacted sharply with bond yields rising.

 

The Fed then spent six months allowing the market to get used to the idea of a taper, before the actual taper finally began in December 2013.

 

Put another way, the Fed gave the markets a full six months to adjust to a change in policy, before actually implementing said change. This only highlights just how focused the Fed is on market reactions to its policies.

 

In the simplest of terms: the Fed will NEVER surprise the market. This is particularly true now that the Fed is in the political cross hairs due to ample evidence showing its policies have increased wealth inequality.

 

If the Fed is planning on something new, particularly something that might have political repercussions, we’ll see numerous hints and suggestions well before the actual policy is unveiled.

 

With that in mind, we need to consider that the Fed is now actively engaged in a campaign to prep the markets for Negative Interest Rate Policy or NIRP.

 

1.     First we find that a Fed official hinted at NIRP during the Fed’s September 2015 meeting.

 

2.     Then, in early October 2015, NY Fed President Bill Dudley stating that negative rates were “an option” though not a “relevant conversation” right now.

 

3.     This statement was followed up by former Minneapolis Fed President Narayana Kocherlakota stating point blank that the Fed should “consider negative rates.”

 

Kocherlakota is a former Fed President and so is more aggressive with his campaign.

 Fast forward to yesterday and…

 

4.     Now Fed Vice-Chair Stanley Fischer stated in a Bloomberg interview that NIRP is working “more than I expected.”

 

Carefully note the word choice here. Fischer didn’t say he was “surprised” to see NIRP working; his phrasing implies that he “expected” NIRP to work. The surprise element is just how well it’s working.

 

It is one thing for Fed uber-doves or former Fed President to promote an extremely aggressive scheme; it’s entirely something else for the Fed VICE-CHAIR to do so.

 

Fischer is the current Vice-Chair for the Fed (formerly this position was held by Janet Yellen). As such, he is the most likely candidate for future Fed Chair when Yellen’s term ends in February 2018.

 

Previously, the Fed had never once hinted at or discussed NIRP during its policy meetings. Then, in the span of three weeks, an anonymous Fed official state that he or she believes NIRP is coming to the US, followed by two highly visible Presidents suggesting NIRP for consideration, and now the current Fed Vice Chair (and most likely candidate for future Fed Chair) has stated that NIRP is “working more than I expected.”

 

NIRP WILL BE COMING TO THE US.

 

This is simply part of the Fed’s larger War on Cash.

 

For six years straight, the Fed has been trying to “trash” cash.

 

First it cut interest rates to zero… making it so that savings deposits produced almost nothing in the way of interest income. Consider that at current rates, a retiree with $1 million in savings earns a measly $2,500 per year in interest income.

 

The Fed’s hope was that by making it painful for savers to sit in cash, said savers would move into risk assets such as bonds and stocks. This has worked in that stocks are now in one of, if not THE biggest bubbles in history… while bonds are trading at yields never before seen outside of wartime.

 

However, the Fed overlooked two outlets for investors who didn’t want to be forced into risk. They are: Gold bullion and physical cash.

 

The Fed has been dealing with bullion via clear manipulation of prices for years (that’s an article for another time). And now it is moving to make physical cash obsolete.

 

This is just the beginning. Indeed… we've uncovered a secret document outlining how the US Federal Reserve plans to incinerate savings in the coming months through NIRP, and possibly even by outlawing physical cash.

 

We detail this paper and outline three investment strategies you can implement

right now to protect your capital from the Fed's sinister plan in our Special Report

Survive the Fed's War on Cash.

 

We are making 1,000 copies available for FREE the general public.

 

To pick up yours, swing by….

http://www.phoenixcapitalmarketing.com/cash.html

 

Best Regards

 

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

 Our FREE daily e-letter: http://gainspainscapital.com/

 

 

 

 

 

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FIAT CON's picture

The outcome, after all of this shit from the bankers and.gov will be a complete collapse of the banks and .gov. This will be the reset! A return to sound money and barter will be the fix. Sound money will be anything of value, food,tools, lead, gold & Silver, booze, cig's and whatever else of value.

 

Governments are dinosaurs. They are too big for their tiny brain to coordinate. Their skulls are extremely thick. They crush whatever they step on. They have insatiable appetites. Everything they eat turns to shit. Their food supply is running out. If there is a revolution, they are a likely candidate for extinction.

 I have a lot of faith in the above defination of .gov. They just do not know when to stop the idiocy.

 Look at the EZ  those politicians days are numbered if not their lives. Tick Tock.

No One Special's picture

I'm amazed people still entrust banks with their money in light of all that has been revealed since 2008. How many scandals will break this year? Odds on chance of at least one methinks! I think they would love society to go cashless, think of the money that would be saved. No more Banks in the street, a helluva lot less staff to employ, and no more spending money on manufacturing physical cash. It's a Banksta's wet dream!

RabbitOne's picture

I talked about this with a friend in Banking. He said they are really concerned about NIRP because the U.S. Banks have many more products tied to interest rates than banks in other nations. For example he said imagine all the Certificates of Deposit (CD) that are still being used in banks and credit unions. NIRP would roll over an enormous amount of cash from these low paying CD’s. This alone could put a huge dent in future lending. This is the reason NIRP has not hit our shores because  banks and credit unions have to phase out these products…

 

wareco's picture

Hmm, I wonder if NIRP will apply to credit card companies too?  Yeah baby!  Pay me to using that fucking card!

flyonmywall's picture

Pretty sure that getting rid of cash would be quite problematic in the US. People like greenbacks, it's part of history. Unlike gold, which most people do not understand, people understand green money. Getting rid of it, or making it illegal would wake up even the average sheep. They would know something really funky is going on.

25% of people in the US don't even have bank accounts. Old article, but pretty sobering. 25% of people don't have bank accounts because they didn't think they had enough money to need one !!!

http://economix.blogs.nytimes.com/2009/12/04/unbanked-america/?_r=0

 

UncleChopChop's picture

Can we start a movement that even the layperson will understand? like 'SAY NOPE TO NIRP'? i mean, on the one hand, the fact that the train is careening off the tracks is bad, but on the other hand, the fact that even a layperson can see that NIRP is the stupidest most asinine thing ever, and is illustrative of just how warped and failed monetary policy is, that maybe there's hope people will rise up?

ToSoft4Truth's picture

I'm thinking the next Fed chair will be a hot piece of ass. 

cwsuisse's picture

One of the problems with ZIRP and NIRP is the one time effect. Once the savings have been eliminated there is nothing more to gain. We are seeing this in Germany where people momentarily loot their accounts to buy and refurbish condos. This is nice for the economy and treasury (because of the VAT and elevated property transaction taxes) but it is absolutely not sustainable and as soon as the poor consumers retire they shall need transfer payments since there property will be worthless and their pension schemes will have collapsed thanks to the zero-yield environment brought about by ZIRP and NIRP. What a nonsense!

Kefeer's picture

That is the plan; rape, pillage and plunder, then walk away with the loot and leave the people to die - Agenda 21 and Revelation of Jesus Christ.

Rhal's picture

Don't you mean revelation of John?  Yeshua was a lot more optomistic than that. 

It is shaping up to be as revelations described, but keep in mind some truthers ( like Lindsay Williams) have said that the elite will deliberatly emulate revelations just so Christians allow this to be. 

We still have free will. 

Raoul_Luke's picture

ZIRP is working?  Where?

truthalwayswinsout's picture

Get your money out of the banks and under your mattress now.  Get while the getting is good.

SweetDoug's picture

'
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'
'
the Fed will NEVER surprise the market.
---------------------------------------------------------------------------------------------------------

This adage is true, unless!…

They are about to actually make the change, and then they make an absolute denial, in the loudest possible way.

BOJ's Kuroda says no plan to adopt negative rates now
http://www.reuters.com/article/us-japan-economy-boj-idUSKCN0UZ0AN

See the game of Fizzbin, for a great analogy, played on Beta Antares IV.

https://www.youtube.com/watch?v=_DeIExLcURQ

•?•
V-V

silentboom's picture

They suprised the shit out of me when they raised rates at all.

GreatUncle's picture

Can't be bothered with the issue because even when cash is banned they will still not be able to make the economy add up hence why we have all the derivatives, CD's and other worthless bits of paper.

So skip to the  chase, after cash is banned at some future point there will be a revolution chances are it will be global where all elites as has happened previousoly are wiped out.

It always generates the same outcome every time as history repeats itself once more. As for using the military etc. to preserve such a system the military then become recognised as paid mercs is all.

Dental Floss Tycoon's picture

The elites will not be wiped out.  There are few times in history when that has happened.  They will simply hire or otherwise convince half of us to kill the other half, then rinse and repeat.  It is called war.

 

PoasterToaster's picture
PoasterToaster (not verified) Dental Floss Tycoon Feb 2, 2016 2:25 PM

Sometimes things move forward.  We are living post scarcity; the elites and their system of slavery is obsolete.

tictawk's picture

Cash is LEGAL TENDER for all debt PUBLIC AND PRIVATE in this nation.  Forcing people to go through banks is illegal given that every deposit to a bank is an UNSECURED LOAN.

How does the Fed intend to get around that fact?  Also consider that the dollar is the defacto default currency in much of the third world.  If the Fed attempts to ban cash, all those trillions will come home to roost causing an infation spike in goods and services and a sharply higher interest rates as bonds collapse. Reserve currency status will not matter much.

silverer's picture

"How does the Fed intend to get around that fact?"  I would guess with the military, if it becomes necessary. Then, they will declare after a certain date that cash can't be spent anymore, and won't be accepted.  You have to turn it in and get your digital card.  Then they will fiddle with the books as necessary, as they've always done.

Dental Floss Tycoon's picture

Laws mean nothing to the law givers.  They either ignore them or change them.

 

 

Bastiat's picture

They seem to have no problem with calling the FRN a "dollar."

Vlad the Inhaler's picture

Dumbass, you think you can beat these guys at their game?  They'll make cash and barter illegal, and supress gold price.  And when they can no longer suppress, they'll confiscate.  

FIAT CON's picture

Good luck making barter illegal! Just like drugs! Ha you are very funny.

Governments are dinosaurs. They are too big for their tiny brain to coordinate. Their skulls are extremely thick. They crush whatever they step on. They have insatiable appetites. Everything they eat turns to shit. Their food supply is running out. If there is a revolution, they are a likely candidate for extinction.

Lord Koos's picture

I seriously doubt that US citizens will stand for a ban on cash.  And there are a lot of downsides and unintended consequences to eliminating cash.

Vlad the Inhaler's picture

The ban on cash will be sold to the public as really cool technological progress, why mess with cash when you can pay using your iPhone, it's so cool and futuristic and cash is so primitive.   Besides, why would you need cash unless you are some sort of drug dealer, are you trying to hide something?

One-Eyed-Thong's picture
One-Eyed-Thong (not verified) Vlad the Inhaler Feb 2, 2016 6:37 PM

"will work for 10010110000101001110010011001110011"

silentboom's picture

Yes, how will we attach the swipe cards to strippers bodies?

cheech_wizard's picture

You had to go there, didn't you?

Standard Disclaimer: I see a great need.

cheech_wizard's picture

Yes, they can be beat. 

Standard Disclaimer: Beaten on the street with truncheons.

silverer's picture

Hello Fed.  If you want to officially devalue the worth of people's labor, and depreciate the representative savings of that labor into the future, then you should expect less production for every chicken shit dollar you hand somebody.  And therefore, down we spiral...

JamaicaJim's picture

NIRPLES ARE PURPLES