The Federal Reserve Is A Saboteur - And The "Experts" Are Oblivious

Authored by Brandon Smith via,

I have written on the subject of the Federal Reserve's deliberate sabotage of the U.S. economy many times in the past. In fact, I even once referred to the Fed as an "economic suicide bomber." I still believe the label fits perfectly, and the Fed's recent actions I think directly confirm my accusations.

Back in 2015, when I predicted that the central bankers would shift gears dramatically into a program of consistent interest rate hikes and that they would begin cutting off stimulus to the U.S. financial sector and more specifically stock markets, almost no one wanted to hear it. The crowd-think at that time was that the Fed would inevitably move to negative interest rates, and that raising rates was simply "impossible."

Many analysts, even in the liberty movement, quickly adopted this theory without question. Why? Because of a core assumption that is simply false; the assumption that the Federal Reserve's goal is to maintain the U.S. economy at all costs or at least maintain the illusion that the economy is stable. They assume that the U.S. economy is indispensable to the globalists and that the U.S. dollar is an unassailable tool in their arsenal. Therefore, the Fed would never deliberately undermine the American fiscal structure because without it "they lose their golden goose."

This is, of course, foolish nonsense.

Since its initial inception from 1913-1916, the Federal Reserve has been responsible for the loss of 98% of the dollar's buying power. Idiot analysts in the mainstream argue that this statistic is not as bad as it seems because "people have been collecting interest" on their cash while the dollar's value has been dropping, and this somehow negates or outweighs any losses in purchasing power. These guys are so dumb they don't even realize the underlying black hole in their own argument.

IF someone put their savings into an account or into treasury bonds and earned interest from the moment the Fed began quickly undermining dollar value way back in 1959, then yes, they MIGHT have offset the loss by collecting interest. However, this argument, insanely, forgets to take into account the many millions of people who were born long after the Fed began its devaluation program. What about the "savers" born in 1980, or 1990? They didn't have the opportunity to collect interest to offset the losses already created by the Fed. They were born into an economy where saving is inherently more difficult because a person must work much harder to save the same amount of capital that their parents saved, not to mention purchase the same items their parents enjoyed, such as a home or a car.

Over the decades, the Fed has made it nearly impossible for households with one wage earner to support a family. Today, men and women who should be in the prime of their careers and starting families are for the first time in 130 years more likely to be living at home with their parents than any other living arrangement.

People are more likely to be living with their parents now than back during time periods in which young people actually wanted to stay close to their parents to take care of them. That is to say, most young people are stuck at home because they can't afford to do anything else, not because they necessarily want to be there.

This is almost entirely a symptom of central bank devaluation of the currency and its purchasing potential. The degradation of the American wage earner since the Fed fiat machine began killing the greenback is clear as day.

The Fed is also responsible for almost every single major economic downturn since it was established. As I have noted in the past, Ben Bernanke openly admitted that the Fed was the root cause of the prolonged economic carnage during the Great Depression on Nov. 8, 2002, in a speech given at "A Conference to Honor Milton Friedman ... On the Occasion of His 90th Birthday:"

"In short, according to Friedman and Schwartz, because of institutional changes and misguided doctrines, the banking panics of the Great Contraction were much more severe and widespread than would have normally occurred during a downturn.


Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."

Bernanke is referring in part to the Fed's program of raising interest rates into an economic downturn, exacerbating the situation in the early 1930's and making the system highly unstable. He lies and says the Fed "won't do it again;" they are doing it RIGHT NOW.

The Fed was the core instigator behind the credit and derivatives bubble that led to the crash in 2008, a crash that has caused depression-like conditions in America that we are still to this day dealing with. Through artificially low interest rates and in partnership with sectors of government, poor lending standards were highly incentivised and a massive debt trap was created. Former Fed chairman Alan Greenspan publicly admitted in an interview that the central bank KNEW an irrational bubble had formed, but claims they assumed the negative factors would "wash out."

Yet again, a Fed chairman admits that they either knew about or caused a major financial crisis. So we are left two possible conclusions — they were too stupid to speak up and intervene, or, they wanted these disasters to occur.

Today, we are faced with two more brewing bubble catastrophes engineered by the Fed: The stock market bubble and the dollar/treasury bond bubble.

The stock market bubble is rather obvious and openly admitted at this point. As the former head of the Federal Reserve Dallas branch, Richard Fisher, admitted in an interview with CNBC, the U.S. central bank in particular has made its business the manipulation of the stock market to the upside since 2009:

"What the Fed did — and I was part of that group — is we front-loaded a tremendous market rally, starting in 2009.


It's sort of what I call the "reverse Whimpy factor" — give me two hamburgers today for one tomorrow."

Fisher went on to hint at his very reserved view of the impending danger:

"I was warning my colleagues, Don't go wobbly if we have a 10 to 20 percent correction at some point... Everybody you talk to... has been warning that these markets are heavily priced." [In reference to interest rate hikes]

The Fed "front-loaded" the incredible bull market rally through various methods, but one of the key tools was the use of near-zero interest rate overnight loans from the central bank, which corporations around the world have been exploiting since the 2008 crash to fund stock buybacks and pump up the value of stock markets. As noted by Edward Swanson, author of a study from Texas A&M on stock buybacks used to offset poor fundamentals:

"We can't say for sure what would have happened without the repurchase, but it really looks like the stock would have kept going down because of the decline in fundamentals... these repurchases seem to hold up the stock price."

In the initial TARP audit, an audit that was limited and never again duplicated, it was revealed that corporations had absorbed trillions in overnight loans from the Fed. It was at this time that stock buybacks became the go-to method to artificially prop up equities values.

The problem is, just like they did at the start of the Great Depression, the central bank is once again raising interest rates into a declining economy. This means that all those no-cost loans used by corporations to buy back their own stocks are now going to have a price tag attached. An interest rate of 1% might not seem like much to someone who borrows $1000, but what about for someone who borrows $1 Trillion? Yes, borrowing at ANY interest rate becomes impossible when you need that much capital to prop up your stock. The loans have to be free, otherwise, there will be no loans.

Thus, we have to ask ourselves another question; is the Fed really ignorant enough to NOT know that raising rates will kill stock markets? They openly admit that they knew what they were doing when they inflated stock markets, so it seems to me that they would know how to deflate stock markets. Therefore, if they deliberately engineered the market rally with low interest rates, it follows that they are deliberately engineering a crash in markets using higher interest rates.

Mainstream economists and investment "experts" appear rather bewildered by the Federal Reserve's exuberance on rate hikes.  Many assumed that Janet Yellen would hint at a pullback from the hike schedule due to the considerable level of negative data on our fiscal structure released over the past six months.  Yellen has done the opposite.  In fact, Fed officials are now stating that equities and other assets appear to be "overvalued" and that markets have become complacent.  This is a major reversal from the central bank's attitude just two years ago.  The fundamental data has always been negative ever since the credit crisis began.  So what has really changed?

Well, Donald Trump, the sacrificial scapegoat, is now in the White House, and, central bank stimulus has a shelf life.  They can't prop up equities for much longer even if they wanted to.  The fundamentals will always catch up with the fiat illusion.  No nation in history has ever been able to print its way to prosperity or even recovery.  The time is now for the Fed to pull the plug and lay blame in the lap of their mortal enemy - conservatives and sovereignty champions.  They will ignore all financial reality and continue to hike.  This is a guarantee.

In the Liberty Movement the major misconception is that the Fed is attempting to "catch up" to the next crash by raising interest rates so that they will be ready to stimulate again.  There is no catching up to this situation.  The Fed has no interest in saving stock markets or the economy.  Again, the fed has raised rates before into fiscal decline (during the Great Depression), and the result was a prolonged crisis.  They know exactly what they are doing.

What does the Fed gain from this sabotage? Total centralization. For example, before the Great Depression there used to be thousands of smaller private and localized banks in America. After the Great Depression most of those banks were either destroyed or absorbed by elite banking conglomerates. Banking in the U.S. immediately became a fully centralized monopoly by the majors. In a decade, they were able to remove all local competition and redundancy, making communities utterly beholden to their credit system.

The 2008 crash allowed the banking elites to introduce vast stimulus measures requiring unaccountable fiat money creation. Rather than saving America from crisis, they have expanded the crisis to the point that it will soon threaten the world reserve status of our currency. The Fed in particular has set the U.S. up not just for a financial depression, but for a full spectrum calamity which will include a considerable devaluation (yet again) of our currency's value and resulting in extreme price inflation in necessities.

The next phase of this collapse will include the end of the dollar as we know it, making way for a new global currency system that uses the IMF's SDR basket as a foundation. This plan is openly admitted in the elitist run magazine 'The Economist' in an article entitled "Get Ready For A Global Currency By 2018."

It is important to understand what the Fed actually is - the Fed is a weapon. It is a weapon used by globalists to destroy the American system at a given point in time in order to clear the way for a new single world economy controlled by a single managerial entity (most likely the IMF or BIS). This is the Fed's purpose. The central bank is not here to save the U.S. from harm, it is here to make sure the U.S. falls in a particular manner — a controlled demolition of our fiscal structure.


LetThemEatRand Nobodys Home Thu, 06/29/2017 - 00:19 Permalink

So long as people are fixated on hearings about hearings, investigations of the President followed by investigations of the investigator investigating the President, Russia, the Kardashians, North Korea, Syria, Iran, Afghanistan, Paris bombings, London bombings, Orlando shootings, DC shootings, and the Dyson yoga self-blow, the Fed can continue to destroy the American middle class with impunity.

In reply to by Nobodys Home

pizdowitz Thu, 06/29/2017 - 00:03 Permalink

I call BullShit.It is not in the interest of the US banking system, or the FED, or anybody on the tit, to get involuntarily suicided. Beware the agitators, provocateurs seeking to subvert this country.

nightwish Thu, 06/29/2017 - 00:09 Permalink

Isn't it obvious that these modern day pharisees and sadducees have taken upon themselves to control every aspect of the world, including its economies? 

We Are The Priests Thu, 06/29/2017 - 00:28 Permalink

Yes, yes, yes.  This is all true, but you're still just scratching the surface as to what is really going on.  You really have to take a step back, and I mean way back, and start viewing these issues from a more cosmological point of view to understand the bigger picture and the bigger players involved.The Fed, and the so-called banking cabal behind the Fed are minor players, fulfilling a minor role--albeit, at a critical juncture in human history--that is designed to set up a critical Hegelian dialectic necessary to the purpose of manufactoring a global perspective that will lead the human race to willingly consent to a global system that has yet to be revealed.The NWO and the current globalist plans--i.e., global climate change and a carbon tax system are nothing more than a red herring and represent the real controlled opposition to the yet undisclosed "Beast System".  Even all the Christian scholars are getting this part wrong.  Alex Jones is getting it wrong.  Most of the Alt-Right is getting it wrong., and most of them will all fall prey to their own hubris and lack of Socratic understanding.

Implied Violins We Are The Priests Thu, 06/29/2017 - 01:14 Permalink

Yeah, I got ya.

I went there, because of bizarre shit that happened to me personally.

It might even be true.

But: so what?

Start with what you can know, and potentially control, in your own life and circumstances - such as: the FED, the IMF, the BIS, and the history of the reserve currency and the plans put forth into the mainstream by the bastards that run these organizations.

Plenty enough REAL, 3-D bastard bankers to get to first before even thinking about anything more...and a bonus: if there *isn't* anything else, then our work is done!!

But if there IS, then we've made a hell of a good start. And that's good enough for me.

In reply to by We Are The Priests

gregga777 Thu, 06/29/2017 - 00:47 Permalink

• the Goldman Sachs Feral Reserve System;
• Alan Greenspan;
• Benjamin Shalom Bernanke;
• Janet Yellen;

Just so that you will know whom to blame when the American financial system and economy are DELIBERATELY crashed again, for the THIRD time this century, morphing the Greater Depression into the Greatest Depression, and when, over the course of the next decade, all of America's public and private pension plans admit that they are bankrupt and they have to drastically slash retirees monthly payments.

NuYawkFrankie Thu, 06/29/2017 - 01:20 Permalink

re... Experts Are Oblivious

"If there's ONE thing I've learned about 'experts', it's that they're experts in FUCK ALL!"

- Jason Statham character in Guy Ritchie's "Revolver"

Yen Cross Thu, 06/29/2017 - 01:33 Permalink

 The federal reserve has become the victim of their own demise.   Who's going to fund the next " carry trade" cycle?  The euro is in trouble. The Petro $ is spent!!! Gold/Cryptos? I have my reservations about cashless transactions.  I still can't believe the Beta on comcast was 2.55[1.00] standard deviations higher than Silver Wheaton Group at a measly .4 Beta with EARNINGS!

jialins Thu, 06/29/2017 - 03:11 Permalink

Clueless gibberish... they are hiking FFR to attract capital and defend the US dollar and benefit the major banks and multinational (at a cost of everyone else). Period. That simple

Batman11 Thu, 06/29/2017 - 03:22 Permalink

This is a farce that historians will be talking about until the end of time.Today’s neoclassical economics was around in the 1920s and it led to the roaring 20s and the Great Depression.The roaring 20s, roared because of debt based consumption and debt based speculation. All the debt built up in the boom led to the debt deflation of the Great Depression.Neoclassical economics was revamped but it still has its old problems. and 2008 stick out like sore thumbs when you look in the right place.The build up in the ratio of debt to GDP signals the build up of unproductive lending into the economy leading to a Minsky Moment (1929 and 2008).The debt-to-GDP ratio is still higher than before the Great Depression.There is a long way to fall, the US needs to tread very carefully.Outside neoclassical economics.Irving Fisher produced the theory of debt deflation in the 1930s.Hyman Minsky carried on with his work and came up with the “Financial instability Hypothesis” in 1974.Steve Keen carried on with their work and spotted 2008 coming in 2005 (he was looking at the graph above).1929, Japan 1989 and 2008 are all about debt building up in the economy that leads to a Minsky Moment.The FED, IMF and OECD don't see it coming as they use today's economics.

Batman11 Batman11 Thu, 06/29/2017 - 03:23 Permalink

Bad economics gains acceptance through a pseudo “Nobel” prize.The economics prize is a bit different. It was created by Sweden’s Central Bank in 1969, nearly 75 years later. The award’s real name is the “Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.” It was not established by Nobel, but supposedly in memory of Nobel.”   The “Nobel” prizes helped to give the refurbished neoclassical economics credibility and allow it to push out the old Keynesian ideas (goodbye equality). 1997, Robert Merton and Myron Scholes, won the “Nobel” prize for their derivative risk models that minimised risk.They formed a company Long Term Capital Management using these ideas that blew up a year later posing a systemic risk to the global financial system.The pseudo “Nobel” economics prize isn’t up too much.Someone hid the way money and debt work.Monetary theory has been regressing since 1856, progress isn’t always in the forwards direction.“Progress in economics and finance research would require researchers to build on the correct insights derived by economists at least since the 19th century (such as Macleod, 1856). The overview of the literature on how banks function, in this paper and in Werner (2014b), has revealed that economics and finance as research disciplines have on this topic failed to progress in the 20th century. The movement from the accurate credit creation theory to the misleading, inconsistent and incorrect fractional reserve theory to today’s dominant, yet wholly implausible and blatantly wrong financial intermediation theory indicates that economists and finance researchers have not progressed, but instead regressed throughout the past century. That was already Schumpeter’s (1954) assessment, and things have since further moved away from the credit creation theory.”“A lost century in economics: Three theories of banking and the conclusive evidence” Richard A. Werner

In reply to by Batman11

DelusionsCrowded Thu, 06/29/2017 - 04:08 Permalink

The Fed and the Rest of the Masonic Govs' are deliberately sabotaging the Western Economic and political systems . Anyone who understand the deeper picture and has been following events for years can see this clearly . The MSM are directly implicated in pushing things in the wrong direction .Any politican who is not doing what they want gets pillored by the MSM on bogus pretexts , particularly politicans who are too friendly with China or Russia .See The Economist Mag Cover of year 1986 : The Rise of The Phoenix 2017 , it shows a picture of burning currancies with a Phoenix rising from the ashes .

kooka Thu, 06/29/2017 - 05:00 Permalink

I thought Mr Smith was one of the better contributors to ZH, but this piece is very disappointing. Why would those with their hands on the most lucrative machinery in the history of the world, strap on the semtex vest? They would say f*#@ you to their puppet masters. They know there are no 72 virgins.

GreatUncle Thu, 06/29/2017 - 05:27 Permalink

The banking mechanism debases the currency it is what it does so eventually in the end that currency becomes worthless, just the serfs / peons / sheeple will never recognise this believing all the bankster lies.In the end as the currency -> 0 eventually the bankers have to start a new system and normally this is through war.The mandrake mechanism was here long before Keynes formalised a mechanism to CTRL-P and destroy the population economically.These people who do this are the globalists, Trump cannot combat them because they will demand over and over until they get what they want.So unless Trump is prepared to kill all the globalists he loses. Or is he one of them?As for 2018, when it goes it is going to be devastating because to flip a new global reserve currency you have to mark-to-mark all values and that will cause a shitstorm of economic devastation. How much is that bit of paper worth?That last point is where the war comes in and we are at that point in the cycle, so the population amidst the carnage does not notice how it all vanishes and they once again put themselves in charge.Never before in history have the globalists and their methods been so revealed ... once the fighting starts you go after any and all appointed ones because that is the method they use to keep power through their instigated transistion of destruction. 

rstora01 Thu, 06/29/2017 - 06:26 Permalink

The Fed is an independent central bank they exist solely at the pleasure of the US Congress. Therefore the Fed, is nothing more than a money printing extension of the govt. I can say with confidence that there has never been and will never be a time when the govt. tells the Fed to print and they say "No".  Kill the goose that keeps laying golden eggs not a chance!

WonderDawg rstora01 Thu, 06/29/2017 - 08:15 Permalink

Uh, yeah, nice try but you have it pretty much backwards. The Fed (meaning, the owners of the Fed) owns congress, the senate, the judiciary, the regulatory agencies, and pretty much everyone else they need to own to control the government. The Fed might exist because of the law passed in 1913, but they own the guys that make the laws, so they're sitting in a pretty good spot. What was it the old Rothschild guy said? Allow me to control the currency of a nation and I care not who makes its laws. Something like that.

In reply to by rstora01

Mareka Thu, 06/29/2017 - 06:43 Permalink

If for no other reason, the FED is illegal in that it levies a tax on everyone without representation.Now out in the open with the stated "goal" for inflation.No recourse, no way to opt out or vote it out, not even the ability to audit the activites of this cartel of private banks.End The Fed.  

withglee Mareka Thu, 06/29/2017 - 10:05 Permalink

No recourse, no way to opt out or vote it out, not even the ability to audit the activites of this cartel of private banks. End The Fed.All we have to do is institute a "proper" MOE process in competition with the Fed. Such a process guarantees perpetual perfect balance of the supply and demand for money itself ... i.e. zero inflation.Against that competition, their scam no longer works.And all this nonsense with bitcoins is working against us because it is openly deflationary. It claims to be money (i.e. a coin), but at its deflation rate a trader would be a fool to spend one. He can hold on to it for just a short tie and it doubles in value (the next stupid person coming along will pay twice as many dollars for it than he did).Real money doesn't do that. Real money "never" changes value over all time and space.We need to eliminate the bitcoin distraction by exposing its open flaws for use as money. It does seem to be pretty effective for trading contraband however.

In reply to by Mareka

Last of the Mi… Thu, 06/29/2017 - 06:58 Permalink

If the Fed was interested in the economy, they would do research and work at the pocketbook level. One of the interesting things is that the more technology we gather, the more the bottom rung of the ladder is ignored. Technology, should, in fact make that place where the middle class used to live more accessible as to the financial problems they face. What you see, instead, is a massive gathering of information that is then "massaged" and released with an ultimate effect of increasing the wealth of the already wealthy and the disappearance of the middle class. It would take a newt to figure out the Fed was a massive part of the problem. With the money spent on QE, they should have been in each and every household in America two or three times attempting to understand the problems our civilization faces. Well, that is unless they know the problems and just don't give a shit.

JailBanksters Thu, 06/29/2017 - 08:56 Permalink

It's almost an Ultimate Weapon, because what they produce doesn't exist.How can you fight against a weapon that physically doesn't exist ?, well you just tell them your money is woth Scheisse.They can destroy counties all because people think what the Club Produces has Value. 

withglee JailBanksters Thu, 06/29/2017 - 10:10 Permalink

They can destroy counties all because people think what the Club Produces has Value.Please explain your reasoning here.Throughout my career, I have traded my hours for the Fed's dollars. My hours had value and I viewed the dollar as having value. I was able to use those dollars at the grocery store, to make house payments, to buy toys, to heat and cool my home, etc. In not one single case was my use of the Fed's money denied in simple barter exchange ... except when I asked Fidelity to deliver my balance in cash and they refused ... forcing me to accept their check, which was difficult to convert into dollars because I no longer used a bank.The Fed's dollar has an objective 2% leak (86% devaluation over 100 years). They have been delivering a 4% leak (98% devaluation over 100 years). Over the 30 years for the purchase of my house, their devaluation of 68% made my purchase easier than I planned. But that was mitigated by the money changers charging from 6% to over 10% compounded interest (i.e. demand for tribute).But over short periods, e.g. between weekly pay checks, the leak is imperceptible ... only .07%. It's like an accountant stealing the rounding error.The leak works to the advantage of the money changers and the governments they institute. It allows them to claim that money has time value and thus interest is compounded. It allows the governments they institute for their own preservation to counterfeit money to sustain themselves.It's a racket.We can institute a process with a 0% leak right now. We should do that. Expect resistance. It blows up the money changers and governments games.

In reply to by JailBanksters

withglee Thu, 06/29/2017 - 09:37 Permalink

Back in 2015, when I predicted that the central bankers would shift gears dramatically into a program of consistent interest rate hikes and that they would begin cutting off stimulus to the U.S. financial sector and more specifically stock markets, almost no one wanted to hear it. If the author knew what "real" money was, he wouldn't write nonsense like this.With a "proper" MOE (Medium of Exchange) process where only traders create money ... and responsible traders do so freely ... and where perfect perpetual supply/demand balance for that money is guaranteed ... thus zero inflation all the time, he would know what interest is.Interest is the mechanism such a process uses to reclaim defaults (i.e. traders failing to deliver as promised) immediately when detected by interest collections of like amount. There is no "program' involved at all. It's a perpetual zero sum game.With such a process, it is impossilbe to use money as a mechanism to manipulate (i.e. stimulate or retard) the economy. It has a responsive and natural negative feedback mechanism and is thus perpetually self correcting and stable. It has no knobs for the money changers and governments to turn.

Farqued Up Thu, 06/29/2017 - 11:51 Permalink

Imagine playing the board game, Monopoly, and being the banker. With enhanced bank rules, say you, the banker, can print all the fiat Monopoly money you want for your use only, then make all sorts of rules where the penalties are quadrupled for the other players, don't collect $200 passing GO, and can't buy Boardwalk without all sorts of alphabet agencies approving it. Since there is no money printer in most homes where the game is played, it is perfectly legal to bring another 100 games with their banks to your party. You have instant almost infinite amounts of money and the other players only pay, pay, pay. Eventually it will come down to you and one other remaining, it will take longer for him to go broke but with enough money he can be outlasted.With the Fed printing fiat and buying Boardwalk and Park Place one bite at a time, stocks on the markets, it doesn't take a genius to figure out their plan. Since the Russian serfs didn't own any of the shares, the oligarchs simply confiscated the state owned giant corporations. The Fed has to be more gracious, they "PURCHASE" the stock they are confiscating and make it seem fair and acceptable to us serfs. They are masters of secret deceit.