Fed Debt Cannibalism Going Into Overdrive Complex systems fail, especially when the primary factor is looting. Audit the FED now. The longer they run their bad experiment out, the more bizarre financial world is going to become. The markets are taking control of interest away from the Fed and, backing them into a corner. Central banks are selling subpar buying loans because banks won't buy from each other any longer. Does anyone want some beautiful juicy Deutsche Bank products? I've got some Bear Stern stuff too! Welcome to The Atlantis Report. The Federal Reserve is a private institution and lends currency into existence. The interest paid on Treasury debt is in effect future taxes. Since already accrued interest owed is so high the pressure is to keep the Fed set interest rates low so that the government can pretend to be solvent. Now when this is not sufficient for the demand to expand the money supply even faster, they have to avoid this apparent hyperinflationary spiral, and that's why the idea is being floated to allow the Fed to buy Treasuries directly. It's debt cannibalism going into overdrive and obviously, one of the last can-kicking actions available before full out Modern Monetary Theory to the population. The Federal Reserve is a privately owned secret entity. And we have absolutely no clue as to what they are doing, in secret, to keep the treasury prices so low in order to entice us to keep borrowing. The trap has been set, in secret. Just like the trap of easy money that was set that led to the 2008 financial crises. And they secretly manipulate the stock markets in the same way. If they had nothing to hide, we would be auditing these secret books of theirs. But secrets are meant to keep the truth from us, which leaves us absolutely clueless. So we can only continue guessing what they are actually doing, in secret, to manipulate all that is financial with their secret control of our financial system. If I was a counterfeiter, printing money at will and buying anything I wanted, and to use this counterfeit money to hire hit men, or manipulate stocks, or to give to my buddies, would I want anyone to know what I am doing? Hell, no. And the Federal Reserve operates in this same manner. Most of us are very suspicious of the Federal Reserve and the manipulation of all that is financial, but since this is being done in secret, we will never know the truth. And for those who don't believe it, look at our military secrets and all the people that are sworn to secrecy. And the CIA, and how their members are sworn to secrecy. The Federal Reserve acts in the exact same manner. Keep the code of silence, and all evil is possible. The Fed has bought (with money that did not come from taxpayers but was created ex nihilo ) and HELD trillions of dollars in securities, including mostly treasuries. It STILL holds most of those treasuries. It has kept many of those as assets that it owns on its balance sheet for years and still has not sold many of them to taxpayers or anyone. It's member banks/dealer banks bought them originally from the treasury via the Fed, and then the Fed immediately bought them from the member banks and held them on its balance sheet. (To achieve something that is just the appearance of an arms-length transaction because the member banks bought them knowing full well the Fed had promised to buy from the banks them the next day with interest. Just easy free money from a risk-free carry for the banks.) There are so many things to worry about that the Fed remains in play – now they’re restarting QE while assuring us it’s anything but QE. The Fed certainly holds the collateral, for you (us), just waiting to be paid back, in sweat dollars that we have to work to earn. They hold the collateral all right, which the Government has issued in your name, the taxpayer. Did you not know that you work for the Fed as a debt slave? The new system will most likely be created by the same banking cartel unless we prevent it, and it will start again anew. It makes little difference if there is a debt jubilee or a deflationary or inflationary crash. If you control the system and can print money out of thin air, then "Meet the new boss, same as the old boss." I say, let's prevent it from happening again. QE4 is going to fail. Just as two rate cuts was unable to produce new highs. On the contrary, it made the markets drop. QE 1 to 3 and the rate cuts of a few years ago worked because people and companies were willing to borrow. It created demand in the real economy and, therefore, new jobs despite the fact that savers created reduced demand due to lower interest income. Demand due to borrowing outpaced declining demand due to lower interest income. To me, somewhere at the beginning of 2019, that balance flipped. Net demand is dropping, and I even think that the two rate cuts will produce an acceleration of that demand and, therefore, economic fundamentals. Borrowers won't borrow that much more, but savers will even save more. They need more to secure future income when they retire. The steadily dropping ISM index is the confirmation for me. Dropping demand also leads to companies earning less and therefore being less able to repay loans, so they are less likely to borrow to repurchase shares. I also think that this results in deteriorating loan quality that is used as collateral, hence the spike in the repo rate. So the FED can offer credit through QE4, but it can't create demand for it, and I think there is far less demand for it in the real economy. The FED is fighting a 70 trillion debt bubble deflating faster every day. They won the battle in 2011, but they won't win the war. It is the markets that will, and it won't be pretty. I am very, very interested in how far the earnings and the forward guidance backs up the ISM. What the Fed can't openly tell Americans, is that the dollar is long in the tooth and attempts to preserve its preeminence by force of arms, have failed. Onwards then, to "Plan Salvage" of the confidence of the American economy. The impetus is to prevent a repeat of '29. For the gambit to work however, requires the cooperation of the fiscal, trade, and regulatory components of the economic quadrant. America is materially wealthy, though fragile, the people, grossly maleducated, and highly dependent.. Were a' 29 to happen now, especially with the entitlement culture prevalent, it won't be pretty at all.. Mistakes have been made, no doubt, but only a reckless fellow will allow what many folks seem to be demanding thus.cold turkey. Before the dollar loses all semblance of value, salvage can still be attempted in a "Hail Mary" gambit, but it depends on the political class to smell the coffee aroma, and ditch imperialism in favor of national rejuvenation. In any event, if that's not done, then the Fed is absolved of detrimental outcomes and how so. Because the Fed has done all it can, plugging holes in the dam, if the others, the political and business class don't do their part of the heavy lifting, then whether QE or QT, outcome will be similar.. Massive dislocations. Caveat Emptor - we're not bankers, nor acquainted with central bankers, nor invested in markets or what have you. We're simply trying to prevent species suicide. But if you have a way out of the economic and policy cul de sac, please elaborate on it, we're sure the current Fed is humble enough to seriously consider it. Many individuals are at or near peak debt, so they cannot be enticed into taking on more. Some corporations, too. The government will take on more, but it is actually already past peak debt in that the entirety of its collected taxes is going just to servicing the interest on the debt. That means it is impossible to pay it down. The next generation will be using all of their tax capacity just to keep paying the interest their entire life and, therefore, will be getting NOTHING at all for their taxes because we already got it all and sent them the bill. The market is saturated with debt and will be less accepting if they start to figure out that it is now an endless vicious circle.As the overall capacity to remain ignorant about the problems involved here does seem to know no bounds. The Fed doesn't know what it is doing -- that its plans are a failure. Any growing awareness of that has to cause the same intends to give less lift. Investors foolishly believed the FED in 2011 when they said they were not going to monetize the debt, because blowing up the balance sheet was only temporary and when the economy was stabilized, they would withdraw the liquidity. However, now it becomes clear to bond investors that the FED will never withdraw it and therefore unleash inflation, the long end of the bond market will eventually go up to make up for the future purchasing power loss. I think that we start to see that already. The uninversion is currently 11 bp, let´s see whether the ten years will move over 2% quickly. When the length goes up, then the FED is totally back into a corner. 50 YEARS OF GLOBALISM CREATED A COUPLE OF HUNDRED BILLIONAIRES AND BANKRUPTED EVERYONE ELSE. 1913 THE YEAR CONTROL OF THE ECONOMY WAS GIVEN TO FOREIGN BANKS. 1963 KENNEDY HIT, THE YEAR THE MIDDLE CLASS WAS ASSASSINATED. $40 Trillion of pension funds invested by wall street in China. $23 Trillion of debt run-up. 30 million US jobs offshored to China including 6 million manufacturing jobs . One hundred million immigrated into the US in the past 50 years. 50 million illegals. 63% of all immigrants now on welfare, and the rate increases every year. Two million green cards and H1B visas per year to drive wages down. $40 trillion paid in welfare reparations with zero effect. The number of poor blacks doubled. Thank you, Bush and Obama, Greenspan and Bernanke, Paulson, and Geithner. They bailed out the Elites who caused the mess and left the middle class to rot. I wonder how much of the QE money went into the new stock market highs. Tell the Fed that you need $350 million for overnight repo, invest the $350 million the next day, ask for $500 million on QE pay back the $350 million set the bots to watch for a 10 cent drop on the price of the shares SELL the shares now $400 million (you are at the top) then BTFD after the suckers are selling at the low. Rinse and repeat.Sounds like money Laundering. They are allowed to do it. It is in fact money laundering. Just like budget deficits are checked fraud. The Fed/Central Bank goal since 2008 has been and remains "extend and pretend." Only a fool would believe that the Fed and their Central Bank peers are ignorant of the consequences of all their money printing and interest rate suppressing. Of course, they know what the end result will be. But they keep doing what they're doing because they are desperately trying to make it to some unknown-to-us point in time when they will be as ready as they can possibly be to step back and let it all come crashing down. Until then, there are geopolitical realignments to solidify, bunkers to be built and stockpiled with goods, martial law plans to be made and distributed to military and law enforcement agencies -- still lots of rearranging to do on the Global Titanic before that big iceberg does its thing, which is inevitable. I've just been looking into the oil price, and well, it's pretty clear that oil is going down and going down hard to the 20/25 dollar region. That's going to destroy the petrodollar system, and all the FED can do is print, monetize and pray that the game goes on for as long as possible. Trump's Depression is coming soon.
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ReplyDeleteSince, the Switch, the creation of money ALWAYS involves the extension of credit by private commercial banks. Source: US Treasury Letter to me.
ReplyDeleteAll new money must once again be created by our US Treasury and spent into circulation as a debt free, earned payment for production the citizens do that benefits everyone mutually. Be a Debt Freedom Friend. www.debtfreemoney.org
ReplyDeleteInstead of worrying about what 'they' are going to do to us debt slaves, why don't we just do what needs to be done to be Free. Pass legislation that will Transition us back to a debt free medium of exchange representing what we OWN not what we OWE? www.debtfreemoney.org
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