Tag Archives: Federal Reserve

The Fed’s Brilliant Plan: More Inflation, Higher Prices

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Federal Reserve Chairman Jerome Powell recently announced that the Fed is abandoning “inflation targeting” where the Fed aims to maintain a price inflation rate of up to two percent. Instead, the Fed will allow inflation to remain above two percent to balance out periods of lower inflation. Powell’s announcement is not a radical shift in policy. It is an acknowledgment that the Fed is unlikely to reverse course and stop increasing the money supply anytime soon.

Following the 2008 market meltdown, the Fed embarked on an unprecedented money-creation binge. The result was historically low interest rates and an explosion of debt. Today total household debt and business debt are each over 16 trillion dollars. Of course, the biggest debtor is the federal government.

The explosion of debt puts pressure on the Fed to keep increasing the money supply in order to maintain low interest rates. An increase in rates to anything close to what they would be in a free market could make it impossible for consumers, businesses, and (especially) the federal government to manage their debt. This would create a major economic crisis.

Infowars

The Fed is Planning to Send Money Directly to Americans in the Next Crisis

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Over the past decade, the one common theme despite the political upheaval and growing social and geopolitical instability, was that the market would keep marching higher and the Fed would continue injecting liquidity into the system.

The second common theme is that despite sparking unprecedented asset price inflation, price as measured across the broader economy (at least using the flawed CPI metric) would remain subdued (as a reminder, the Fed is desperate to ignite broad inflation as that is the only way the countless trillions of excess debt can be eliminated and yet it has so far failed to do so).

The Fed’s failure to reach its inflation target has sparked broad criticism from the economic establishment, even though as we showed in June, deflation is now a direct function of the Fed’s unconventional monetary policies as the lower yields slide, the lower the propensity to spend. In other words, the harder the Fed fights to stimulate inflation, the more deflation and more saving it spurs as a result (incidentally this is not the first time this “discovery” was made, in December we wrote “One Bank Makes A Stunning Discovery – The Fed’s Rate Cuts Are Now Deflationary“).

Zero Hedge

Pete Schiff: Dollar Crash Will Topple the Entire US ‘House of Cards’ Economy by Year’s End

house of cards

No one seems to be worried about the falling dollar, veteran stockbroker Peter Schiff writes on Twitter, as the US currency continues to slide versus major rivals amid gold and silver record growth.

According to Schiff the ignorance is “likely to remain the case until the fall becomes a crash, which I don’t think will begin until the Dollar Index breaks 80. At its current rate of decline that level could be breached before year end, perhaps by election day.”

The decline of the US dollar accelerated in recent weeks on a rise in coronavirus cases in the United States and indications of a pickup in global economic activity. The ICE US Dollar Index, which tracks the greenback against a basket of six major rivals, fell 0.4 percent on Friday to 92.635 and traded at its lowest since July 2018. Meanwhile, gold continued its rally to hit fresh all-time highs.

“Coronavirus just accelerated the process of the dollar’s fall and there’s nothing that the Federal Reserve could do right now to preserve the dollar from falling,” Schiff said on his podcast.

RT

Fedcoin: A New Scheme for Tyranny and Poverty

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If some Congress members get their way, the Federal Reserve may soon be able to track many of your purchases in real time and share that information with government agencies. This is just one of the problems with the proposed “digital dollar” or “fedcoin.”

Fedcoin was initially included in the first coronavirus spending bill. While the proposal was dropped from the final version of the bill, there is still great interest in fedcoin on Capitol Hill. Some progressives have embraced fedcoin as a way to provide Americans with a “universal basic income.”

Both the Senate Banking Committee and the House Financial Services Committee held hearings on fedcoin in June. This is the first step toward making fedcoin a reality.

Fedcoin would not be an actual coin. Instead, it would be a special account created and maintained for each American by the Federal Reserve. Each month, Fed employees could tap a few keys on a computer and — voila — each American would have dollars added to his Federal Reserve account. This is the 21st century equivalent of throwing money from helicopters.

Infowars

Jeff Bezos Wants Federal Control of Cryptocurrency

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Cashless Society: Democrats Propose ‘Digital Dollar’ Run By Feds

Kroger Stops Giving Customers Change As Nationwide Coin Shortage Worsens

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Due to an ongoing, and in some respect, a worsening nationwide coin shortage, The Kroger Company has stopped returning coins to cash-paying customers. At the same time, remainders can be donated to a charity or transferred to the customers’ loyalty cards, reported NewsChannel 5 Nashville WTVF

Kroger officials said, “at Kroger, we are implementing several creative solutions to minimize the impact to our customers…We know this is an inconvenience for our customers, and we appreciate their patience. The Treasury Department expects the shortage to diminish as more regions of the country reopen.”

Dayton Daily News, a sister publication of The Atlanta Journal-Constitution, spoke with Kroger spokeswoman Erin Rolfes who said the Federal Reserve is experiencing a coin shortage.

Last month, the Federal Reserve warned coin disruptions were coming due to the COVID-19 pandemic and shutdown of the economy.

Zero Hedge

Cashless Society: Democrats Propose ‘Digital Dollar’ Run By Feds

Germans Opt in to Cashless Grid

Sweden is on the Verge of Going Completely Cashless

Bill Gates, World Bank Helped Build Digital ID Structure Before Pandemic

Ron Paul’s Crusade to End the Fed Routinely Falls on Deaf Ears

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In a sign that the Federal Reserve is growing increasingly desperate to jump-start the economy, the Fed’s Secondary Market Credit Facility has begun purchasing individual corporate bonds. The Secondary Market Credit Facility was created by Congress as part of a coronavirus stimulus bill to purchase as much as 750 billion dollars of corporate credit. Until last week, the Secondary Market Credit Facility had limited its purchases to exchange-traded funds, which are bundled groups of stocks or bonds.

The bond purchasing initiative, like all Fed initiatives, will fail to produce long-term prosperity. These purchases distort the economy by increasing the money supply and thus lowering interest rates, which are the price of money. In this case, the Fed’s purchase of individual corporate bonds enables select corporations to pursue projects for which they could not otherwise have obtained funding. This distorts signals sent by the market, making these companies seem like better investments than they actually are and thus allowing these companies to attract more private investment. This will cause these companies to experience a Fed-created bubble. Like all Fed-created bubbles, the corporate bond bubble will eventually burst, causing businesses to collapse, investors to lose their money (unless they receive a government bailout), and workers to lose their jobs.

Infowars

The Federal Reserve: More Lethal than Coronavirus

The Federal Reserve is Leading Us into Another Economic Collapse

Ron Paul Warns: Congress Spending Spree is National Suicide

RON PAUL: Emergencies Do Not Trump the Constitution

Illegal, Private ‘Federal Reserve’ Manipulating Economy to Kill Prosperity

Rand Paul: It’s Time to Pass Audit the Fed

Trump Keeping Fed Alive

Sign Our Petition to Audit & Abolish the Federal Reserve

Banking Elite Blaming Pandemic For Economic Collapse They Created

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Last week the Federal Reserve released a report predicting that the next print on GDP numbers will likely show a loss 34.9% in the second quarter.

This is the biggest GDP plunge since the Great Depression; even the crash of 2008 doesn’t compare.  And when we take into account the fact that the Fed artificially boosts GDP calculations by adding in many non-productive government programs, we have to ask, what are the REAL losses above and beyond what the Fed admits to?

With the supply chain in disarray, many companies (like Apple) are trying to shift their manufacturing base to dodge the pandemic. Of course, none of them want to bring factories back to the US; there’s simply no incentive to do so. And, the small business sector has been crushed by the shutdowns, with the vast majority of those seeking bailout loans still waiting for aid and over 20.5 million employees laid off in April alone.

Alt-Market

Here’s Why Relief From Congress Won’t Spur Economy

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The ongoing economic collapse isn’t due to a lack of money, but rather a lack of goods and services being produced due to coronavirus lockdowns across the US.

Thus it shouldn’t be expected that Congress and the Federal Reserve can stop a recession by simply printing and distributing money to Americans.

“Contrary to the actions taken and the assurances made by these authorities, the economic fallout from COVID-19 is not due to a scarcity of money, but a scarcity of goods and services,” wrote James Talocka for the Mises Institute. “…It is production alone that brings about the means for consumption. [French classic economist] J.B. Say reminds us that there is no need to worry about a lack of consumption, because production always falls short of man’s wants.”

Infowars

Colleges Turn to Federal Reserve for More Coronavirus Aid

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After receiving $14 billion in Coronavirus Aid, Relief, and Economic Security (CARES) Act funding, colleges and universities are now turning to the Federal Reserve for more aid.

The American Council on Education (ACE) recently sent a letter to Federal Reserve Chairman Jerome Powell asking for clarification and exemptions for the newly announced Main Street Lending Program.

The organization, which represents more than 1,700 colleges and universities, asked the Fed whether “nonprofit private and public institutions” are eligible for the program, and if student employees can be exempt from the employee cap.

Campus Reform

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The Federal Reserve: More Lethal than Coronavirus

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Last week the Federal Reserve announced it will keep interest rates at or near zero until the economy recovers from the government-imposed shutdown. Following this announcement, Federal Reserve Chairman Jerome Powell urged Congress and the Trump administration to put aside any concerns about the deficit and spend whatever it takes to stimulate the economy and combat coronavirus.

The Federal Reserve previously announced it would make unlimited purchases of Treasury securities, thus encouraging Congress and the president to increase spending and debt. With some members of Congress talking about another multi-trillion-dollar stimulus bill, and with President Trump proposing a two trillion dollars infrastructure plan as a way to get Americans back to work, it is obvious, and not surprising, that Congress and President Trump gleefully agree with Powell’s advice.

Increasing the purchase of federal debt is not the only action the Fed has taken in a desperate attempt to keep the economy afloat. Since the coronavirus lockdowns began in early March, the Fed has greatly expanded its balance sheet. The Federal Reserve has also launched an unprecedented program to “loan” money directly to businesses.

Ron Paul

Central Bankers: Prepare For Months of ‘Rolling Shutdowns’

Stimulus Bill May Merge the Fed, Treasury into One Organization

Federal Reserve Buying Corporate Debt