pafret Loc: Northeast

"The Fed Can’t Stop What’s Coming"


"The Fed Can’t Stop What’s Coming"
by Bill Bonner

YOUGHAL, IRELAND – "The show is Donald Trump. And it plays to sold-out audiences, 24/7. Meanwhile, in the back of the crowd, the Deep State goes about its work – picking pockets. The political world thus unchanged… we move back to the financial world.

King of Debt: But wait… here comes politics again, sticking its big nose in. From CNBC: "Stocks fell on Thursday amid criticism of the Federal Reserve by President Donald Trump. The Dow lost 134 points. In a stinging and historically rare criticism, Donald Trump expressed frustration with the Federal Reserve and said the central bank could disrupt the economic recovery.

Fed officials, including Chairman Jerome Powell, have raised interest rates twice this year and have pointed to two more before the end of 2018. Trump, in an interview with CNBC, said he does not approve, even though he said he “put a very good man in” at the Fed in Powell. “I’m not thrilled…” said the man who once described himself as “the king of debt” and a “low interest” guy."

Donald Trump is the last person who wants to see interest rates go up. Not only does his personal business empire depend on low rates… so does his political empire.

Per The Wall Street Journal: "The Trump administration expects the annual budget deficits to rise nearly $100 billion more than previously forecast in each of the next three years, pushing the federal deficit above $1 trillion starting next year."

Just Numbers: Well, well… Who saw that coming? Larry Kudlow, Trump’s top economic advisor, said the tax cuts were going to light a fire under the U.S. economy. It would be a “supply-side” boost, he said. This would decrease the size of deficits, he forecast. Don’t worry about the debt, he assured us.

But you can do the calculation yourself: Lower tax receipts (because of the tax cuts) + rising spending (budget increases) + more borrowing (to cover the larger deficit) + higher interest rate expenses (more debt at higher rates) = $1 trillion deficits.

Over the next decade, the federal debt is already on track to rise from $21 trillion to $37 trillion.

It’s just numbers. More people retiring. More people drawing Social Security and medical benefits. More spending on the Warfare and Police States. But these numbers assume that nothing bad happens. And yet we know from experience that something bad always this way comes. More specifically, it will be almost impossible not to have a market crash/recession sometime over the next 10 years.

And then, all the calm and cooperative numbers lined up so carefully on the U.S. chart of anticipated accounts go into a pandemonium of panic and despair. The 5’s head for the exits. The 6’s collapse and cower in corners. The 7’s look for sharp objects or open windows.

And that’s when Mr. Trump (or whoever is in the White House at the time) might lean heavily on the Fed to come to the rescue. But, as we have maintained for years, there will be no need. Already, the Fed is preparing to intervene… in the only way it knows how.

Fed Mistakes:
As you’ll recall, Fed policy consists of the same three mistakes… The Fed is now making Mistake #2: It is raising rates to try normalizing the financial markets. Inflation is running at 2.9%. Its current fed funds target rate is between 1.75% and 2%. So it is still lending money at very un-normal, negative real rates. It claims it will make two more hikes this year to cut off the supply of EZ money and get ahead of inflation. But already, it is preparing for its Mistake #3 – cutting rates in a panic when Mistake #2 causes stocks to fall.

Here’s a report from Bloomberg: "Federal Reserve Chairman Jerome Powell said the central bank will continue to gradually raise interest rates “for now’’ to keep inflation near target amid a strong U.S. labor market. Officials in June signaled they plan to continue to raise rates at a gradual pace, penciling in two more quarter-point hikes for 2018. Powell’s emphasis that gradual increases are the right path “for now’’ may suggest the committee’s debate about pausing those hikes once the rate gets closer to a level they consider neutral – neither adding stimulus nor hurting growth – is likely to intensify."

Yes, Jerome Powell is only admitting what we already knew… The Fed will never willingly revert to normal (market-discovered) interest rates. Instead, normalization will be forced upon it by a financial disaster – numbers that run amok. Stay tuned."
- https://bonnerandpartners.com/

Chocura750

I remember the inflation of the seventies reaching the teens and then Carter, not Reagan, appointed Paul Volcher, Chairman of the Federal Reserve, who stopped inflation by raising the interest rate controlled by the Fed to 20% to accomplish it. I think raising rates today is the way to go even it it croaks the stock market and causes job losses. It's more important to protect the bond market than the stock market. It is long past the time to take away the punch bowl.
Trump.is annoyed at Powell as was Johnson with Martin who accommodated Johnson to a degree, hence the inflation in the seventies proving you can't have guns and butter without deficits and high interest. Trump fatal mistake was the late cycle tax cut followed by the budget busting trillion spending bill. That happened only last December, it will take time for Trump's folly to upset the economy, but it's starting. Inflation will be back big time soon, then the tax cut will have to be reversed and Paul Volcker resurrected and appointed head of the Fed.
I can't believe Kudlow actually believes the supply side myth.

currahee

The FED, a private arm of the ruling global banking cartel, prints our money and charges the citizens via their Washington buyers compound interest to be paid back through the FICA of their check earned through their labor. This never-ending cycle of debt and punishment for not paying to it with banker inflation can be stopped by simply "nationalizing the FED." I believe President Trump will do this to take back our Republic from these "Bolshevik" thieves who have kept our society in slavery since 1913.

buffalo Loc: Texas

the illegal, unConstitutional, for profit fed of the global banking cartel should be abolished!!!

The United States Constitution, Article 1, Section 8--To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;

trucksterbud

The Federal Reserve is "Funny Money"......... in case you didn't know.... The globalist bankers ( International Criminal Cabal ) print OUR money for us and charge us outrageous interest for doing it... Our money is supposed to say "U S Treasury Note" on it, with NO DEBT OR INTEREST ATTACHED.... not Federal Reserve Note....

The only way out of this is to "BREAK" the Federal Reserve........... Trump is doing that now... His trade policies and tarriffs are meant to do just that.... China may issue a bunch of bullhokey in response to Trumps tarriffs, but I don't see trade coming to a halt. There are still trains a mile long across Arizona and Calif bringing in goods from China 1,000,000 tons at a time. There are still trucks lined up in Long Beach and Tacoma picking up containers and freigt - by the 1,000's.

The global currency reset has been discussed for a while, and it involves BRINGING DOWN THE FEDERAL RESERVE...