How The Fed Created An Uncontrollable “Monster”

how-the-fed-created-an-uncontrollable-“monster”

01-02-20 11:38:00,

Via Birch Gold Group,

Like Victor Frankenstein, the Fed may have created its own monster. It’s been called many things, such as Quantitative Easing (QE), QE Lite, QE/Not QE, “Organic” Balance Sheet Growth, and more…

But no matter what you choose to call it, the bottom line is this:

The Fed is growing its official balance sheet at a frantic pace to provide liquidity to various banking operations, including the repo markets.

In fact, the balance sheet has grown about $400 billion since August, as reflected in the uptick at the far right of this chart:

Along with the Fed’s decision to increase its balance sheet is a rise in risky asset prices. According to a piece at Newsmax, this is raising eyebrows:

Prices for stocks and other risky assets are also rising at a fast clip – a state of affairs that a growing chorus of investors, economists and former Fed officials say is no coincidence, and potentially a problem.

This pattern of rising prices in risky assets is similar to what happened when the Fed initiated the first three rounds of QE.

The potential problem behind a pattern like this is the “monster” that the Fed is creating. Addressing the problem means answering a critical question…

When and how does the spigot of Fed cash flow get turned off?

Peter Boockvar, chief investment officer with Bleakley Advisory Group, thinks we will have to wait and see what happens:

The risk is what happens when the Fed stops increasing their balance sheet… What will stocks do when that liquidity spigot stops? We’ll have to see.

Of course, if we “wait and see”, any potential damage to the economy will already have started.

Also keep in mind that Powell didn’t want the Fed’s “monster” to be called another round of QE, instead opting in October 2019 to label it “organic” balance sheet growth.

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The Fed Created The Everything Bubble And A Liquidity Crisis — What Happens Next?

the-fed-created-the-everything-bubble-and-a-liquidity-crisis-—-what-happens-next?

25-09-19 07:43:00,

By Brandon Smith

It’s an interesting dynamic that the Federal Reserve has conjured in the decade after the 2008 credit crash. They spent several years using artificial stimulus measures to inflate perhaps the largest financial bubble in the history of the US, and then a couple years ago something changed. They addicted markets and investors to easy cash only to then cut off the flow of monetary heroin. The system was so dependent on the Fed’s “China White” that all it took to give everyone the shakes was interest rate hikes to the neutral rate of inflation and a moderate balance sheet selloff. Now, the system is dying from shock and it’s too late for intravenous stimulus to save it.

For many this might seem unprecedented, but it’s really rather common. The Fed has a long history of inflating bubbles using easy liquidity and then imploding those bubbles with the tightening of credit. It also has a long history of pretending like it is trying to save the economy from crisis when it is actually the source of the crisis. As Congressman Charles Lindbergh Sr. warned after the panic of 1920:

Under the Federal Reserve Act, panics are scientifically created; the present panic is the first scientifically created one, worked out as we figure a mathematical problem…

In the latest theatrics of the Fed, a new trend has emerged – The “disappointing Fed”. In order to understand this disappointment, we have to define exactly what markets want from the central bank. Obviously, they want QE4; a massive liquidity program. For the past year at least they have been clamoring for it, and they still have yet to get it. But what does QE4 entail? In order to institute a new QE marathon the Fed would have to:

1) Lower the Fed funds rate to zero.

2) Lower the overnight repo lending rate to zero.

3) Stop balance sheet cuts.

4) Launch permanent asset purchases, NOT just overnight lending backed by collateral.

If the Fed was planning to kick the can on the collapse of the Everything Bubble, they would have initiated all of these steps and they would have done it at least 6-8 months ago. 

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How the U.S. Created the Cold War – Global Research

how-the-us.-created-the-cold-war-–-global-research

10-09-19 06:46:00,

There was a speech that the smug Harvard neoconservative Graham Allison presented at the US aristocracy’s TED Talks on 20 November 2018, and which is titled on youtube as “Is war between China and the US inevitable?” It currently has 1,217,326 views. The transcript is here.

His speech said that the US must continue being the world’s #1 power, or else persuade China’s Government to cooperate more with what America’s billionaires demand. He said that the model for the US regime’s supposed goodness in international affairs is The Marshall Plan after the end of World War II. He ended his speech with the following passage as pointing the way forward, to guide US foreign policies during the present era. Here is that concluding passage:

Let me remind you of what happened right after World War II. A remarkable group of Americans and Europeans and others, not just from government, but from the world of culture and business, engaged in a collective surge of imagination. And what they imagined and what they created was a new international order, the order that’s allowed you and me to live our lives, all of our lives, without great power war and with more prosperity than was ever seen before on the planet. So, a remarkable story. Interestingly, every pillar of this project that produced these results, when first proposed, was rejected by the foreign policy establishment as naive or unrealistic.

My favorite is the Marshall Plan. After World War II, Americans felt exhausted. They had demobilized 10 million troops, they were focused on an urgent domestic agenda. But as people began to appreciate how devastated Europe was and how aggressive Soviet communism was, Americans eventually decided to tax themselves a percent and a half of GDP every year for four years and send that money to Europe to help reconstruct these countries, including Germany and Italy, whose troops had just been killing Americans. Amazing. This also created the United Nations. Amazing. The Universal Declaration of Human Rights. The World Bank. NATO. All of these elements of an order for peace and prosperity. So, in a word, what we need to do is do it again.

The US did donate many billions of dollars to rebuild Europe.

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BRICS was created as a tool of attack: Lula | The Vineyard of the Saker

brics-was-created-as-a-tool-of-attack:-lula-|-the-vineyard-of-the-saker

30-08-19 08:12:00,

Former Brazilian leader wishes emerging economies were closer, recalls Obama ‘crashing’ Copenhagen climate meet

In a wide-ranging, two-hour-plus, exclusive interview from a prison room in Curitiba in southern Brazil, former Brazilian president Luis Inacio Lula da Silva re-emerged for the first time, after more than 500 days in jail, and sent a clear message to the world.

Amid the 24/7 media frenzy of scripted sound bites and “fake news”, it’s virtually impossible to find a present or former head of state anywhere, in a conversation with journalists, willing to speak deep from his soul, to comment on all current political developments and relish telling stories about the corridors of power. And all that while still in prison.

The first part of this mini-series focused on the Amazon. Here, we will focus on Brazil’s relationship with BRICS and Beijing. BRICS is the grouping of major emerging economies – Brazil, Russia, India and China – that formed in 2006 and then included South Africa in their annual meetings from 2010.

My first question to Lula was about BRICS and the current geopolitical chessboard, with the US facing a Russia-China strategic partnership. As president, from 2003 to 2010, Lula was instrumental in formatting and expanding the influence of BRICS – in sharp contrast with Brazil’s current President, Jair Bolsonaro, who appears to be convinced that China is a threat.

Lula stressed that Brazil should have been getting closer to China in a mirror process of what occurred between Russia and China: “When there was a BRICS summit here in Ceará state in Brazil, I told comrade Dilma [Rousseff, the former president] that we should organize a pact like the Russia-China pact. A huge pact giving the Chinese part of what they wanted, which was Brazil’s capacity to produce food and energy and also the capacity to have access to technological knowledge. Brazil needed a lot of infrastructure. We needed high-speed rail, many things. But in the end that did not happen.”

Lula defined his top priorities as he supported the creation of BRICS: economic autonomy, and uniting a group of nations capable of helping what the Washington consensus describes as LDCs – least developed countries.

He emphasized: “BRICS was not created to be an instrument of defense,

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“This Crisis Is Created By America”: Turks Blame Trump For Economic Collapse

“This Crisis Is Created By America”: Turks Blame Trump For Economic Collapse

10-08-18 09:32:00,

Turkey’s economy may be in freefall with soaring inflation, a plunging currency, sliding stocks and a gaping current account deficit, but don’t dare tell the locals that it is president Erdogan’s fault for keeping interest rates low and preventing an even greater crisis: according to Serap, a 23-year-old clerk at a clothes store in central Istanbul, there is only one entity to blame for the precipitous slide in Turkey’s lira currency.

“This crisis is created by America,” she said.

And a crisis it is: prices are soaring as a result of the collapsing currency – which this year has lost more than 35% against the dollar, and has overtaken the Argentine Peso for the worst performing currency of 2018 – with food, rents and fuel prices in Turkey surging, and the country’s pipeline operator raising the price of natural gas for electricity production by 50%.

But when one asks the local population who is responsible for this economic inferno, the answer is surprising.

Serap’s sentiments about the causes of the crisis are shared by many Turks and hint at why support for President Tayyip Erdogan, who after surviving a fake military coup in the summer of 2016, won re-election in June with super-charged presidential powers, looks untouched, at least for now. Erdogan’s loyal supporters see the currency sell-off as a U.S. attempt to undermine their country and president according to Reuters.

That’s also known as the Maduro defense: blame all domestic problems on “shady” foreign actors, usually involving the US. But while the US certainly has its history of intervening in foreign events, this time the crisis is entirely home grown, although predictably, Erdogan would be the last to admit it.

“If they have their dollars, we have our people, our God,” Erdogan said in a speech on Friday morning, casting the lira’s slide as a campaign against the nation.

His comments were all the rage, in some cases literally, across Turkey’s overwhelmingly pro-government media on Friday. Newspapers and TV stations have cast the lira crisis as a political assault, spiraling out of U.S. sanctions imposed on two Turkish ministers last week in a row over the detention of a U.S. evangelical pastor, Andrew Brunson.

“They issued a scandalous decision last week about our ministers,” said Serap,

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Russia has created its own Internet for use in times of war

Russia has created its own Internet for use in times of war

09-06-18 07:50:00,

The Internet we know today had its beginnings as ARPANET, and it was the creation of the Defense Department in the United States to facilitate robust communications between computer installations in the event of a nuclear war or other major catastrophe.

Russia’s Izvestia reported in the week of June 7 that they are creating the same thing – a “closed cloud” storage for the purpose of storing proprietary and confidential information. This is the latest improvement in a radically improving Russian military organization that will allow the country to function within its own borders independently of the global Internet, should such actions be deemed necessary.

Further, according to DefenseOne.com, this new cloud is comprised of all-Russian hardware and software, and it is very inexpensive. The cost is estimated to be about 290 million rubles, or about $6.25 million, and it is expected to be complete and operational by the year 2020.

The cloud is to be connected to what is called the “Closed Transfer Segment” which is the name given the Russian military’s internal network. Vladimir Putin’s leading IT advisor, Herman Klimenko, noted that in wartime, the country could disconnect entirely from the global internet and run its commercial traffic entirely on the Closed Transfer Segment.

The Russian innovations are interesting – In 2017, the country began developing its own DNS (directory naming system) that allows one’s own web browser to connect to any web server in the world.

The software noted above that is all Russian is based on Linux, so it is open-source at the base and free of interference from American companies such as Microsoft. This began development in 2010. In 2015, the Russian government mandated that all data on its citizens be stored on Russian soil.

These developments are further proof that the Russian Federation is shaking off the idea that it must somehow depend on the West for its best general welfare.

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How & Why Ice Ages Are Created | Armstrong Economics

How & Why Ice Ages Are Created | Armstrong Economics

29-05-18 06:24:00,

The weather is still unusually cold in the north. In Newfoundland, they woke up to a foot of snow.  In Iceland, they just had the coldest day in 100 years. It has long been understood that to create an Ice Age, the artic actually should be ice-free. The Arctic Ocean is the smallest and shallowest of the world’s five major oceans. We have been warning that our models projected that the energy output of the sun would drop into the end of this Economic Confidence Model wave 2032. This has now been confirmed as the energy output has turned down sharply since 2015.

Here is the picture that started the whole Global Warming propaganda. Yet they pretend that if the Arctic Ocean melted the sea levels would rise and flood places even like Miami. However, the Arctic Ocean has been free of ice historically many times. The passage through the ice has historically come and gone. The first to actually sail through the water was the Norwegian explorer Roald Amundsen’s ship which traveled East to West between 1903 and 1906. This idea that the Arctic Ocean is always frozen over is simply not correct.

There are two routes known as the northern and southern routes of the Northwest Passage which have been open during occasional years in the past. According to records from Environment Canada, the southern route was “open” (no more than 60% ice covered) occasionally as far back as the 1970s, and the northern route was open in the summer of 1998. The northern route has since roughly 2007 has begun to open again. The northern route was open in 2007, 2008, 2010, 2011 (which was a record-low ice year), 2012, 2015, and now, into 2016 as well. While the alarmists are yelling, they also do not understand the history or the dynamics of an ice age.

The real experts on the oceans and how they function were at the Lamont-Doherty Earth Observatory at Columbia University. It was in 1956 when they published A theory of ice ages by Maurice Ewing and William Donn. They were the most influential oceanographers to date, yet the Global Warming people have completely ignored their work and bastardized it for political gain.

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