Is the Federal Reserve losing control of the gold price? – PaulCraigRoberts.org

is-the-federal-reserve-losing-control-of-the-gold-price?-–-paulcraigroberts.org

08-08-19 10:04:00,

Is the Federal Reserve losing control of the gold price?

Paul Craig Roberts

After years of being kept in the doldrums by orchestrated short selling described on this website by Roberts and Kranzler, gold has lately moved up sharply reaching $1,510 this morning.  The gold price has continued to rise despite the continuing practice of dumping large volumes of naked contracts in the futures market.  The gold price is driven down but quickly recovers and moves on up.  I haven’t an explanation at this time for the new force that is more powerful than the short-selling that has been used to control the price of gold.

Various central banks have been converting their dollar reserves into gold, which reduces the demand for dollars and increases the demand for gold.  Existing stocks of gold available to fill orders are being drawn down, and new mining output is not keeping pace with the rise in demand.  Perhaps this is the explanation for the rise in the price of gold.

During the many years of Quantitative Easing the exchange value of the dollar was protected by the Japanese, British, and EU central banks also printing money to insure that their currencies did not rise in value relative to the dollar. The Federal Reserve needs to protect the dollar’s exchange value so that it continues in its role as the world’s reserve currency in which international transactions are conducted.  If the dollar loses this role, the US will lose the ability to pay its bills by printing dollars.  A dollar declining in value relative to other countries would cause flight from the dollar to the rising currencies.  Catastrophe quickly occurs from increasing the supply of a currency that central banks are unwilling to hold.

One problem remained. The dollar was depreciating relative to gold.  Rigging the currency market was necessary but not sufficient to stabilize the dollar’s value. The gold market also had to be rigged. To stop the dollar’s depreciation, naked short selling has been used to artificially increase the supply of paper gold in order to suppress the price.  Unlike equities, gold shorts don’t have to be covered. This turns the price-setting gold futures market into a paper market where contracts are settled primarily in cash and not by taking delivery of gold. 

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The Federal Reserve: A Failure Of The Rule Of Law

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14-03-19 09:01:00,

Authored by Alexander Salter via The American Institute for Economic Research,

“Money is power.” We’ve all heard this aphorism many times before. Too often it’s a lazy shorthand dismissal of the finding of mainstream economics, which show that the pursuit and possession of money often entails innocuous or even beneficial consequences for society. Dr. Johnson was right after all: “There are few ways in which a man can be more innocently employed than in getting money.”

But there are some contexts in which the saying is apt. An obvious case is the Federal Reserve. The Fed has a monopoly on the creation of base money, the fundamental asset underlying the banking and financial system. And over decades, with each instance of financial turbulence, the Fed has become less constrained in how, when, and why it creates base money. Since the Great Recession, the Fed has been able to bestow purchasing power, liquidity, and solvency on just about any financial organization it pleases. If that isn’t power, there’s no such thing.

The Federal Reserve System was created in 1913. It was intended to be a formalization of the interbank clearing system that then existed in the National Banking System. It was not intended to be a central bank. Even in the early 20th century, economists and politicians had some idea of what central banks did and how they behaved, and the existence of such an institution was widely regarded as inherently un-American, in the sense that it could not be reconciled with a self-governing society. That’s why so many proponents of the Federal Reserve System bent over backward to insist they were not advocating the creation of a central bank. And at the time, their repudiations were reasonable; there was no reason the Federal Reserve System had to acquire the powers it did.

But then the US entered the First World War. Wars have a way of eroding society’s long-established institutions. And the political process has a logic of its own. These forces combined to transform the Fed into what its critics feared it might become: a genuine central bank.

The Fed began supporting the market for US government debt during the First World War using techniques that were the forerunners of modern monetary policy.

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Federal Reserve Chairman Appears On ’60 Minutes’ – Why Now?

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12-03-19 01:03:00,

Authored by Mike Krieger via Liberty Blitzkrieg blog,

One of the most famous, and prescient, financial cartoons in American history is the above depiction of the Federal Reserve Bank as a giant octopus that would come to parasitically suck the life out of all U.S. institutions as well as free markets.

The image is taken from Alfred Owen Crozier’s U.S. Money Vs Corporation Currency, “Aldrich Plan,” Wall Street Confessions! Great Bank Combine, published in 1912, just a year before the creation of the Federal Reserve. 

On Sunday night, the current high priest of money printing, asset bubbles and inequality, Jerome Powell, appeared on 60 Minutes. Interviewer Scott Pelley mentioned the fact that such discussions are rare and noted the last time a Fed head appeared for such a chat was Ben Bernanke back in 2010.

As such, what I find most interesting about this event wasn’t Powell’s boilerplate, bureaucratic propaganda about how the economy’s doing fine and how much central bankers love average Americans, but why he and the institution he heads felt a need to do this now.

There’s no doubt something has the Fed spooked otherwise Powell never would have done this. One factor is they know the economic ground’s starting to shift beneath them, and they need to push a particular narrative ahead of time so central bankers can once again do as they please when “the time to act” arrives.

This is why Powell pushed the blame on the current economic slowdown on China and Europe. The Fed is no different than your average politician. It takes full credit when things go well, but endlessly deflects and blames outside forces when things fall apart.

Rule number 1 of the Federal Reserve:  It’s never the Fed’s fault.
Rule number 2 of the Federal Reserve:  It’s never the Fed’s fault.
Rule number 3 of the Federal Reserve…

You get the point. If central bankers accept blame, or admit they got anything over the past decade terribly wrong, then they can’t justify doing more of the same and worse in the future. And that’s exactly what they plan to do,

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The Federal Reserve: Biggest Scam In The History Of Mankind – Hidden Secrets of Money Ep 4 | Light On Conspiracies – Revealing the Agenda

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18-02-19 01:01:00,

Home / 1. Free Content / The Federal Reserve: Biggest Scam In The History Of Mankind – Hidden Secrets of Money Ep 4

Published on Oct 15, 2013

Who owns the Federal Reserve? You are about to learn one of the biggest secrets in the history of the world… it’s a secret that has huge effects for everyone who lives on this planet.

Most people can feel deep down that something isn’t quite right with the world economy, but few know what it is. Gone are the days where a family can survive on just one paycheck… every day it seems that things are more and more out of control, yet only one in a million understand why. You are about to discover the system that is ultimately responsible for most of the inequality in our world today. The powers that be DO NOT want you to know about this, as this system is what has kept them at the top of the financial food-chain for the last 100 years. Learning this will change your life, because it will change the choices that you make. If enough people learn it, it will change the world… because it will change the system . For this is the biggest Hidden Secret Of Money. Never in human history have so many been plundered by so few, and it’s all accomplished through this…

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Federal Reserve Confesses Sole Responsibility for All Recessions

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28-01-19 09:12:00,

Federal Reserve balance sheet reduction not happening yet even as the Fed applauds its own success

In a surprisingly candid admission, two former Federal Reserve chairs have stated that the Federal Reserve alone is responsible for creating all recessions in the United States.

Former Federal Reserve chief Ben Bernanke Federal Reserve creates all recessions

First, former Fed Chair Ben Bernanke said that

Expansions don’t die of old age. They get murdered.

MarketWatch

To clarify this statement, former Chair Janet Yellen placed the murder weapon in the Fed’s hands:

Two things usually end them…. One is financial imbalances, and the other is the Fed.

Think that through, and you quickly realize that both of those things are the Fed. Is there anyone left standing who would not say the Fed’s quantitative easing in the past decade was the biggest cause of financial imbalances all over the world in history? Moreover, whose profligate monetary policies led to the Great Financial Crisis that gave us the Great Recession?

So, the Fed loads the gun with financial causes and then pulls the trigger. In fact, I think it would be hard to find a major financial imbalance in the US that the Fed did not have a hand in creating or, at least, enabling. Therefore, if those are the only two causes, then it is always the Federal Reserve that causes recessions by its own admission.

And, yet, those Fed dons look so pleased with themselves.

Yellen went on to say that when the Fed is the culprit, it is generally because the central bank is forced to tighten policy to curtail inflation and ends up overplaying its hand. (She didn’t mention that the Fed’s monetary policy may have a hand in creating financial imbalances.)

Exactly, nor did she mention that the inflation they were “forced” to curtail always happens because of financial imbalances the Fed created or enabled. That is why I call our expansion-recession cycles, rinse-and-repeat cycles. Therefore, the Fed is only forced by its own ill-conceived actions. First you have to create the imbalance, which causes the economy and stocks to inflate, then you have to pull the trigger to shoot that down by tightening into a recession, which the Fed always does:

Bernanke elaborated on Yellen’s point,

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Federal Reserve Confesses Sole Responsibility For All Recessions

federal-reserve-confesses-sole-responsibility-for-all-recessions

21-01-19 09:00:00,

Authored by David Haggith via The Great Recession blog,

In a surprisingly candid admission, two former Federal Reserve chairs have stated that the Federal Reserve alone is responsible for creating all recessions in the United States.

First, former Fed Chair Ben Bernanke said that

Expansions don’t die of old age. They get murdered.

– MarketWatch

To clarify this statement, former Chair Janet Yellen placed the murder weapon in the Fed’s hands:

Two things usually end them… One is financial imbalances, and the other is the Fed.

Think that through, and you quickly realize that both of those things are the Fed. Is there anyone left standing who would not say the Fed’s quantitative easing in the past decade was the biggest cause of financial imbalances all over the world in history? Moreover, whose profligate monetary policies led to the Great Financial Crisis that gave us the Great Recession?

So, the Fed loads the gun with financial causes and then pulls the trigger. In fact, I think it would be hard to find a major financial imbalance in the US that the Fed did not have a hand in creating or, at least, enabling. Therefore, if those are the only two causes, then it is always the Federal Reserve that causes recessions by its own admission.

And, yet, those Fed dons look so pleased with themselves.

Yellen went on to say that when the Fed is the culprit, it is generally because the central bank is forced to tighten policy to curtail inflation and ends up overplaying its hand. (She didn’t mention that the Fed’s monetary policy may have a hand in creating financial imbalances.)

Exactly, nor did she mention that the inflation they were “forced” to curtail always happens because of financial imbalances the Fed created or enabled. That is why I call our expansion-recession cycles, rinse-and-repeat cycles. Therefore, the Fed is only forced by its own ill-conceived actions. First you have to create the imbalance, which causes the economy and stocks to inflate, then you have to pull the trigger to shoot that down by tightening into a recession,

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How The Federal Reserve Quietly Bankrupted The US Pension System

how-the-federal-reserve-quietly-bankrupted-the-us-pension-system

08-01-19 02:56:00,

Submitted by Stephanie Pomboy of Macro Mavens

Actions have consequences.  Even for the Fed.

That’s not a reference to the market’s grumpy reaction to the central bank’s continued rate hikes and quantitative tightening.  No.  The impact of both on financial assets were as obvious as they were inexorable.  To be sure, Wall Street’s resident soothsayers had a good run spinning tales that ‘this time’ was different. A tightening Fed, we were assured, was a good thing—a ringing endorsement of the economy’s indefatigable strength. But, in the end, there was simply no way around the basic fact: Just as rate cuts and QE were designed to expand the pool of credit and incent the embrace of risk, so would rate hikes and QT necessarily beget the reverse. And so they have.

But while the impact of receding liquidity and the reduced reward for reckless speculation and risk-taking have finally begun to play out on Bloomberg screens everywhere, the real devastation has yet to be revealed.  In the ensuing weeks and months the full and lugubrious legacy of the Fed’s great monetary experiment of the last decade will finally come into view.

Beyond inflating and bursting a bubble in corporate debt (with leveraged loans acting as posterchild), the Fed’s decade-long financial repression has had a far larger and more sinister impact: It has silently bankrupted the US pension system.  

Sound overly dramatic??

Here are the numbers from no lesser authority than the institution responsible for this destruction itself: the Federal Reserve.   By their calculations, at the end of the 3rd quarter, the funding shortfall of U.S. pension plans (public and private) stood at -$6.18t.  That’s trillion, with a capital ‘t’.  To put that in perspective, that’s roughly 30% of GDP:

But that’s not even the scary part.  The scary part is that this is the funding deficit NOW…after a decade of rampant financial asset inflation and a 10-year economic expansion. One shudders to imagine what the picture will look like as these tailwinds reverse.  If the last two cycles are any indication, it won’t be pretty. The DotCom bust sent the cumulative deficit from -$1.2t to -$3.1t and the GFC saw it swell from -$2.9t to -$5.3t. 

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Federal Reserve registriert erste Ausfall-Welle bei Kreditkarten

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07-12-18 04:22:00,

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