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Posts Tagged ‘Jerome Powell’

The Crooks Running The Federal Reserve Have Been Getting High On Their Own Supply

Posted by M. C. on September 30, 2021

They knew that flooding the financial system with new money would cause the value of those investments to go up.

In other words, they made conscious decisions that they knew would make themselves even richer.

http://theeconomiccollapseblog.com/the-crooks-running-the-federal-reserve-have-been-getting-high-on-their-own-supply/

by Michael Snyder

Liquidity injections are like a drug, and the financial markets just can’t get enough of them.  But as they were endlessly juicing the stock market, officials at the Federal Reserve broke one of the cardinal rules of drug dealing.  You never get high on your own supply.  It turns out that quite a few of the big dogs over at the Fed have very large investments which greatly benefitted from all of the cash that the Federal Reserve was endlessly pumping into the marketplace.  If that sounds “extremely corrupt” to you, that is because it is extremely corrupt, and it is another example that shows why the Federal Reserve should be completely abolished.

Earlier this week, the entire nation was stunned when news of this scandal first started to break

Federal Reserve Chairman Jerome Powell directed staff to review the central bank’s ethics rules for appropriate financial activities after disclosures that several senior central bank officials made multiple multimillion-dollar stock trades in 2020, while others held significant investments.

That sounds really bad, right?

But then more of the specific details started coming out and it got even worse

  • Powell held between $1.25 million and $2.5 million of municipal bonds in family trusts over which he is said to have no control. They were just a small portion of his total reported assets. While the bonds were purchased before 2019, they were held while the Fed last year bought more than $5 billion in munis, including one from the state of Illinois purchased by his family trust in 2016.
  • Boston Fed President Eric Rosengren held between $151,000 and $800,000 worth of real estate investment trusts that owned mortgage-backed securities. He made as many as 37 separate trades in the four REITS while the Fed purchased almost $700 billion in MBS.
  • Richmond Fed President Thomas Barkin held $1.35 million to $3 million in individual corporate bonds purchased before 2020. They include bonds of Pepsi, Home Depot and Eli Lilly. The Fed last year opened a corporate bond-buying facility and purchased $46.5 billion of corporate bonds.

They knew that flooding the financial system with new money would cause the value of those investments to go up.

In other words, they made conscious decisions that they knew would make themselves even richer.

This is the sort of extreme corruption that we would expect to see in third world dictatorships, but it is happening right here in the United States of America.

But at least nobody got hurt, right?

Wrong.

As the Federal Reserve and other global central banks have been flooding their respective systems with unprecedented amounts of new money, food prices have been aggressively rising all over the globe…

Whether for bread, rice or tortillas, governments across the world know that rising food costs can come with a political price. The dilemma is whether they can do enough to prevent having to pay it.

Global food prices were up 33% in August from a year earlier with vegetable oil, grains and meat on the rise, data from the United Nations Food and Agriculture Organization show. And it’s not likely to get better as extreme weather, soaring freight and fertilizer costs, shipping bottlenecks and labor shortages compound the problem.

You and I may be able to handle rising food prices (at least for now), but on the other side of the globe there are scores of people that are deeply suffering at this moment

Filipino broom maker Gloria Hernandez longs for chicken and milkfish — big milkfish. She can only afford small ones now, and they don’t add up to a decent meal. She eats rice with coffee twice a day so she doesn’t feel hungry. Fried eggs and bread — those are the foods Nigerian clergyman Femi Oyekan Moses used to eat all the time and misses the most. Now he mainly eats beans and corn and often skips lunch.

Hernandez and Moses are part of an emerging group who could once provide regular meals for themselves and their families but are now struggling because of the pandemic. They’re not on the verge of starvation as so many millions are, but they’re suffering from what’s called “food insecurity” in moderate to severe degrees, unable to afford a balanced and nutritious diet because of income loss and rising prices.

In fact, it is being reported that the number of people around the world that are facing “food insecurity” increased by 320 million in just 12 months

According to a July report from the World Food Programme and the World Health Organization, 2.37 billion people worldwide, or one in every three people, were in that latter category in 2020. That’s an increase of 320 million people in one year.

Hundreds of millions of people do not have enough food to eat tonight because global central bankers wanted to make themselves and their wealthy friends even wealthier.

You can call that whatever you want.

I call that “evil”.

The reason we still have a Federal Reserve is because the American people kept sending politicians to Washington that support the Federal Reserve.

In recent years there have been people running for office that were calling for the Federal Reserve to be abolished, but they didn’t get the kind of support that they deserved.

Hopefully these shocking new revelations about Fed officials will start to wake more people up.

I would love see a renewed “End the Fed” movement in this country.

Because the truth is that we do not need a central bank to prop up our financial system and run our economy.  We are supposed to have a free market economy, and our financial markets are not supposed to be a rigged game.

What has been going on at the Fed should actually not surprise any of us, because it is simply a reflection of the deep corruption that we are seeing on just about every level of our society.

Without at least some basic level of morality, no society can survive for long.

Sadly, the level of morality in our society continues to sink, and it is often those that walk the halls of power that are the most corrupt of all.

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The Biggest Federal Reserve Scandal

Posted by M. C. on September 27, 2021

A limited audit authorized by the Dodd-Frank Act found that between 2007 and 2010, the Federal Reserve committed over 16 trillion dollars to foreign central banks and politically influential private companies. Imagine what a full audit would find. It is time to end the scandal of allowing a secretive central bank to have so much power over the economy and our liberty. It is time to audit, and end, the Fed.

https://mailchi.mp/ronpaulinstitute/sept11at20-115662?e=ff526b933a

Sept 27 – Following revelations that Federal Reserve officials made trades in financial assets while the Fed was taking extraordinary efforts to “stimulate” the economy, Federal Reserve Chairman Jerome Powell ordered a review of the Fed’s ethics rules. While these trades appear problematic, they pale in comparison to the biggest Fed scandal — the Fed’s impoverishment of ordinary Americans, enrichment of the elites, and facilitation of government debt and deficits.

The depression induced by coronavirus, though really caused by so-called public health actions government took in response, was the official reason for the Fed’s increased asset purchases last year. However, the Fed actually started ramping up its money creating activities in September of 2019, when it began pouring billions a day into the repo markets, which banks use to make short-term loans to each other, in order to keep repo market interest rates low.

Coronavirus was just a convenient excuse for the Fed to do more of what it was already doing. Now, the Fed is using the limited reopening as a scapegoat for rising prices. Of course, anyone who understands Austrian economics understands that rising prices are a symptom, not a cause, of inflation. Inflation is the very act of money creation by the Fed.

Rising prices that diminish the average American’s standard of living are not the only result of the Fed’s manipulation of the money supply. The manipulation distorts economic signals, producing results including booms, bubbles, and busts.

Inflation has always benefited the well-connected elites who receive the Fed’s newly created money before the new money causes widespread price increases. The true motivation behind Fed policies was revealed by former Fed official Andrew Huszar in 2013. Huszar, writing for the Wall Street Journal, confirmed that quantitative easing kept stock prices high, instead of helping Americans struggling with the aftereffects of the 2008 meltdown.

Other beneficiaries of the Fed are big-spending politicians. The Federal Reserve’s purchase of federal debt instruments keeps the federal government’s debt servicing costs manageable. This is why, despite Chairman Powell’s recent suggestion that the Fed will soon begin “tapering” its purchases of Treasuries, the Fed is unlikely to significantly reduce its purchase of Treasuries or allow interest rates to significantly increase.

Powell is also unlikely to upset President Biden and Biden’s congressional allies as long as progressives are urging Biden not to reappoint Powell. Progressives want to replace Powell with someone more committed to fighting climate change and systemic racism, two boogeymen routinely bought out as excuses for vast expansions in government spending and power.

Another major scandal involving the Fed is Congress’ refusal to pass the Audit the Fed bill and let the American people know the truth about the Fed’s operations. Audit the Fed authorizes a Government Accountability Office (GAO) audit of the Fed’s dealing with foreign governments and central banks, the Fed’s discount window operations, reserves of member banks, securities credit, interest on deposits, and open market transactions. Audit the Fed would finally reveal the truth about the Fed’s operations.

A limited audit authorized by the Dodd-Frank Act found that between 2007 and 2010, the Federal Reserve committed over 16 trillion dollars to foreign central banks and politically influential private companies. Imagine what a full audit would find. It is time to end the scandal of allowing a secretive central bank to have so much power over the economy and our liberty. It is time to audit, and end, the Fed.



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Too Much Inflation? Just Raise the Inflation Target! | Mises Wire

Posted by M. C. on September 24, 2021

But it’s a safe bet that if the accepted inflation target were increased to 4 percent, we’d be hearing little to nothing right now about tapering, normalization, or any other effort to cut price inflation. The Fed would then be more free to keep the easy money spigot open longer without having to hear complaints that the Fed has “lost control” of price inflation. That would be great for stock prices and real estate prices. Ordinary people, on the other hand, might fare less well. 

https://mises.org/wire/too-much-inflation-just-raise-inflation-target

Ryan McMaken

In late August, Fed chairman Jerome Powell suggested that the Federal Reserve would begin tapering before the end of the year, an admission that price inflation was rising above the 2 percent target. Nonetheless, the Fed took no immediate action in the following month. This week, Powell again suggested a taper would begin soon, stating it would begin soon enough that the process could “conclud[e] around the middle of next year,” and maybe could begin in November. This, of course, was highly conditional, with Powell noting this taper would only happen if “the economic recovery remains on track.”

Some interpreted this as a hawkish turn for Powell, but again, we should expect no immediate action on this. Lackluster economic growth remains a concern and Powell’s qualifier on the “recovery” remaining on track will be key. Last week, Goldman downgraded the US economic growth forecast, and the Beige Book—which always casts economic growth in a rosy glow—also reduced its description of the economy during July and August to “moderate.” Meanwhile, the Bank of England today signaled a worsening global situation with its own downgrade of growth expectations. In other words, if the economy isn’t improving enough—according to the Fed—then it can simply abandon plans to taper.

The Fed may be talking taper, but fears of low growth among doves will fuel ongoing calls for continued stimulus. In fact, we’re already seeing some calls for abandoning the 2 percent inflation target in favor of even higher targets. This, it is believed, will allow for longer and more aggressive periods of stimulus. 

A Weak Recovery

The root of this drive for more inflation lies partly in the fact that many inflation doves believe that the Fed was too timid with stimulus after the Great Recession. Indeed, growth was remarkably slow in those days, producing “the slowest economic expansion” in many decades.1 This was in spite immense amounts of monetary stimulus. Nonetheless, the Fed repeatedly spoke of an “improving economy,” and repeatedly hinted at tapering. But it was only in 2016 that the Fed finally dared to allow the target interest rate to inch upward. This was largely done out of fear the Fed would have no room to maneuver in case of another crisis. Price inflation, after all, remained low in the official measures.

But in 2017 and 2018, when CPI inflation began to push above 2 percent, the expectation arose that the Fed would begin to meaningfully taper to keep inflation near the stated 2 percent target. This alarmed some inflation doves who were concerned—with good reason—that any reining in of the Fed’s easy money policies would end the very fragile and lackluster recovery then underway. They wanted to keep the asset-price inflation going—to reap the benefits of the so-called “wealth effect.” These fears were partially borne out when, in spite of the timidity of the Fed’s tapering efforts after 2018, the repo crisis of 2019 suggested trouble was indeed brewing. And it’s not surprising. Economic “growth” rested largely on a mountain of zombie companies and a financialized economy addicted to artificially cheap credit. 

How that would have played out in the absence of the covid panic is unknown. In any case, efforts at reining in monetary inflation evaporated with the covid crisis and the target interest rate was quickly returned to 0.25 percent. Additional asset purchases resumed at breakneck speed, with the Fed’s portfolio soon topping $8 trillion.

Pushing Inflation Targets Upward

The covid crisis gave doves an opportunity to press for a more “flexible” inflation target. In August of 2020—with central bankers looking for new ways to justify continued stimulus—the Fed adopted a new policy in which it would pursue an average 2 percent inflation goal. In other words, the Fed could now pursue a price inflation goal above 2 percent for some periods so long as it all averaged out to 2 percent over time.

But even that hasn’t been enough for the advocates of ever more price inflation. We’re now seeing calls for ending the 2 percent target altogether—and raising it.

For example, writing at the Wall Street Journal earlier this month, Greg Ip noted that Powell appears to be banking on the inflation rate soon returning to 2 percent. But what if it doesn’t? Ip says if inflation remains above targets, the Fed should just raise the targets. He writes:

One strategy [Powell]—or his successor—should consider in that eventuality is to simply raise the target.

And why pursue higher inflation? Ip takes the popular view of the “mythical trade-off between higher employment and inflation,” as Brendan Brown describes it. For Ip, higher inflation is the way to ensure an employment-fueled expansion, and he writes:

Why would higher inflation ever be a good thing? Economic theory says modestly higher, stable inflation should mean fewer and less severe recessions, and less need for exotic tools such as central-bank bond buying, which may inflate asset bubbles. More practically, if inflation ends up closer to 3% than 2% next year, raising the target would relieve the Fed of jacking up interest rates to get inflation down, destroying jobs in the process.

According to Ip, the too-low 2 percent target places the Fed in an intolerable bind. The Fed needs more room to breathe. Rather than feel the pressure to taper just because price inflation has risen above the 2 percent target, Ip wants to make sure the Fed can just keep on with the stimulus until price inflation exceeds 3 percent, or maybe even 4 percent. And who knows? After that, maybe “economic theory” will tell us that 5 percent inflation is an even better target. Certainly, that would be no less arbitrary a number than 4 percent or 2 percent.

How Inflation Fears Put Political Limits on Easy-Money Policies

The need to raise the target rate is essentially political. Presumably, the longer inflation persists above the target rate, the more the Fed will feel pressure to bring inflation back down through some sort of tapering. After all, the adoption of a 2 percent target implies 2 percent is the “correct” inflation rate. Anything higher than that is presumably “too much.” With the Fed moving toward the 2 percent target since the 1996 —and having formally adopted it in 2012—the Fed’s credibility is on the line if the Fed simply ignores the target.

But it’s a safe bet that if the accepted inflation target were increased to 4 percent, we’d be hearing little to nothing right now about tapering, normalization, or any other effort to cut price inflation. The Fed would then be more free to keep the easy money spigot open longer without having to hear complaints that the Fed has “lost control” of price inflation. That would be great for stock prices and real estate prices. Ordinary people, on the other hand, might fare less well

  • 1. Brendan Brown, The Case Against 2 Per Cent Inflation: From Negative Interest Rates to a  21st Century Gold Standard, (Cham, Switzerland: Palgrave Macmillan, 2018), p. 8.

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Ryan McMaken is a senior editor at the Mises Institute. Send him your article submissions for the Mises Wire and Power and Market, but read article guidelinesfirst.

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Doug Casey on the Fed to Address Inequality And Climate Change

Posted by M. C. on December 25, 2020

Doug Casey: The Fed is one of the main creators of inequality. The Establishment, the Deep State types, and the other cronies who hang around the government are closest to the fire hydrant of money spewing from the Fed. They get their fill of it before any trickles down to the “little people.”

The solution to the problem is to abolish the Fed. But it’s so entrenched and so central to the corrupt system, that’s impossible. At least short of a monetary collapse—although a monetary collapse is in the cards. But, at a minimum, the Fed shouldn’t try to act as a social engineer.

https://internationalman.com/articles/doug-casey-on-the-fed-to-address-inequality-and-climate-change/

International Man: Recently, the calls for the Fed to add a third mandate to address racial and economic inequality have grown louder.

Will we see a redistribution of wealth soon?

Doug Casey: It seems the movement towards black “reparations” is building momentum. These things always start small, testing the water, then grow when nobody either laughs at them for being stupid or decries them as evil. Most Americans are now too intimidated and confused to do that, however.

It’s similar to MMT. A year ago, the notion of Modern Monetary Theory was too outrageous a notion for a sensible person to bother considering; now, it’s practically public policy.

And, incidentally, when I say “black,” I don’t capitalize the word, as very recent politically correct fashion dictates. Capitalizing it just emphasizes and accentuates racial differences—as do most “woke” practices.

It’s another sign of the mass insanity that’s sweeping the world. Like almost everybody wearing masks when walking down the street, or even bicycling in the countryside. Not to mention locking down the whole country, practically the entire world, like a prison. It’s quite ironic to me. In the past, I’ve often joked that the Earth was a prison planet. Now it’s no joke.

Anyway, the idea of reparations is even more insane, but it’s taking off. It’s the destructive, racist idea of affirmative action on steroids.

It’s one genuinely crazy thing after another, like NASDAQ requiring listed companies to have at least two board members of so-called minority groups, including one non-white person and one with a sexual aberration.

Movies are expected to have the same kind of composition now. You see it to a large degree in commercials on TV. When I watch the boob-tube, I feel like I’m the only straight white male left in the US.

The discrimination against Asians is equally criminal, especially when it comes to getting into college. If you’re a smart and hard-working Asian, you now have to be even smarter and harder working to compete.

These PC fools are making accidents of birth into defining features of existence. The only good thing about the trend is that these people may be overreaching and will self-destruct. Hopefully, that will happen before they destroy society itself.

International Man: Federal Reserve Chairman Jerome Powell has spoken in length about the Fed’s interest to address economic inequality.

Ironically, the one institution that is single-handedly responsible for destructive monetary policies and money printing of epic proportions plans to do more of the same to “solve” the very problem they created.

What are your thoughts on this?

Doug Casey: The Fed is one of the main creators of inequality. The Establishment, the Deep State types, and the other cronies who hang around the government are closest to the fire hydrant of money spewing from the Fed. They get their fill of it before any trickles down to the “little people.”

The solution to the problem is to abolish the Fed. But it’s so entrenched and so central to the corrupt system, that’s impossible. At least short of a monetary collapse—although a monetary collapse is in the cards. But, at a minimum, the Fed shouldn’t try to act as a social engineer.

It certainly shouldn’t give money to blacks just because they’re black in the form of reparations or for any other reason. The notion is criminally stupid. All exchange must be mutual and free. If it’s not, it breeds resentment for both the giver and the receiver.

Free stuff, like welfare and free government housing, has already destroyed black families and black individuals. Places like Cabrini-Green and Pruitt-Igoe are monuments to government planning. If the Fed gets involved in passing out more free money, it’s only going to cement the average black more solidly to the bottom of society and create more race antagonism.

Well-positioned blacks like Jesse Jackson, Al Sharpton, Maxine Waters, and hundreds of others who are getting rich by virtue of being black are all for it, of course. There’s big money in disguising race-baiting as virtue signaling.

International Man: Recently, Joe Biden announced that he would nominate former Fed Chairman Janet Yellen for US Treasury Secretary. In her first remarks, Yellen spoke about her plans to address racial disparities and inequality.

Is there a trend developing here where racial and economic inequality has become the justification for dangerous monetary policies?

Doug Casey: Race has become a justification for practically everything today. Deep State types in general, and the Democrats in particular, emphasize race and gender differences, which does nothing but aggravate the situation.

This nomination is an excellent deal for Yellen, who’s moved from being a nothing nobody academic to Fed Chair, and now Treasury Secretary. By the time she finishes her term in office, she’ll be a centimillionaire—the usual drill, six-figure speeches, seven-figure book contracts, fat directors fees, consulting fees, and insider investment deals. She’ll do well for someone who has zero business experience and has detracted hugely from the world’s real wealth.

She’s a model for the kind of people who want to go into government to become rich and famous.

International Man: Fed chairman Powell has made countless remarks about the need for the US central bank to address climate change.

What is going on here?

Doug Casey: It’s a good question.

How can they address the so-called problem of climate change? Climate change has been going on since the Earth came together 4.5 billion years ago, and it will continue on its own path, primarily influenced by the sun and secondarily by things like volcanism, cosmic rays, and peculiarities of the planets orbit, long after mankind has gone.

But destroying the economy by printing up more money certainly isn’t an answer to climate change. However, I’m sure that what’s on Powell’s mind is making money easier to get for things like windmills and solar panels. This is more state direction of investment. It was a disaster for the USSR and every other socialist and state-directed economy and will be for us as well.

You’ll notice that the Chinese and other Asian economies don’t indulge in this kind of politically correct investing. It’s a major reason why they’re on the way up, and we’re on the way down.

Janet and Jerome’s excellent adventure in climate engineering won’t end well.

International Man: With climate change and racial inequality, the Fed is creating all sorts of new ridiculous pretexts to justify whatever it wants to do. It would be comical if the consequences weren’t so destructive. What do you think comes next?

Doug Casey: At this point, the Federal Reserve, which most Americans barely even know exists, has become extremely important to everybody.

It’s now the main source of government income—greater even than the income tax—and this is likely to continue. Agencies like the Fed grow when they have unlimited funding. But it’s more than just mission creep at this point.

We saw mission creep during the Vietnam war and all other wars. Now the Fed has been enlisted to fight the war on poverty, the war on racism, and global warming. The problem is that war is the health of the State—but a catastrophe for society.

The Fed started out as essentially a clearinghouse for banks; it was instructed to maintain the value of the currency. It has totally failed at that mission since its creation. The US dollar was stable from 1789 up until 1913 when the Fed was instituted. Since then, the dollar lost has about 97% of its value, and the degeneration is radically accelerating.

Now the Fed is supposed to ensure full employment, racial and gender equality, and sunny days in addition. The next abomination will be Fed Coin, a digital dollar, which will eliminate all privacy from financial transactions.

I don’t think anything can turn the situation around at this point. The only thing you can do is become as wealthy as possible to insulate yourself.

The next step will be something resembling World War III, probably with China. The US will turn into a police state, which in many ways, it was during World Wars I and  II.

It’s going to be much more serious this time around.

Editor’s Note: Economically, politically, and socially, the United States seems to be headed down a path that’s not only inconsistent with the founding principles of the country, but accelerating quickly toward boundless decay.

In the years ahead, there will likely be much less stability of any kind.

That’s exactly why New York Times bestselling author Doug Casey and his team just released an urgent new report titled Doug Casey’s Top 7 Predictions for the Raging 2020s.

Click here to download the free PDF now.

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The Last Fed Chairman?

Posted by M. C. on January 30, 2018

Let’s hope so.  Why do the biggest money creator and the biggest spender (pentagram) are never pressured for audits? Because the only ones not making out are you and me.

http://ronpaulinstitute.org/archives/featured-articles/2018/january/29/the-last-fed-chairman/

The economy may seem to have recovered, but the recovery is not built on a firm foundation. Instead it rests on Fed-created bubbles in areas such as automobile sales, credit cards debt, student loan debt, stocks, and even a new housing bubble.

The most dangerous bubble is the government debt bubble. The Fed facilitates deficit spending by monetizing the federal debt… Read the rest of this entry »

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