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Posts Tagged ‘Quantitative Easing’

The Fed Has Sufficient Tools—to Wreck the Economy | Mises Wire

Posted by M. C. on March 17, 2020

https://mises.org/wire/fed-has-sufficient-tools%E2%80%94-wreck-economy?utm_source=Mises+Institute+Subscriptions&utm_campaign=bafe818a8f-EMAIL_CAMPAIGN_9_21_2018_9_59_COPY_01&utm_medium=email&utm_term=0_8b52b2e1c0-bafe818a8f-228343965

In its emergency announcement on Sunday evening, the Fed assured us that it “is prepared to use its full range of tools to support the flow of credit to households and businesses and thereby promote its maximum employment and price stability goals.” The Fed put its (fiat) money where its mouth is by announcing a host of programs. It cut its target interest rate by 1 percent to zero and reinstituted quantitative easing, pledging to purchase $700 billion worth of Treasury securities and agency mortgage-backed securities over the coming months. This is in addition to $1.5 trillion in temporary overnight and term repurchase operations that it announced two days ago. Separately, the Fed issued a coordinated announcement with a number of other central banks, including the Bank of England, Bank of Japan, and the ECB that the interest rate on dollar swap arrangements would be cut by 0.25 percent and 84-day maturity swap lines would be added to the current seven-day dollar swap lines. In yet another announcement, the Fed slashed the rate at its discount window by 1.5 percent to 0.25 percent and its reserve requirements for all banks and other depository institutions to 0 percent.

In the wake of these announcements, some commentators questioned whether the Fed has run out of “tools” to deal with the impending recession and recovery. Former Fed vice chair Donald Kohn was ambivalent, writing, “They are not out of tools, but they’ve used the biggest tool they have, the interest rate tool, the one that’s been proven over the years to work the most effectively.” Michael O’Rourke, chief market strategist at JonesTrading, took a dimmer view of the Fed’s predicament, declaring:

They blew it. The Fed panicked and the market is spooked. The S&P 500 registered all time highs less than a month ago and the Fed has expended all its conventional and unconventional tools.

Meanwhile policymakers rushed to reassure markets and the public that the Fed had or would obtain the tools they required to keep a panicked economy on an even keel. Secretary of the Treasury Steven Mnuchin indicated that he would request additional tools for the Fed that it was deprived of by Dodd-Frank legislation: “Certain tools were taken away that I am going to go back to Congress and ask for.” And Fed chairman Powell assured reporters that the Fed still has sufficient tools available to shepherd the economy through the COVID-19 crisis and guide its recovery.

But what are these “tools” that have policymakers, financial practitioners, and commentators so worked up? Renewed quantitative easing, the zero interest rate target, 84-day dollar swap lines, special repo facilities at the New York Fed, zero reserve requirements, etc., are nothing but cunning and arcane techniques for conjuring additional trillions of dollars out of thin air and pumping them into the global economy. Since its inception the Fed has always had one and only one tool for manipulating the economy: printing money. And this tool will never dull or break, and can be used again and again under any and all circumstances short of hyperinflation.

The real question is whether this tool will work to mitigate the economic contraction that will inevitably follow the supply-side shock of the COVID-19 epidemic and the deflation of the equity bubble (possibly followed by deflation in other asset markets). Common sense and basic economic theory tell us that the writing up of digital dollar balances will not alleviate the greater scarcity of concrete goods and services goods caused by shuttered factories and commercial establishments and by the lowered productivity of employees forced to work at home. Furthermore, the Austrian theory of the business cycle as illustrated by recent history does not encourage optimism that the imminent deluge of new dollars will encourage a swift and robust recovery from the impending recession. In fact, from 2010 to 2019, the US money supply (M2) increased by 80 percent, from $8.475 trillion to $15.243 trillion, and yet the US economy experienced a painfully protracted recovery from the post–financial crisis recession, followed by historically slow real output growth during the “boom” period despite the fact that asset market bubbles formed. Quarterly real GDP growth fluctuated between 1 and 3 percent during this period, except for five quarters in which it slightly exceeded 3 percent.

Most important, the announced expansionary policy could not be more ill timed. For it is imperative during a contraction of the economy caused by war, natural disaster, or epidemic that the price system be left free and unhampered to reveal the most valuable uses of productive resources whose quantities have been substantially reduced. Only this policy will facilitate the optimal path to a temporarily smaller economy and ensure that the most pressing demands of consumers are met during a period of greater resource scarcity. Unfortunately, the stated intent of the new Fed policy is precisely to stabilize the economy, that is, to prop up and maintain firms, industries, and productive activity as they were in the status quo ante. But this is clearly impossible given the shrunken supplies of the factors of production. By inundating the economy with money the Fed will not succeed in miraculously expanding these supplies but instead will distort the price structure and promote misallocation, malinvestment, and the waste of productive factors, thereby deepening and lengthening the recession.

 

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Yellen's Self-Serving Assessment: Fed Is "Doing Pretty ...

A Fed “tool”

 

 

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Was the Coronavirus Created as Cover for the Imminent Economic Collapse? – LewRockwell

Posted by M. C. on March 12, 2020

I doubt the US government could pull this off in a controlled manner.

I believe it would try. I believe it would screw the whole thing up.

There is little comment I have seen regarding a weapons lab accidental release. That I can believe.

https://www.lewrockwell.com/2020/03/gary-d-barnett/was-the-coronavirus-created-as-cover-for-the-imminent-economic-collapse/

By

A USA Today headline this morning indicated that the Dow was diving as virus concerns counter hope for fiscal steps.

U.S. stocks teetered on the edge of a bear market Wednesday as worries persisted over economies reeling from the coronavirus outbreak.”

“Concerns have grown that a prolonged outbreak may bring on a recession.”

“Goldman Sachs forecast that the longest ever bull market “will soon end” after 11 years.”

“Both the real economy and the financial economy are exhibiting acute signs of stress, analysts at Goldman Sachs said”.

Panic has certainly settled in, and that was no accident. One thing for sure in my mind is that this crisis was created, and not accidental. Regardless of the severity of this so-called virus, in the end, as has happened on multiple occasions before with MERS, SARS, West Nile, swine Flu and others, it is likely that all the wild predictions will once again prove to be overstated or downright false. But the serious economic fallout will remain. The propaganda is being pushed at every level possible, from governments worldwide, to government “health” organizations, to all mainstream media, and from all those that stand to gain from this, including the pharmaceutical companies.

Many have been talking about the markets and economic risks apparent in this country and around the world for a long time. I began sounding alarms before 2008, and since that time have attempted to make aware the fact that from an economic standpoint, the markets and the economy have become much worse, and more suspect ever since. After all the manipulation, the Quantitative Easing (QE), and the continued debt growth, it seemed apparent that a massive economic failure was likely in the future. Is that damning future about to come to fruition? Do the controlling powers that have created this likely economic disaster understand this, and seek to place blame on this new coronavirus outbreak as the cause of all financial ills to come? Was this new coronavirus (COVID-19) purposely created and released so that central bankers, investment bankers, corporate heads, and government puppets could use it as cover for an imminent economic collapse that has become impossible to contain? This in my opinion is a distinct possibility. Political convenience at this level is rarely accidental.

With any financial collapse in the wake of a pandemic, real or not, control over world populations is much easier to implement. Once martial law or medical martial law is in place due to panic, all of society is crippled in the sense that individual liberty and power is lost, economic freedom is restricted, and societal controls such as quarantine become reality. All monetary policy rules will be non-existent, as scrutiny for these tyrannical measures will be lacking during times of extreme strife. In other words, total control of entire populations becomes possible, and without some sort of mass uprising, there is little that any individual can do in situations like these. As James Corbett so rightly said, this panic will cause the cures to be much worse than the disease. But was that the plan all along?

This virus has become a Trojan horse for total population control, but what is the primary objective of those creating this panic? What end game is sought and why? What other factors are guiding these policies, and who stands to benefit? Was this so-called pandemic meant to be a false flag event in order to cover-up a much larger problem? Answers to these questions are not perfectly clear at this point, but given the severity of the panic and mind control of the public, these questions should be asked.

One thing that is certain in my mind is that this virus is purposely being blown out of proportion. Because of this, extreme population control measures have been put into place around the world There is a reason for this maniacal hysteria, and if it has been manufactured as an agenda, as I believe to be the case, that agenda would have to be sinister. It would also indicate that something very dangerous is lurking just behind the curtain, and exposure is not desired. This should not be ignored.

As I write this, world markets are in turmoil, economies are struggling, travel and movement are being more and more restricted, quarantine is rampant, and has reached the U.S. Globalists are gaining strength, and with all this, the stupidity of humans is now exposed for all to see.

Anyone succumbing to the headlines, and especially the predictions, is likely to go insane. There are projections that up to 70% or more will get this dreaded virus, and many millions will die. Quarantine is becoming universal, and getting worse by the moment, and this virus as it is called, will spread wildly around the world with no possibility that any can escape the risk. As of today even with this much hype, there has been outside of China, only 1,417 deaths reported worldwide due to COVID-19. All this while according to U.S. News, the CDC reported as of February 21, that 26 million Americans have fallen ill with flu-like sickness just this flu season so far, 250,000 have been hospitalized, and at least 14,000 have died. Given this comparison, is it not obvious that government deception is more than evident?

Fear is dictating the behavior of the masses, and this looks to be a planned outcome. Entire populations are allowing themselves to be manipulated. People are accepting quarantine, medical martial law, and all other forms of medical dictates. Many are being harmed by the horrible economic ramifications of this madness, and families are being torn apart.

It is time to fight back, and to find the real cause of this manufactured panic. This panic is desired by those at the top, so what is the real agenda here? Why is this happening, and what is being hidden from view? I believe there is a connection between this faltering economy and this most likely false pandemic. That connection seems clear, and the timing is very suspicious. There is massive deceit and lies are ever present, but the worst is yet to come. As the Federal Reserve pumps $175 billion more today into the banking system, can any not connect the dots? Is the end of our financial system now in sight?

Today the WHO just declared the coronavirus a global pandemic, and all hell is about to break loose. In this environment, natural freedom will become a faded memory.

Be seeing you

 

 

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Doug Casey on What the International Ruling Class Have Planned for You

Posted by M. C. on February 1, 2020

Davos people see the common man as the real problem.

And leading the charge is Davos attendee Greta Thunberg. She’s emblematic of how thoroughly degraded this has become. Greta is a manufactured celebrity. She came out of nowhere last year; massive but completely undeserved media attention made her into one of the planet’s most famous people. It’s not just laughable, but amazing, that a high school sophomore—with no knowledge or experience—has become a world opinion leader.

https://internationalman.com/articles/doug-casey-on-what-the-international-ruling-class-have-planned-for-you/

by Doug Casey

International Man: No matter the problem, the prescription of the Davos crowd is always more welfare, more warfare, more money printing, more taxes, and of course, more centralization of power into global institutions.

What’s your take?

Doug Casey: The people who attend Davos are all welfare statists. They’re not necessarily socialists, insofar as they don’t want to see government nationalize industries. Most understand how totally dysfunctional that is and that they don’t really benefit from it. Strict socialism, defined as State ownership of the means of production, is off the table. They prefer economic fascism, where a powerful State can funnel wealth to the corporations the elite own or control. They’re happy to throw some table scraps to the unwashed masses, of course. Modern Monetary Theory (MMT) is the best way to do that.

Again, they’re not socialists. They’re welfare statists. Completely opportunistic and absolutely unprincipled. Despicable people, actually. Few are entrepreneurial, independent thinkers or free-market oriented. Those types would be disruptive at Davos, and if they’re ever invited, it would be only once.

Other than celebrities, court intellectuals, and publicity-oriented multibillionaires, the attendees are almost all bureaucrats and politicians who thrive on stolen money. But it’s no longer easily visible briefcases full of cash. That’s quaint in today’s world. They steal indirectly, by making sure they benefit from state regulations, state favors, and the inflation of the currency.

Bribes are in the form of tax-deducible donations to charitable foundations and nongovernmental organizations (NGOs). That’s not only much safer, but the money is vastly bigger, and the way it’s rigged adds to their prestige. Both making and taking a bribe disguises the miscreants as philanthropists and do-gooders when they use an NGO as a funnel.

But getting back to their economic views, they’re all for “quantitative easing.” Printing money—MMT—directly benefits the stock market. It raises corporate earnings, and much of the newly created cash directly boosts the prices of shares. It’s really sweet, if you’re an insider.

International Man: At this year’s event, climate change appears to be a big focus.

What are your thoughts on this?

Doug Casey: These fools love to talk about global warming, which they attribute to carbon dioxide. Their jets and limos are a small price to pay for the invaluable moral hectoring they give to the billions of hoi polloi.

Davos people see the common man as the real problem. And perversely, the common man believes what he’s told in the media—namely, that he is the problem. Pseudo science has become a new religion. It’s become a moral crusade against carbon, the one element that’s basic to all life; it’s now more hated than uranium, plutonium, or gold. Carbon is being pursued by a lynch mob of angry chimpanzees.

And leading the charge is Davos attendee Greta Thunberg. She’s emblematic of how thoroughly degraded this has become. Greta is a manufactured celebrity. She came out of nowhere last year; massive but completely undeserved media attention made her into one of the planet’s most famous people. It’s not just laughable, but amazing, that a high school sophomore—with no knowledge or experience—has become a world opinion leader. You may have heard her famous deranged rant, but just in case, here it is.

She has absolutely nothing going for her but things like anger, resentment, hatred, and fanaticism. No matter. The Masters of the Universe sit there as she scolds them for their evil in destroying the world and ruining her youth.

The silly little bitch is a frothing-at-the-mouth fanatic and suffers from several really severe psychological aberrations. She is to the world what Alexandria Ocasio-Cortez is to the United States. She will undoubtedly go into some multi-billion dollar NGO, where she can do a maximum of damage.

People value urgency, sincerity, and passion. Like Hitler, Mussolini, Lenin, Castro, and the like, she’s got plenty. And nobody dares say a word about it, because she’s been granted the moral high ground. This augurs very poorly for the future.

Probably the only intelligent words spoken at Davos this year came from Donald Trump, of all people, when he decried “prophets of doom,” referring to the global warming crowd.

Climate change has been around for about four billion years. And the biggest driver of it, by far, is the sun. Not carbon dioxide, a trace gas. There’s 20 times more argon, in the atmosphere. Without the sun, earth would be a ball frozen at about two degrees above absolute zero. Not counting the effects of cosmic rays, the planet’s changes in orbit and tilt, the solar system’s rotation around the galaxy, and a score of other critical factors. But these people don’t talk about that, because those things are totally and obviously beyond our control. Best to stick with carbon, which is proving helpful in controlling the masses.

International Man: Given the disastrous policies the Davos crowd has in the pipeline, what should the average person do?

Doug Casey: Treat these people with the respect they deserve—which is to say, treat them like drunks discussing the weather at a cocktail party. Davos is just a social gathering for people who have a busybody streak. It would be completely unimportant except for the fact the media says it’s important.

The only thing that surprises me about Davos is that the hustler who runs it hasn’t yet invited the Kardashians.

Editor’s Note: There’s no question the elite are eager to promote policies like negative interest rates, the abolition of cash, and mass migration. These trends are in motion, and are accelerating at a rapid rate.

It’s all shaping up to be a world-class disaster…

Be seeing you

Greta Thunberg Scolds Davos: Climate Demands 'Completely ...

 

 

 

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What a Nobel Peace Prize, the Federal Reserve, and endless war have in common | The Daily Bell

Posted by M. C. on August 22, 2019

War funding is the main reason the government needs this hidden tax power.

With the help of the Federal Reserve, about $8 trillion of the $22 trillion national debt was spent on the wars in the middle east since 2001.

https://www.thedailybell.com/all-articles/news-analysis/what-a-nobel-peace-prize-the-federal-reserve-and-endless-war-have-in-common/

By Joe Jarvis

It was ten years ago that Congressman Ron Paul released his book, End the Fed.

It immediately shot to number six on the New York Times Bestsellers list.

Paul’s message was that the Federal Reserve was created to bail out banks. It privatized profits for them and socialized losses for the rest of us.

He said the system works against us by killing competition among banks and hiding taxes through inflation.

He’s right. The Federal Reserve can create money out of thin air, and lend it to the government to spend. But increasing the supply of money– when it’s not backed by anything– leads to inflation.

That’s because there are more dollars chasing the same amount of goods in the economy. So every dollar is worth less.

But the government benefits from the value stolen from each existing dollar… because it makes each dollar of government debt worth less in the future. Therefore inflation is just a hidden tax.

War funding is the main reason the government needs this hidden tax power.

In 2009, nominations for the Nobel Peace Prize closed just 11 days after President Obama took office.

Later that year, The Nobel Committee selected Obama to receive the Nobel Peace Prize.

Somehow, they knew that Obama– the new Commander-in-Chief of a nation embroiled in two wars– was truly a peaceful man.

At the same time, the Federal Reserve went to work on “quantitative easing”– a.k.a printing money. Ostensibly to save the country from a recession, the Fed conjured up trillions of new dollars.

But as you know, the wars continued…then they expanded.

The US gave air support to Libyan rebels in 2011, ousting Ghadaffi. Ghadaffi was no angel, but at least the country was stable under his regime. Today Libya is lawless and serves as a breeding ground for terrorism. Open public slave-markets have returned to Libya after being virtually non-existent during Ghadaffi’s four-decade rule.

The same year, America’s Nobel-peace-prize-winning President escalated drone bombings in Yemen which continue to this day, causing countless civilian casualties.

And then the US started bombing Syria, siding with rebels in the fight against Bashir al-Assad. Again, not a great guy. Yet the opposition forces, which the US funneled weapons to, included ISIS…

By 2015, Obama had sent in US ground forces to stop ISIS from gaining a foothold in the country which the US destabilized.

With the help of the Federal Reserve, about $8 trillion of the $22 trillion national debt was spent on the wars in the middle east since 2001.

But it hasn’t helped.

Today, the US is still bombing Yemen, is still at war with Afghanistan, still has troops in Iraq and in Syria, where the civil war continues.

And now you can hear the war drums beating once again, this time for Iran.

The wars have not ended, and neither has the Fed.

Today, the same banks that got us into the 2008-2009 recession exist, because the Federal Reserve helped bail them out.

They engage in the same behavior that got us into the last recession– essentially betting customers’ deposits on toxic investments, without enough reserves to back even a fraction of the potential catastrophic losses.

The US isn’t going to voluntarily end the Fed any more than it will pull out of all its wars and overseas interventions.

But the inflation needed for the war (and created by the Fed) threatens both the perpetual warfare system and the Federal Reserve…

Be seeing you

Commodity Money | Pronk Palisades

 

 

 

 

 

 

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(Undeclared) Martial Law in Boston and You Are Still Not Worried?

Posted by M. C. on July 6, 2013

Washington knows collapse is coming even if the sheeple and low information types don’t. Indeed, this is what is expected under the Cloward-Pivin strategy developed at Barry Obama’s alma mater Columbia. The ammo purchases, foreign and domestic troop training on public streets and domestic phone snooping is all about beltway survival and control.

The FEMA camps are sprouting up all over the country. Washington says they will be a safe place to go in a disaster…even though the razor wire is mounted to keep people in not out.

The DHS and various other agencies like the IRS are buying billions of rounds of ammo. I thought the army was supposed to protect us from invaders. The hollow points are not destined for invaders.

Canadian and Russian troops are being trained here for domestic riot control.

Martial under Russian troops. Read the rest of this entry »

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Quantitative Easing and the Market, Does Anyone Know What is Going On?

Posted by M. C. on June 23, 2013

Bernanke says the Fed will stop buying bonds (ie slowing the printing presses) and the market bails.  What does this mean?

My first thought is that Wall Street has no confidence in near future economic recovery.  For sure there is great dependence in government safety nets and bailouts.  All at the expense of the taxpayer.  Make no mistake fiat money is a tax.  Inflation lowers the value of what little money we have, in essence taking buying power away.

As I recall free government money was the major cause of the housing crisis. Read the rest of this entry »

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Free Money

Posted by M. C. on October 21, 2012

A recent letter commented on Romney’s tax (Romney’s Plan Doesn’t Add Up) plan in Sunday’s Erie Times. The writer says it doesn’t add up. He is right. No one’s does. He says lowering taxes won’t cut the deficit. Right again if you assume the economy won’t take a jump as it did after the Bush II cuts. It is apparent to me that government has grown into a monster. Read the rest of this entry »

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