Archive for the Federal Reserve Category

The Ultimate Monopolist, The Federal Reserve, Dictates Economic Policy; The Surviving Monopolists Dictate Price And Quality (February 6, 2023)

Posted in Economy, Federal Reserve on February 6, 2023 by

. . .

J          “The Federal Reserve has an almost absolute and certainly unconstitutional monopoly on economic policy in America.  Congress has abandoned its policy and oversight duties and only spends money that does not exist.  America is a command economy with an unelected cabal of buffoons many with a high school mentality sporting ‘piled higher and deeper degrees’ making fundamental decisions about investment, production, distribution and income determination in secret by decree.  The scheme and the scam have not served the public well.  So there you have it.”

. . .

K          “Eighty-nine percent of Americans think we live in a free market economy.  Over the last two decades, I have watched industry after industry after industry after industry after industry after industry taken over by one major player.  Never have as many industries been as monopolized by one major player as they are today.  That results in higher prices, lower quality and fewer innovations.  So there you have it.”

. . .

[See the book “Goliath: The 100-Year War Between Monopoly Power and Democracy” by Matt Stoller and “A tale of two worlds” by Alasdair Macleod in “” dated February 1, 2023.]

[See the e-commentary on monopoly almost a dozen years ago at On Freedom and Liberty (May 24, 2010) and the e-ssay even more years ago reflecting on the greatest institutional threat at Who Is Your Big Bad Bogeyman? (March 26, 2007).]

Bumper stickers of the week:

The bigger the top, the bigger the pop

So there you have it

The Envelope, Please:  Dramedy Of The Year For 2022:  The Federal Funds Fiasco (January 30, 2023)

Posted in Federal Reserve, Interest Rates on January 30, 2023 by

. . .

K          “In a runaway vote, the ‘Federal Funds Fiasco’ show was voted the best new dramedy of the year for 2022.”

J          “The Katzenjammer Kids merge with the Keystone Cops.  And the nightmare was renewed for another season this year.”

. . .

J          “When Powell was up for reappointment, the public saw some visible signs of infighting spill and spew out.  What is clear is that the members of the Federal Reserve itself are using the positions to further enrich themselves to the detriment of the public.  The corruption is cancerous.” 

. . .

K          “Spoiler alert.  Some plot twists are in the works.  The current rate hikes have produced negative effects, yet the real effects – negative and possibly positive – lag by six to nine to twelve months and have yet to manifest.  The calm before the storm.  And because the current price rises are a supply side problem not a monetary phenomenon, the rate increases will do little to slay or even stay inflation.  Real inflation for real folks is and will really remain over at least eight percent throughout this year.  And no one believes that the Fed can raise the rates higher than six percent without breaking the entire economy into shreds and shards.”

J          “Some reality twists are in the works.  The coming recession may slow inflation, yet folks must drive and eat and shelter and live.  They may drive less, but they will continue to eat and shelter and live.”

. . .

J          “Wall Street subsists on and then front runs inside information.  For decades, the conventional wisdom was ‘Don’t fight the Fed’ and roll with the largesse.  The strategy worked even for little folks.  Today, Wall Street is actively running from and resisting what appears to be the settled policy of the Fed.  Two powerful entities running in opposite directions are primed to collide.”    

. . .

J          “Stay tuned.”

K          “The popcorn, por favor.”

. . .

[See “Rural Americans aren’t included in inflation figures – and for them, the cost of living may be rising faster” by Stephan Weiler and Tessa Conroy in “The Conversation” dated January 27, 2023.]

[See the e-commentary discussing inflation in detail and noting almost two years ago that the inflation was and is not “transitory” at Is Inflation Inflating!?!? (April 26, 2021) and assessing the current economic dilemma at The Great Checkmate And The Great Seesaw: Interesting Rates (April 11, 2022).  See also Interning For Clio:  Collecting, Protecting And Preserving The Record (April 4, 2022) and Covid-19 PanICdemic/Plague:  Basically, Back To Basics:  Finding Food; Printing Rutabagas.  Happy Earth Day! (April 20, 2020).] 

Bumper stickers of the week:

WIN  [Wipe Inflation Not So Soon]

Flight the Fed?

2023:  Inexorable and Immanent? (January 2, 2023)

Posted in Economics, Economy, Federal Reserve on January 2, 2023 by

. . .

K          “The Fed is caught between a rock and a hard place.”

J          “The Fed is caught between a hard place and a rock.”

. . .

K          “Uneasy.  Very uneasy.”

J          “Not easy.  Very not easy.”

. . .

K          “The excitement I expected in 2022 looks like it festered and percolated last year.  This year the festering and percolating brew may explode with consequence.”

J          “It could be consequential.”

. . .    

K          “Is this the year?”

J          “They will manage to punt making any big decisions and kick the can down the road and limp the economy along.  They always do.  At least so far.  To date.”

. . .

[See the e-commentary at Twenty Sixteen (January 4, 2016) and The Great Checkmate And The Great Seesaw: Interesting Rates (April 11, 2022).]

Bumper stickers of the week:

Lord, give me coffee to change the things I can change and wine to accept the things I can’t.

Coffee and friends:  A perfect blend.

Wine improves with age.  I improve with wine.

“The Fed will defend the PetroDollar and the world’s reserve currency status no matter how much the stock market crashes, no matter how much the bond market crashes, no matter how much the housing market crashes and no matter how much the economy crashes.” ???  Oh, And Happy Halloween! (October 31, 2022)

Posted in Federal Reserve, Petrodollar on October 31, 2022 by

. . .

K          “That is saying something.  Spooky.”

J          “I’ll say.  Scary.”

. . .

K          “The Federal Funds Rate is being raised more than I ever thought possible.”

J          “The Federal Funds Rate is being raised more than I ever thought possible.”

. . .

K          “Increasing the interest rate will do very little to reduce inflation because real inflation is about double the rate reported by the government.  No one is suggesting that the Fed can raise rates to fifteen percent under any scenario.  If the stock market and bond market are sacrificed, perhaps 30 percent of the population will be impacted.  If the housing market is sacrificed, perhaps 67 percent of the population who own homes and another 9 percent who are now priced out of home ownership will be impacted.”

J          “If the economy is sacrificed, perhaps 100 percent of the population will be impacted. While they are raising interest rates, money is being poured into the economy. Imagine a pump drawing water out of a pool and another pump dumping water into the pool.”

. . .

J          “The PetroDollar is akin to the life blood of the United States body economic.  The stock market, the bond market, the housing market and the economy are akin to the organs.  The periphery is being sacrificed to protect the core.  That is how an organism responds to threat and stress.”

K          “The Federal Reserve is trying to staunch the bleeding.  Without the PetroDollar, the US is not.”

. . .

K          “World War E / World War III is not helping. The US must discipline if not destroy its economic colonies to protect itself.  The UK, Germany, France and other colonies do not realize that they are the target.  The vassals are the victims.  The Euro and the pound sterling must be broken.  They are being and will be broken. And then throw in the currencies of emerging markets that are being creamed.”

J          “The US has to destroy the world village in order to save itself.”    

. . .

K          “The PetroDollar is backed by Fe and Pb not by Au or Ag.  The US military has perpetuated the war against the world since 1945.”

J          “And the Fed is taking up the sword.” 

. . .

J          “We shall see.”

K          “We shall see.”

. . .

[See “Why financial approaches won’t fix the world’s economic problems this time” at Our Finite World dated October 18, 2022 by Gail Tverberg.]

[See recent April e-commentary at The Great Checkmate And The Great Seesaw: Interesting Rates (April 11, 2022), Interning For Clio:  Collecting, Protecting And Preserving The Record (April 4, 2022), Is Inflation Inflating!?!? (April 26, 2021) and Covid-19 PanICdemic/Plague:  Basically, Back To Basics:  Finding Food; Printing Rutabagas.  Happy Earth Day! (April 20, 2020).]

Bumper stickers of the week:

Costco Kirkland precooked bacon is $17.99

You can print money, but you cannot print rutabagas

My electric car is powered by dirty coal

The US has to destroy the world village in order to save itself

“Sheep spend their whole lives living in fear of the wolf only to be eaten by the shepherd.”  Proverb

Housing Collapsing Again.  And Then Again In 2029 (May 23, 2022)

Posted in Federal Reserve, Housing, Interest Rates on May 23, 2022 by

.  .  .

K          “Not again.”

J          “Again.  And then again in 2029.”

.  .  .

K          “Today the interest rate drives about 86 percent of the decision to purchase a house; the Fed dictates interest rates.  The ‘Wealth Effect’ that arises when one’s paper worth rises substantially drives about 13 percent of the decision; the Fed has distorted and inflated the paper worth of assets to stratospheric and unsustainable levels.  The desire by a few astute characters to rebalance their net worth into real estate drives about 1 percent of the decision; the Fed has distorted the relative value of assets and confounded the balancing act.  Those three drivers are decelerating and will soon crash stupendously.”

J          “Carve out about 17 to 23 percent for those folks who were cooped up and want a bigger coop.  Buckets of ‘helicopter money’ were fluttering and floating around without a home in the hands of folks who want a bigger one.  At the Fed’s direction, interest rates are going up, one’s paper worth is going down, and housing may be too large a percentage of one’s net worth.  However, the value of one’s real estate holdings may remain proportionate because the value of one’s paper worth is also declining.  Someone who had a million dollars in assets and a million dollar home may end up with six hundred thousand dollars in assets and a six hundred thousand dollar home.  And be cured of the deceptive and deleterious ‘Wealth Effect’ that often drives one to be less wealthy in the intermediate run.”

.  .  .

K          “Again.”

J          “And again.”

.  .  .

[See the e-commentary at Housing:  Another Bubble Blown By Criminally Low Interest Rates (August 24, 2020) providing a treatise on housing, Housing Again (October 8, 2007) discussing the anatomy of a house, America the Bankrupt: Economics 210 in the Land of the Freeway and the Home of the Wave (January 17, 2005) discussing the “Hyperdive” decline in the economy that is percolating, When the Bubbles Burst (December 4, 2006) discussing the macroeconomic and microeconomic consequences of the housing market collapse when all tools and manipulations finally fail and The Dow Jones (the Murdoch ?) Hits 14 K In A Hollow Economy (July 23, 2007) discussing the decline in the stock market that has been successfully delayed for fifteen years but cannot be avoided forever.]

Bumper sticker of the week:


The Great Checkmate And The Great Seesaw: Interesting Rates (April 11, 2022)

Posted in Federal Reserve, Great Checkmate, Inflation, Interest Rates, Recession, Stagflation on April 11, 2022 by

. . .

K          “I doubt the Fed will be able to increase 150 basis points [1.5%] this year before the economic pain is so great that they will be forced to flood the market with free money for the wealthy and exacerbate the obscene wealth divide.”

J          “200 total basis points [2%].  I’ll go big.  I cannot see them raising rates to a total of 250 or even 225 basis points.  If they also start the ‘quantitative tightening’ at the same time, they will suffocate the markets.”

. . .

J          “Some say we will get ‘deflation’ and others say we will get ‘inflation’ without being specific.  We talked years ago about the deflation of bubble assets and the inflation of necessities that continues to get more distended and pronounced every day.”

K          “As I recall, last April we recognized that inflation was permanent and was not transitory.  The Fed did not shed the word ‘transitory’ until December.”

. . .

K          “The self-inflicted Great Checkmate is inescapable.  They say the bond market is about twice the value of the stock market.  They say the equity market is about fifty trillion dollars.  They say the gross domestic product of the United States is about twenty trillion dollars.  If the Fed raises the Federal Funds Rate to provide a reasonable return to bond holders and to attempt to throttle inflation, then the stock market will fall, the housing market will fold its tent, and the federal government will strain to pay the interest on the national debt.”

J          “The Great Checkmate is the Great Seesaw.  The economy is allowed to teeter and then the economy is allowed to totter.  The next year will be quite a roller coaster ride.  Let’s compare notes at the end of the year.”

. . .

[See the “The Coming Global Financial Revolution: Russia Is Following the American Playbook” in “The Web of Debt” dated April 5, 2022 by Ellen Brown, the recipient of the Third Annual Noble Prize In Eco-nomics (October 8, 2018); consider the discussion of some of the possible changes and consequences of World War E in “The commodity currency revolution” in “Goldmoney” dated April 7, 2022 by Alasdair Macleod.]

[See the e-commentary at Careening Toward A Global Totalitarian Authoritarian Behemoth?  And Then There Is The Fed’s Self-Inflicted Great Checkmate. (January 3, 2022), Third Annual Noble Prize In Eco-nomics (October 8, 2018), Economics And Finance:  Girls v. Boys (June 4, 2018) and Gas / Au / Ag / Cu: The Great Commodity / Currency Wars: What’s Up? What’s Down? What’s Really Up? What’s Going Down? (November 17, 2014).]

Bumper stickers of the week:

Dragon < Eagle > Bruin; Dragon + Bruin > Eagle; Eagle + Bruin > Dragon

Free Assange Journalism is not a crime

“The geopolitical war also distracts attention from the urgent agenda of climate change, especially in light of recent indicators of global warming causing climate experts to be further alarmed.  Other matter of global concern including migration, biodiversity, poverty and apartheid are being again relegated to the back burners of global policy challenge, while the sociopathic game of Armageddon Roulette is being played without taking species wellbeing and survival into account, continuing the lethal recklessness that began the day the bomb was dropped on Hiroshima more than 75 years ago.

In concluding, the question ‘why Ukraine?’ calls for answers.  The standard answer of reverse racism, moral hypocrisy, and Western narrative control is not wrong but significantly incomplete if it does not include the geopolitical war that, while not now directly responsible for Ukrainian suffering, is from other perspectives more dangerous and destructive than that awful traditional war.  This geopolitical war of ‘poor’ choice is now being waged mainly by means of hostile propaganda, but also weapons and supplies while not killing directly outside of Ukraine.

This second war, so rarely identified much less assessed, is irresponsibly menacing the wellbeing of tens of millions of civilians around the world while arms dealers, post-conflict construction companies, and civilian and uniformed militarists exult.  To be provocative, I would say that it is time for the peace movement to make sure that the US loses this geopolitical war!  To win it, even persisting with it, would constitute a grave ‘geopolitical crime.’”  Richard Falk

Careening Toward A Global Totalitarian Authoritarian Behemoth?  And Then There Is The Fed’s Self-Inflicted Great Checkmate (January 3, 2022)

Posted in Covid / Coronavirus, Federal Reserve, Vaccine on January 3, 2022 by

. . .

K          “2021 was worse than 2020.  2022 will be worse than 2021.  2022 may be a year of consequence in the ‘Post-Consequence World’ that imposes no culpability on the culpable and no responsibility on the responsible.”

J          “Not this year.  The system will continue to trudge and trundle along.  No one will be held to account.  Everyone in power is making money fist over hand.”

. . .

K          “With inflation inflating, the Fed’s self-inflicted Great Checkmate cannot be deferred.  If the Fed were stalemated, they could sit tight, but they are in check at this time.  If the fools at the Fed had any sense of etiquette, they would resign before being publicly checkmated or at least be honest with the public.”

J          “The Fed is playing a simple-minded game of checkers in an economy that is not black and red.  They have the one overriding move that can be taken at any time and taken over and over and over again.  They are able to print unlimited dollars.”

. . .

K          “The transition from the Pandemic to the Endemic is a political and an economic challenge, not an epidemiological problem.  However, there is no money in the early treatment and prevention of the Big C-19, so it will not be treated and prevented.  That reality cannot change without much more public awareness and action.” 

J          “One word – Le Vaccine.  The Supremes will provide some guidance on Friday and in the coming week.”

. . .

[See the e-commentary at Twenty Sixteen (January 4, 2016)”.]

Bumper stickers of the week:

A pandemic of the vaccinated.

A pandemic of the unvaccinated.

Ailing, Failing, Wailing And Bailing (September 27, 2021)

Posted in Bail In, Bailout/Bribe, Cryptocurrency, Federal Reserve, Inflation on September 27, 2021 by

. . .

K          “The financial and economic system is insolvent not just illiquid.  That will not endure.”

J          “They can and will continue to print their way down Primrose Lane and kick the debt can down the highway.  If any entity is ailing or failing, it can always start wailing and the Federal Reserve will start bailing.”

. . .

J          “We will know that Bitcoin has arrived when the government bails out the holders of Bitcoin.”

. . .    

K          “These things happen in October.”

J          “Not going to happen.  Perhaps next October.”

K          “You’re probably right.  Let’s compare notes.  On Halloween.  This year.”

. .  .

[See the e-commentary at “Is Inflation Inflating!?!? (April 26, 2021)”, “Covid-19 PanICdemic/Plague:  Basically, Back To Basics:  Finding Food; Printing Rutabagas.  Happy Earth Day! (April 20, 2020)”, “Covid-19: BAU v. BAU (February 24, 2020)”, “Twenty Sixteen (January 4, 2016)” and “They Can Print Money (November 2, 2015)”.]

Bumper sticker of the week:

A system that cannot go on forever will not go on forever

Is Inflation Inflating!?!? (April 26, 2021)

Posted in Deflation, Federal Reserve, Inflation, Interest Rates on April 26, 2021 by

. . .

K          “‘Shadowstats’ by John Williams.”

J          “‘Chapwood Index’ by Ed Butowsky.”

. . .

K          “$8.99 two years ago, $13.99 one year ago and $22.77 one week ago.  If it is available.”

J          “$577 two years ago, $777 one year ago and $929 one week ago.  If it is available.”

. . .

K          “The inflation in what is generically referred to as ‘higher education’ must be analyzed over ten years.  Tuition is tied to increases in schooling loans. The federal government makes more money available at steep interest rates which triggers the universities to raise tuition and hire more superfluous administrators.”

J          “Housing prices are through the roof and only getting worse with the price of lumber and consumer durables rising.”

. . .    

K          “What happens when inflation undermines the real rates of return in the bond market and forces the Federal Reserve to consider raising interest rates?”

J          “Raising the interest rate increases the cost of paying off the national Debt.  Thus, the Fed must raise interest rates and must not raise interest rates.”

. . . 

[See the e-commentary on stealth inflation at “Back Door Inflation (July 16, 2007)”, the dubious numbers advanced by the government at “The Economic Numbers Game (May 5, 2008)”, the underpayment of public benefits based on false and distorted information at “Social (In)Security And The C.P.I. (May 29, 2017)”, the consequences of thwarted supply lines at Covid-19: BAU v. BAU (February 24, 2020) and a treatise on housing at “Housing:  Another Bubble Blown By Criminally Low Interest Rates (August 24, 2020)”.]

Bumper sticker of the week:

Whip Inflation When?  How?

Seeing 20/20 In 2021 (January 4, 2021)

Posted in Covid / Coronavirus, Federal Reserve, Vaccine, Wall Street on January 4, 2021 by

. . .

K          “We did not see 20/20 in 2020.”

J          “We will see 2020 on steroids in 2021.”

. . .

J          “Despite some concerns, I am ready to take the plunge. They can plunge the needle into my body.”

K          “You know my concerns.  First they said there were no adequate, approved and available treatments which was not true because no available treatments were adequately tested let alone approved.  Second they said their concoctions diagnosed, prevented and treated the disease which is also unproven and unfounded speculation.  I am taking care of myself and thus taking care of the entire community.  I will obtain natural immunity without taking or taxing any public or private resources.  We are in this alone.  I am obliging and accommodating to the reality.”

. . .

K          “Over the last more than dozen years, the economic system has been illiquid with those in power responding by giving more free money / liquidity to the major connected players.  At this time, the system is close to insolvent which cannot be solved by giving away even more money to the major connected players.”

J          “We started the year with this conversation four years ago or so.  This year may be the year.  The problem is giving away money is all they know how to do.  They will continue to give away even more money and give away what is left of our future.  I still hope it is a happy new year.”

. . .

[See the e-commentary one year ago today at “Seeing 2020:  Federal Reserve Logic:  QE =/= QE.  Print, Lie, Print, Lie, Print, Lie.  The Great Financial Coup D’état Rages On. (January 6, 2020)” and four years ago at “Twenty Sixteen (January 4, 2016)” and a few mid-summer reflections and premonitions at “Venturing A Few Unfounded And Unwarranted Predictions (July 13, 2015)”.  “Back Door Inflation (July 16, 2007)” is back knocking at the door.  The coming and not at all paradoxical 1) deflation/drop in the price of “bubble baubles / faux assets” (i.e. ETFs and theme parks) and 2) inflation/rise in the price of “real assets” (i.e. grub and farm land) is discussed in “Stagflation?!?  Hands Down Or Hands Up? (January 14, 2019)”.  In response, “They Can Print Money (November 2, 2015)” and they do print money.]

Bumper stickers of the week:

2021 to 2020:  “Watch this.”

2022 to 2021:  “Hold my beer.”

Keep your stick on the ice