One of the primary reasons why the Federal Reserve has become so powerful in the last two decades is because the Legislative and the Executive Branches of government have passed the buck of fiscal responsibility over to the hands of the central banks. In fact, following the taxpayer funded bailout known TARP, the long-time Senator from New York publicly told the central bank it was their time to 'get to work'.Read More
A few months ago, the largest public and private pension funds announced that they were so underfunded that they would have to begin cutting benefits, or in the case of Central State Pension Fund, even cut payments to retirees altogether. But this now appears to be just the start of a worldwide pension collapse thanks mostly to the actions of global central banks in their decisions to pick a few winners to the detriment of everyone else.Read More
After a subsidiary of the Chinese state purchased the J.P. Morgan HQ building directly across and connected to the New York Federal Reserve a few years ago, it was rumored that China not only held a large stake in the bank itself, but are also now a partial shareholder with ties directly to America's central bank.Read More
What a tangled web we weave, when we first practice to deceive... this is the inevitable legacy of the institution known as the Federal Reserve. And like all things built upon lies and fraud, eventually that foundation falls apart when the winds blow around it with significant strength.Back in September of this year, the Fed surprised most of Wall Street when they chose not to raise rates despite the popular notion that unemployment had fully recovered, and where inflation was harnessed at below 2%. And like Bernanke/Yellen's clone over at the ECB, who spoke on a specific monetary policy for more than two years before it was finally enacted, the U.S. central bank is as well an impotent creature that relies upon propaganda much more than it does action because it has reached a point where they have no idea what they are doing.
But following this September rope-a-dope on interest rates, the puppets at the Fed almost instantaneously began chattering that in December they would absolutely raise the rates that they seemed unable to do despite their own rhetoric and manipulated data. And once again, Wall Street lapped it up to now an estimated 71% of analysts believe that the Fed will finally follow through and move the counter skyward.
So if everything in the eyes of the central bank are beautiful, and the stock markets are back to the levels they were prior to the August pullbacks, what could possibly cause the Fed to announce on Nov. 20 that they are calling for an emergency closed door meeting just a few weeks from their next FOMC?
It is anticipated that the closed meeting of the Board of Governors of the Federal Reserve System at 11:30 AM on Monday, November 23, 2015, will be held under expedited procedures, as set forth in section 26lb.7 of the Board's Rules Regarding Public Observation of Meetings, at the Board's offices at 20th Street and C Streets, N.W., Washington, D.C. The following items of official Board business are tentatively scheduled to be considered at that meeting.
Meeting Date: Monday, November 23, 2015
1.Review and determination by the Board of Governors of the advance and discount rates to be charged by the Federal Reserve Banks.
A final announcement of matters considered under expedited procedures will be available in the Board's Freedom of Information and Public Affairs Offices and on the Board's Web site following the closed meeting. - Federal Reserve
An emergency meeting outside the regular FOMC to discuss the raising of rates? What could possibly be so dire that it requires an even greater amount of cloak and dagger, especially when the Fed's Vice-Chairman Stanley Fischer came out just two days ago and said, FED HAS DONE EVERYTHING IT CAN TO AVOID SURPRISING THEMARKET?
The fact of the matter remains, the economies in the U.S., Europe, and Japan are in recession, and are deteriorating fast. Retail sales are so dire this holiday season that businesses are starting their Black Friday specials two weeks in advance of November 27, and this was coupled with home sales falling off a cliff earlier this week, validating that the consumer is completely tapped out.
What is coming in December appears to be something much greater than simply an announcement to 'raise interest rates', and may be just the opposite, especially after Yellen sent up the trial balloons earlier this month of the potentiality of negative rates. And this leaves everyone who is outside the cabal to have to face some very disturbing choices because if the Fed sees something that they have kept hidden from the public regarding the dollar, the economy, or the paper markets in general, then those who have their money and wealth inside the banking and paper systems better be prepared for a reaction that is beyond anything we have seen in 90 years, and could be the start of a new monetary policy that makes the TARP bailouts from seven years ago just a drop in the ocean.
Raising interest rates? That's so last September. Instead mainstream economists are leaking new prognostications that signal the Fed is quickly adjusting their programs to instead focus on their next round of Quantitative Easing.However, one of the biggest factors holding back the central bank's plans for final annihilation of the dollar and the economy is the fact that after they failed to raise interest rates last month, the Fed's credibility is coming into extreme question. And should the global leader in monetary policy choose to shift gears and scare the markets with more money printing after years of lying on how much the economy was in recovery, it must first ensure that the American people won't rebel, and by this I mean take their consumer ball and go home.
Which brings us to an even more interesting trend that is taking place among mainstream financiers, and that is the elimination or banning of cash.
When economic conditions worsen, they react by reducing interest rates in order to stimulate the economy. But, as has happened across the world in recent years, there comes a point where those central banks run out of room to cut — they can bring interest rates to zero, but reducing them further below that is fraught with problems, the biggest of which is cash in the economy.
In a new piece, Citi's Willem Buiter looks at this problem, which is known as the effective lower bound (ELB) on nominal interest rates.
Fundamentally, the ELB problem comes down to cash. According to Buiter, the ELB only exists at all due to the existence of cash, which is a bearer instrument that pays zero nominal rates. Why have your money on deposit at a negative rate that reduces your wealth when you can have it in cash and suffer no reduction?
Cash therefore gives people an easy and effective way of avoiding negative nominal rates.
Buiter's note suggests three ways to address this problem:
- Abolish currency.
- Tax currency.
- Remove the fixed exchange rate between currency and central bank reserves/deposits.
Yes, Buiter's solution to cash's ability to allow people to avoid negative deposit rates is to abolish cash altogether. (Note that he's far from being the first to float this idea. Ken Rogoff has given his endorsement to the idea as well, as have others.) - Bloomberg
But the problem today is, even banning cash is no longer a viable solution. If consumers and depositors have access to their money in some form or fashion, then transitioning that digital currency into a hard asset will negate the bank's purpose in eliminating cash altogether. So to accommodate this in a fully functional scheme, one other piece of the American system must be eliminated.
The reasons behind the concepts of banning cash and banning capital markets is due to the fact that people, both savers and consumers, don’t always participate in markets as central banks and governments desire them to. After 9/11, the very first thing that President George W. Bush asked Americans to do was to go out and keep spending, because it is usually during crises and traumatic events that people pull back from un-necessary spending and instead save their money in case the crisis remains active.
Since 2008, quantitative easing and zero interest rate policies were intended to allow consumers to borrow like there was no tomorrow, and to keep buying the goods the corporate world wanted them to. But as jobs, wages, and price inflation became real road blocks for Americans to follow these desired policies of the establishment, the banks are coming to feel that they may have no choice but to take decision making completely out of the hands of the people, and implement a completely fascist economy where not only is production controlled by the state, but what consumers can and may buy with the money they are allowed to earn is as well. - To the Death Media
That's right, the answer the central banks are moving towards is a fully functional form of Fascism, where not only are the means of production controlled by either corporations or the state, but what consumers and depositors are allowed to do with their money as is controlled by them as well.
Make no mistake, with the soon to be passage of TPP on the horizon, the handing over of the legal mechanisms of the economy are now fully in the hands of the banks and multi-national corporations. And since the regulators will now be working for these two private entities, it will only be a matter of time before all money earned, controlled, or saved in the hands of the populace will be relegated under the dominion of corporate powers, and anything tied to the dollar or globally accepted fiat currencies will be seen as chips from a casino, which are only good for playing on their tables and are otherwise worthless when taken outside the confines of their 'house'.
There is an old saying in society that goes, if you can't beat them, join them. But an even greater axiom takes that adage and expands it to become, if you can't beat them, join them, and then take them over.It is this expanded axiom that is quickly being manifest in the banking industry as after three years of trying to destroy the concepts of bitcoin and crypto-currencies, the blockchain technology that underlies these alternative forms of money is being seriously looked at as a means to bring all money under one digital roof, and help usher in absolute control which the New World Order advocates have sought since the days of the discovery of the New World.
In a speech given last week by Andrew Haldane, who is a Bank of England economist, the analyst spoke on the faltering monetary system that is based on central bank control over cash and other monetary policies tied to physical money, and suggested that the success of Bitcoin as a digital currency via the blockchain is something that could be used to not only fully integrate the global financial system, but also allow central banks infinite power to regulate the value of money through interest rates tied directly to a digital currency.
In a talk given at the Portadown Chamber of Commerce in Northern Ireland on September 18, Andrew G Haldane, Chief Economist at the Bank of England (BoE), has hinted at the possibility that the U.K. government might issue a digital currency. Though the disclaimer “The views are not necessarily those of the Bank of England or the Monetary Policy Committee” ensures plausible deniability, Haldane’s talk seems to indicate that the BoE is at least seriously considering the possibility.
Haldane focuses on the inability of central banks to set negative interest rates to stimulate economic growth, which hinders the effectiveness of monetary policy and is known as the Zero Lower Bound (ZLB) problem.
“A central bank cannot reduce nominal interest rates below zero,” explained a 2014IMF working paper cited by Haldane. “This constraint arises from the existence of an asset, cash, with a guaranteed return of zero. A negative interest rate would mean that someone lends $100 and receives less than $100 in the future. Such a loan would never occur, because the lender could do better by putting cash in a safe deposit box.”
Therefore, Haldane suggests looking for technological means for implementing a negative interest rate on physical currency. More than a century ago, German economist Silvio Gesell proposed a stamp tax on currency to generate a negative interest rate. Modern variants of the stamp tax on currency have been proposed – for example, by randomly invalidating banknotes by serial number.
Another possibility is to abolish paper currency, which would also represent a way to fight criminal activities that rely on cash exchange.
Yet another possibility would be to issue government-backed currency in an electronic rather than paper form.
Interesting to note that both bankers and government officials ALWAYS tie their tracking of money to assumed criminal activities by common citizens, and never in regards of their own fraudulent and criminals schemes because doing so is would result in the destruction of confidence in both money, and their own policies.
The real purpose behind Bitcoin and Blockchain technology was to create a DE-CENTRALIZED system by which people could conduct commerce in a currency that was outside the control of banks, and government agencies. But when the former Metals Chief (manipulator) for J.P. Morgan Chase left the bank early last year, many thought she was being used as a scapegoat for several of the dozen or so frauds and crimes that J.P. Morgan was fined for over the past five years. However, with her creation of a new Blockchain technology company called Digital Asset Holdings, it appears now that she was directed by someone within the elite to harness the power of blockchain technology and see how it could be integrated into the formation of a complete digital monetary system that would be compatible with every bank, and eventually lead to a singular global digital currency.
Blythe Masters is talking her book in a cover story for Bloomberg’s magazine. She’s CEO of Digital Asset Holdings, a New York tech start-up she’s promoting blockchain, the digital ledger software code that powers bitcoin. Masters says the software will enable banks, investors, and other market players to use blockchain technology to change the way they trade loans, bonds, and other assets. The report says Masters is a “financial engineer” who helped create the credit-default swap market, which peaked at $58 trillion, in notional terms, in 2007 but was blamed by many for exacerbating the damage done by the subprime mortgage crash in 2008.
Not everyone’s a fan of the development. Jon Matonis, a founding director of the Bitcoin Foundation, a Washington group that promotes the cryptocurrency, told Bloomberg a private blockchain run by banks could end up as just “another cartel” and function as poorly as the payments consortium. Masters was also recently named chairman of Santander Consumer USA Holdings SC, -0.93% , the subprime auto lender controlled by Spain’s Banco Santander that faces scrutiny by U.S. regulators.
People continually ask economists and other analysts for exact dates for when the next crisis or paradigm shift will take place, but this is not what economists do. Instead it is our job to read the signposts and attempt to put together all the pieces of a puzzle so that investors, businesses, and even Joe Six Pack can take this information and make decisions and choices to protect themselves from what is coming, and what the future might look like. And with multiple banking cartel agents a this very moment in time calling for an end to cash, and a move towards a completely digital currency that the central banks can not only better use their monetary policies of QE and interest rate manipulations on, but as a result help remove one of the most important freedoms to mankind out of the hands of the people, and be able to control every aspect of your lives through the absolute control of money.
25 bps. That was how small the proposed and forecasted rate hike was supposed to be last Thursday. Yet when the Federal Reserve chose to keep interest rates where they were, it signaled something much greater and much more terrifying... the beginning of the end of the current system is now commencing.Now, many will of course respond with thoughts that this statement is just more hyperbole, and economic doom porn, but with the rest of the world already in a deflationary recession, and under the auspices of a currency war that has gone on for at least four years, the stability of the global financial system is too far gone to ever see a change to central bank policies that are willing to use Quantitative Easing to prop up every asset in nearly every market for eternity.
Bank of Japan: New round of QE scheduled for October
Last night on CNBC, talk has already begun for Japan to institute a new round of QE that will be scheduled for October in another attempt to stimulate inflation under Abenomics. However, since the BOJ has already purchased close to 70% of their entire stock market, and nearly every bond available at the cost of hundreds of trillions of Yen, this measure will not only have a hard time finding new assets to buy, but will inevitably bring about the trigger that finally destroys what is left of their economy.
Even Domestic U.S. banks know the end of the dollar is coming
Major banks in the West are not stupid... they may be utterly corrupt, but they nearly always have a contingency plan to protect themselves from catastrophic events. And whether its through the owning of politicians and regulators, the backstopping of their risk onto the taxpayers, or as we have seen in just the past few months, the accumulation of physical metals after years of keeping down spot prices, banks, like the market, are forward looking in their actions.
Back in August we began to see major banks like Goldman Sachs and HSBC purchase a combined 7.1tons of gold, while at the same time J.P. Morgan was buying millions of ounces of silver. And because of this drain we are now seeing paper contracts outnumber physical inventories by more than 250:1.
The reasons are simple for banks who have used their sycophants in the media to downplay gold and silver as relics and even 'pet rocks' while covertly accumulating every single possible ounce they can get their hands on. The dollar is soon to disappear and the world is returning to a state where those who have the gold will reign in the new system.
Bank of England calls for negative rates, and an end to cash
Just one day after the Fed announced no change to ZIRP, the Bank of England came out and doubled down on this move by calling for negative interest rates and a proposal to end cash in the economy. This was not some knee jerk reaction by the BOE to the U.S. central bank's decision to do nothing, but a calculated move that could only have been planned with considerations made from the Fed, and with the Brits already knowing what the Fed's policy was going to be.
Australia and ECB call for Helicopter money printing
Britain was not alone in being quick to call for more of the same, and in much greater quantities. On the same day the BOE was dropping hints of negative interest rates, both Australia and the ECB began talking about new Quantitative Easing programs that would dwarf what has already been done in most Western economies, and could even include pumping liquidity directly into the general economy.
There is not a single central bank that is not manipulating their currency, or printing vast sums of fiat money in an attempt to delay and stave off what is coming to the global financial system. And as we have talked about in the past, five years of unsterilized debt pumped into the machine has long reached the point of diminishing returns, with estimates of 14 new dollars of printed money being required to create just 1 dollar of GDP growth.
They say that insanity is doing the same things over and over and expecting a different result, and if that is the case, then those who run the global banking system are the most psychopathic and insane men and women the world has ever seen. Yet for all they are doing to make things worse by increasing QE and lowering interest rates to the point where no one should keep any cash in a bank, behind the scenes they have accepted the fact that the jig is up, and are simply keeping up the facade of monetary policy to the public knowing that this is the end game, and most people aren't going to survive it.
Last week, CNBC tried to milk the most out of an interview between Steve L(ies)man and Federal Reserve Vice-Chairman Stanley Fischer, and sure enough, the 15 minute segment caused the algo's to soar, and stocks on all three indices to move into the green. But when you actually look at what Fischer said about the potential raising of interest rates in September, it was absolutely nothing different than what has been said by all Fed officials going back to October of last year.
In the chart if you look at the first dip, you can see several times where the markets rose in spurts, and ironically, they occurred each time they re-ran the interview on Friday.
Stanley Fischer is considered by the mainstream to be the 'most reasonable' of the Fed heads, but in reality he is simply a tool for the elite. In fact, David Stockman wrote this today after watching the escapades of the American-Israeli citizen, and former Chairman of Israel's central bank.
With every passing week that money markets rates remain pinned to the zero bound by the Fed, the magnitude of the financial catastrophe hurtling toward main street America intensifies. That’s because 80 months—– and counting—–of zero interest rates are fueling the most stupendous gambling frenzy that Wall Street has ever witnessed or even imagined. Sooner or later, therefore, this mother of all financial bubbles will splatter, bringing untold harm to millions of households which have been lured back into the casino.
Accordingly, after 80 months of showering Wall Street with what is a wholly unnatural and perverse financial windfall—-that is, zero cost in the money market—–the Fed has ignited a rip-roaring inflation. But the inflation is in the financial market, not the supermarket.
Needless to say, there was not even a faint trace of recognition of this fundamental reality in Stanley Fischer’s much heralded Jackson Hole speech on inflation. As usual, it was an empty bag of quasi-academic wind about utterly irrelevant short-term twitches in various inadequate measures of consumer inflation published by the Washington statistical mills. Indeed, Fischer went so far as to acknowledge that one of the more plausible consumer prices indices—–the Dallas Fed’s “trimmed mean” measure of the PCE deflator—–was up 1.6% in the past year.
Here’s the thing. No one except the modern equivalent of medieval theologians counting angels on the head of a pin could think that the difference between this reading and the Fed’s arbitrary 2.0% inflation target is of significance to any economic actor in the real world. - David Stockman's Contra Corner
But alas, Stanley Fischer is not the only idiot clown controlling the world's financial spigot and monetary policy. For nearly a year Janet Yellen has played her best imitation of Mario Draghi, and jawboned over and over how great the economy is, how great unemployment numbers are, and how deflation is killing asset prices.
And with hedge funds, stock investors, and the entire Western financial world in fact waiting for some small bit of guidance from the Fed, it is unlikely that it will come anytime soon. Just ask several financial reporters who no longer believe a single word from the world's primary central bank.
Now comes one of the world’s top monetary reporters, Ylan Q. Mui, to make a delicate observation at the Washington Post’s Wonkblog, in Why nobody believes the Federal Reserve’s forecasts. Mui:
“The market recognizes that the Fed has repeatedly erred on the optimistic side,” said Eric Lascelles, chief economist at RBC Global Asset Management. “Fool me 50 times, but not 51 times.”
Even the government’s official budget forecasters are dubious of the Fed’s own forecast.
This is a theme that Mui has touched on before. In 2013, she wrote Is the Fed’s crystal ball rose-colored?:
The big question is whether Fed officials can get it right after years in which they have regularly predicted a stronger economy than the one that materialized. In January 2011, Fed officials predicted that GDP would grow around 3.7 percent that year. It clocked in at 2 percent. In January 2012, they anticipated growth of about 2.5 percent. We ended up with 1.6 percent.
To give Ms. Mui’s competition its due, Dr. Richard Rahn at the Washington Times last April crisply noted:
The Federal Reserve had forecast the U.S. economy to grow about 4 percent near the beginning of each year for the last five years. But during each year, the Fed was forced to reduce its forecast until it got to the actual number of approximately 2 percent. (Other government agencies have been making equally bad forecasts.) These mammoth errors clearly show that the forecast models the official agencies use are mis-specified and contain incorrect assumptions. - Forbes
The reason I point this out is because right now, the Fed, mainstream media, and even politicians are trying to put the recent stock market declines on China, and their economic slowdowns and equity crashes.
But China does not control global monetary policy... the United States does through the reserve currency and the petro-dollar. And since they couldn't blame the real culprits (themselves) when dollar policy back in 2009 led to global commodities being too high for many Arab countries and resulted in massive protests and even revolutions, blaming a country like China, who's currency floats far less than even the Euro or Yen, as the catalyst for the ongoing breakdowns proves that either the Fed is no longer in control, or is working extremely hard to deceive the public and Wall Street that they do not know what they are doing.
Watching events unfold around the world is important, including ANOTHER chemical warehouse explosion that took place just today in mainland China because these events are being orchestrated by intelligence services attempting to keep the world's eyes off the real instigator of the coming collapse, and to try to create a war or conflict to pacify the citizens who are growing more and more fearful as the Autumn comes upon us. But make no mistake, it is not China, nor oil prices, nor Ukraine and Yemen that are at the heart of what is coming, and instead keep the focus on the Federal Reserve, because their actions in the coming weeks will decide just how long, and just how difficult the next global collapse will be. Because if we learned anything from last Friday, the markets and the algo's are tied intrinsically to what comes out of the mouth of the most ignorant people on the planet.