At a certain point in the economics of the great pretending cycle, one must wonder what circles they live in.
Fed Chair Jerome Powell announced another quarter-point interest rate hike and simultaneously noted the banking crisis will likely lead to tighter credit and borrowing for businesses on Main Street…. thereby further reducing the U.S. economic output. Yet here we are again, and not a single economic or financial pundit is even talking about the origin of the inflation the Fed action is pretending to address, the spike in energy prices.
At the core of the Biden policy issue that creates inflation, is the energy policy that has driven oil, gas, home heating, electricity and manufacturing/farming costs through the roof. The blocking of energy resource development/production is the top issue leading to massive increases in consumer prices overall. The Biden energy policy is entirely ignored by a federal reserve attempting to shrink inflation.
Follow the bouncing ball of consequence.
Biden restricts energy development [Main St Suffers]. Prices skyrocket [Main St Suffers]. The fed raises interest rates in an effort to reduce the economic activity to meet the lowered production of energy resource development [Main St Suffers]. The result of the interest rate hike creates liquidity issues for banks holding treasury securities [Main St Suffers]. The banks then reduce credit lines, reduce lending and tighten borrowing to match their lowered liquidity [Main St Suffers].
The Fed then notes further increases in rates may pause as they await the outcome of restricted banking credit and lending from the rate hikes previously installed. Nowhere in any of this is anyone talking about the nucleus of the issue – the stupid energy policy. The great pretending continues in the West, while smiling panda lunches with Vladimir Putin.
[Transcript] – “At today’s meeting, the committee raised the target range for the federal-funds rate by a quarter percentage point, bringing the target range to 4.75 to 5 percent, and we are continuing the process of significantly reducing our securities holdings. Since our previous FOMC meeting, economic indicators have generally come in stronger than expected, demonstrating greater momentum in economic activity and inflation.
We believe, however, that events in the banking system over the past two weeks are likely to result in tighter credit conditions for households and businesses, which would in turn affect economic outcomes. It is too soon to determine the extent of these effects, and therefore too soon to tell how monetary policy should respond.
As a result, we no longer state that we anticipate that ongoing rate increases will be appropriate to quell inflation; instead, we now anticipate that some additional policy firming may be appropriate. We will closely monitor incoming data and carefully assess the actual and expected effects of tighter credit conditions on economic activity, the labor market, and inflation, and our policy decisions will reflect that assessment. (read more)
We are in an abusive relationship with our government.
After 2008 crash I got interested in money/banking etc.
Most of my learning came from Zero Hedge website.
I was stunned at my ignorance of the how the system worked and how corrupt it was.
I started dumping cash(constantly devaluing asset) and bought gold, silver, oil and land.
The Rothschilds Banking Empire is corrupt and owns govs and media and the whole world is a slave to its paper money.
Yes, that’s the truth–they own all governments and the media–they have captured the world with debt slavery.
I actually woke up to all of this from former Congressman Dr. Ron Paul. Then I watched Bill Still’s The Money Masters, Aaron Russo’s America: Freedom to Fascism, and Money as Debt. Best books on this are G Edward Griffin’s The Creature From Jekyll Island, Eustace Mullins The Secrets of the Federal Reserve and Ellen Brown’s Web of Debt. There are lots of video presentations online with Eustace Mullins and G. Edward Griffin.
Just be wary of Ellen Browns suggestions for “staate banks”…. They ARE marvelous, if properly constructed, but her solutions are statist thru and through.
Master class syllabus right there.
There are about 7-8 families that run the moneyprinting scam. I was friends with a woman online who married into one of them. They are filthy rich and always on vacation….. They also had ties to Kenya where they own large swathes of lands.. that is also where they found Obama.
The real DEBT bubble has yet to burst, The FED and Wall St have siphoned TRILLIONS out of the system, it’s beyond repair. We have been exporting our DEBT via the DOLLAR for decades, the rest of the world is tired of our continued EXCREMENT. From the CIA to State Dept, nothing but strife and mayhem are now associated with the USA. We are going to survive, but not until we have another ACCOUNTABILITY session with our leaders, let’s hope they accept their due punishment in peace, if not, we know what to do. Imagine working an entire lifetime and then come to find out your PENSION is worth ZERO…….Then, and only then will the naysayers wake up to reality. It is upon us, the DEBT can never be repaid. The 3 Banks that will domino the western global finance scheme are Credit Suisse, Duetsche Bank, and UBS. How is that? They’re overseas, well, that’s where Wall St hides all of its shady bad deals, they keep the profits and sell off the losses to the rest of the world. BRICS is going to take over, backed by GOLD on a transparent blockchain! Go figure! This is all planned BTW, The FED needs a new scheme to continue stealing from the working class, aka DIGITAL MONEY…….They’ll start with a new DIGITAL stimulus to get the working poor to accept it, no food, no gas, no heat, OKAY sign me up, I don’t care if I lose my freedom, I’m HUNGRY! Another conspiracy come to light…..Prayers for all the fellow TREEPERS!
Putin is not lunching with Xi, he is on the menu as dessert. Biden is not doing this for free. He and his crew and about 200 other crews are getting paid by the US taxpayer in graf to do this. Because Obama started this and his entorage has a hand in it for the later big payoff. The belt and road initiative goes right thru the Ukraine. Why comit open genocide then a war will do. The China uses Russia to start the fight and bleeed the US some more. When the carcass of the US ( along with The EU and cohorts) is done, then the panda moves on the Bear and rots them from the inside just like the panda did to The US. Obama and the uniparty sold us out long ago.
NATO started the Russian Ukraine conflict.
NATO has been preparing Ukraine for it for 8 years!
Been stated by many officials for months now….
Including Merkle and Hollande who stated Minsk agreement was only signed to give time to build up the Ukraine troops and for NATO to supply them with arms/munitions.
Meanwhile……BRICS is forming more alliances,new trade deals,etc.
While our Government is still rabidly obsessed with Zelensky.
I received an email from my oil supplier offering discounts of $35 to $75 if a delivery was placed before March 31st.
I’ve been doing business with this same company for 25 years and it’s the first time that I’ve received an offer like that from them.
The mild winter in the northeast, coupled with people shifting to wood and coal around here, must have resulted in excess inventory.
I’ve kept the thermostat at 59 degrees all winter and reduced my oil consumption by about 20%.
I’m afraid we have much bigger problems than merely energy at this point, especially with oil down to a relatively cheap $69 a barrel.
Money is still being poured into the system at an unprecedented rate. This won’t curtail until the effective Interest Rate approaches the effective Inflation Rate. The spread is much larger than anything we ever saw in the 70’s, that’s the direct consequence of the massive issue of FIAT MONEY (Fake Money). It’s very important for people to understand the deviousness of “Modern Monetary Theory.” I pick it as the main culprit of all our problems because it keeps the crooks in business so to speak. There’s never any day of reckoning. For example, if you don’t have Quantitative Easing you don’t have Joe Biden to begin with. Quantitative Easing is the source of all their power and control. They can buy people off through all levels of society wherever they need the influence. Advertising for example, is the largest Subsidized Industry in the United States – look what that’s done to the media !
I bet the Oil Companies were subsidized for shutting down their operations as another example – anything it takes for them to get what they think they want is what they’ll do with Easy Money.
Inflation is not too much money in the hands of working people. It’s too much money in the hands of leaches that are not productive which drives Inflation. We are in an Era of unprecedented welfare payments and un-productive job creation. Un-productive job creation and idiotic government regulations are symbiotic and go together hand and glove. Also a “Security State” is exceedingly, exceedingly un-productive.
You could print money all day long as long as people are productive with it. Mr Trump knows that, but it has to be steered in the right direction. And it can’t be pro-longed or it will inevitably fall into un-productive uses (Mr. Trump knows this also).
Over the long haul Interest Rates are striving to reflect the Inflation Rate because no-one’s going to lend money unless they get at least as much back – so the erosion of the Purchasing Power is reflected directly in the Interest Rate.
Like all scientific truth it’s all very simple and elegant. The excess money injected into the system causes Inflation to rise, and then the Interest Rate will rise correspondingly with it.
Open Market Activities are how the Federal Reserve influence interest-rates, and increase or decrease the Money Supply. Selling bonds they offer them at a higher interest rate and suck money back out of the system. In buying bonds they’re willing to receive a lower interest-rate and inject more money into the system (except if they’ve gone beyond their means and break the system thereby paralyzing the circulation of money and effectively reducing the amount of money in the system anyway).
It’s very important to remember that The Fed only operates in a short-term arena. The Fed Can’t make a dent in the long-term bond market without prohibitively inordinate risk. The main thing the Fed’s doing is signaling the entire complex apparatus – the Fed’s influence is entirely based on credibility. This credibility can only be jeopardized so much.
The Fed does not set interest rates, it follows them, that’s really the posture they’ve been in ever since they started this aggressive Monetary Policy.
They haven’t been influencing the system, they’ve been milking it. They can’t do that anymore with visible inflation. See, interest rates are the biggest component of runaway inflation (and inflation is the biggest component of high interest rates). They can’t have the Burlesque of borrowing money at 4.97% Short-term Treasury Bill and lending it to the Banks at 0.00% Fed Funds Rate. That would be so preposterous it would just add fuel to the fire and the Treasury Market would be demanding even higher interest to buy the government’s securities. It’s sort of like how FTX shouldn’t have gone past a 30% reserve requirement. The Federal Reserve would be making the same mistake – they’re at the end of their rope.
I guess the Commies just want The Fed to do it anyway and you could have the fiasco of the government borrowing at 40% interest then turning around and lending to the Bankers for 0%.
I expect when that happens everyone will understand what they’ve done.
At any rate Sundance is right, fixing Energy Policy and making it efficient would be the single most important step toward fixing what could quickly become a Macro Economic disaster. But mostly because it would represent a commitment to repair the entire system. At this point there’s just so much more to fix also.
You can trust me on this one too, with the debt they carry there’s no way the Federal Government wants Interest Rates to rise. Mr. Powell has no choice.
Sundance is right that the war on organic (‘fossil’) fuels and pouring money into intermittent (‘renewable’) energy is driving up the price of everything. But the last few years of ‘quantitative easing’ and then printing trillions of fake dollars is the other huge factor in price inflation.
I think you have to address both of them, but certainly returning to energy independence and dominance will make the country more productive, and that will help get the fake money out of the system. But it won’t happen under the current suicidal regime.
Powell will not bend, he will hold firm. Cheer him on. Yellen is a globalist pawn.
Yes, the one word answer, Drill !
I think people are going to be really surprised how bad the economy is going to get. I think we are going to see a long-term change in most people’s standard of living as this all plays out.
I follow the racing community, not the professionals so much but amateurs like I was for a few decades and am amazed at the money being tossed around compared to our operations back in the day.
It’s like a different planet, even during Covid I was amazed. The money is coming from somewhere. I mean most of us had good jobs or were in business for ourselves (myself the latter) but this is a whole different level.
IDK, perhaps it’s an increasing divide between haves and have nots. I was more of a working grunt middle of the road, perhaps an endangered species now. China bled my industry dry of little guys, well American’s addiction to China did. Now the chickens are coming home to roost, it appears.
I do too….An upcoming off road race in Baja California has over 250 entries. Entry fees are over $ 4000 grand. The premier race trucks are half a million to one million each. No spares. 85 trucks are entered. Prize money of $ 25 K. So yeah…who fing knows!??
This collapse should be 2-3 times worse than 2008 due to prior bailouts raising the cost of Vehicles, houses, food, etc..
In 2008 I saw people almost starving who worked their whole lives, Good people…. who almost starved because of Obama’s BS policies.
We are in a DEPRESSION 2.0! The US is DONE as a nation. Our debt is unstable! The price of an ounce of gold, which has already smashed through one record after another, recently hit $2,000 — a milestone that experts say could reveal a lack of confidence in the soaring stock market. “Gold has become the safe haven of choice,” said Matthew Miller, an equity analyst at CFRA Research with a focus on metals and mining.
Yes, I’ve been waiting for someone to mention that energy prices are causing inflation, but as far as I have seen/heard, nobody has. They always talk about the “pandemic” or money printing. It drives me crazy.
I’ve been yelling that for 2 years. People look at me loke me like I’m nuts. Possibly.
The Democrat Con artists are talking about upping the child tax credits to almost 3x what they were before the scamdemic…. imagine the inflation that will bring. We haven’t seen anything yet.
Arrrrgggh! And we all have to be honest about who is walking into the country with huge families… who will be thrilled to be recognized with a lotta direct deposits right into their new bank accts.
The Brandon-stein Monster has many tentacles.
I think about how the intelligent people in the larger world are looking at this.
Look at this from the world’s view of the US and all this lying and posturing is revealed.
If you want to see something unbelievable, check this article out, archived from FOREIGN POLICY:
Russia’s Disinformation Machine Has a Middle East Advantage
Russian state-run media outlets have spread the Kremlin’s Ukraine war narrative effectively in the region.
https://archive.fo/XgJC4#selection-1051.0-1057.106
RT & Sputnik News are rinky-dink 1990s style news sites, compared the Western media’s Trusted News Initiative (CNN, BBC, WaPo, NYT, etc) and Social Media dominance. But like we constantly see here at CTH, the average story on CNN is lucky to last 24 hours before it falls apart completely and is debunked. Those news sites still have viewers because US progressives don’t care about the truth or making any logical sense. However, in the Middle East, there is no such loyalty, so they just switch off Western media and go to RT. The truth sells itself.
At no point in the article does what I just pointed out dawn on the Foreign Policy author. (facepalm)
J powell = amateur hour
Throw sand in the machinery…stop buying namebrands as much as you can…there are plenty of alternatives to Kraft Heinz, 3M, Coke, Pepsi, Budweiser, etc. A lot of it is better AND cheaper. Better yet, give up soda, Doritos, Velveeta, Cool Whip, baloney, Wonder bread, and start eating healthier.
Dinner tonight was some diced tomato over two small cheese and garlic biscuits (like the kind you’d bake for biscuits and gravy) with some canned spinach and mushrooms. I did put some crumbled bacon in the biscuits for protein.
I gave up name brands, most of them, long ago, and buy from local producers as much as possible. No fancy beverages, just generic green tea or plain well water with a bit of lemon in it. Last time I ate out was for my now dead best friend’s 34th anniversary a couple months before he unexpectedly died in 2021.
Good suggestions, thanks.
You missed a lot of names.
Buy local, buy only single ingredients from the grocery store. Don’t buy processed food.
You’ll be a lot healthier and Big Ag will be poorer.
CUT THE CORD
I don’t think the Fed. understands inflation. It has been so long since the last serious inflation they don’t even teach it in economic classes. Inflation is the spread between productivity growth, not GDP, and money supply growth. If you have 6% productivity growth and 6% money supply growth you have ‘0’ inflation. The Fed. believes Paul Volcker raising interest rates killed inflation. That was only half of the equation. Inflation didn’t come down until Reagan got the economy going after the Carter disaster. Reagan reduced regulations, lowered taxes, got the economy growing and productivity up. That’s when inflation started to decline. If the Fed. keeps increasing interest rates without productivity growth the may be successful in causing a depression. I lived it and I remember.
en this game of musical chairs end a depression like none ever seen will occur. I cannot think of one nation with a healthy banking system/fiscal policies. Look at the ratio of GNP to debt and most nations are over 100.
Glad I invested in land, gold, silver.
I remember, decades ago, a Russian customer who made his millions doing, of all things, hauling garbage, once told me ‘son, buy dirt, they’re not making any more of it‘
At the time his ‘side business’ was leasing land he owned to Cemex which built a batch plant there to supply concrete for highway construction.
Ever the businessman, he set up his own little casting plant and took the waste concrete that would be tossed as overage, for free, and cast what we know as K-rail/Jersey barrier/blocks with it and sold those. Smart man who started with nothing as an immigrant.
Russia’s GDP to debt ratio is 12% Saudi Arabia is 18%. Belarus is 25%. Denmark is 28%. Sweden is 30%. Switzerland 38%. Mexico is 42%. China – 62%.
Lots of countries have a debt ratio to GDP lower than the US. It was very interesting to look up.
https://www.worldeconomics.com/Debt/
Clickbait. Propaganda.
Regarding Mexico … The IMF keeps trying to get AMLO to borrow money and institute a more sophisticated tax system. Get Mexico hooked on debt.
AMLO understands their game, wily old guy that he is.
Where do I go to get a restraining order against the government? Anybody?
The Fraudulent Climate Change Ideology In Three Temperature Graphs, Part 4!!!
FClimate Change Ideology
Climate Change Ideology Is A Hoax
FJB/LGB
Give it another year and this climate nonsense will slowly be walked back. Germany is already back on coal.
The Dominant Global Security Issue Is Still Fossil Fuels
Climate change policies, while well-intentioned, can severely impact economic and national security.
https://nationalinterest.org/blog/dominant-global-security-issue-still-fossil-fuels-206336
The China – Russia alliance is starting to sink in with major US foreign policy analysts/journals. They will either hang the climate alarmists out to dry or give them cover by discovering some huge carbon sink that gives the Earth 200 more years.
It’s unbelievable these assholes (like Jerome Powell and Janet Yellen) are empowered to negatively affect the health and welfare of millions of Americans, Americans who have contributed mightily to the prosperity of this country (and some who have had a long line of ancestry who have given their lives to this country).
Having worked in the oil&gas industry for most of my life, I will add that the same oil&gas industry found and developed almost every successful well site in the world for over 40 years, including all of the Middle East, South America, half of Europe (the Brits were pretty good at exploration, too), and even most of the reserves found in Russia and China. This was because the Main Street economy was where all of the hard work was done. Except for a few Countries in Europe and the USA, the Government took over all domestic resources after the US and UK Companies found their reserves for them. The reason we finally became an exporting country was that Government wasn’t in control of our oil&gas industry.
Governments never do any of their own work and eventually fall way behind the technologies and have to contract the Main Street economy to get anything actually done. Contractors know the only way to win jobs from the Government is to slide kickbacks to the appropriate Bureaucracies, just like it has always been in most of the world.
Our government employs about 4% of our population and spends more than 20% of the money. We don’t get much value for the bucks we spend employing Bureaucrats, but the Demcommies think the Government doesn’t get to spend enough money. Maybe I am singing to the choir, so suffice it to say the Main Street economy is losing right now.
The govt’ is spending more like 50-60% of OUR MONEY.
This figure changes about every time Congress allows a debt increase and the President pushes through another huge deficit spending bill. My number was a guesstimate based on how many Bureaucrats it takes to produce the same GDP as a private sector employee. Last I heard, the ratio was 5 Bureaucrats to 1 private sector worker. I will gladly accept your number and thank you for your correction. I did suspect I was giving Bureaucrats the benefit of the doubt 🙂
5 to 1 it that is correct I don’t know, but they make 4-5 x the pay as a private sector worker anyways. Look at your basic taxes, they are taxing most people at well over 50% when everything is tallied up. The more they tax the higher inflation goes resulting in even higher taxes. It’s a nice ponzi scheme that only the Govt’ gets to commit.
Inflation is aways a more rapid increase in money than output. Governments control the amount of money. The powers that be want inflation. It is a tax no politician has to vote for.
Just listen to Milton Friedman on inflation:
Milton Friedman – The Nature Of Inflation – YouTube
Now read this article. Definitely read it. The bankers had it all planned out. – https://nakedemperor.substack.com/p/did-inflation-or-the-lack-of-it-result
Did Inflation (or the lack of it) result in COVID?
“Between 22 August and 24 August 2019, the world’s central bankers met in Jackson Hole, Wyoming. The FT reported on the meeting and its opening sentence was “for the world’s central bankers gathered in Jackson Hole, there was a sense that things would never be the same again”. What a prescient statement, how correct they were.”
Central bankers were worried. They were worried they were losing control, they were worried their monetary stimulus tools no longer worked and they were worried central banks might lose their independence.
These guys (and girls) (and thems?) aren’t stupid. They could smell the anger in the air. Citizens were getting poorer whilst the elite were getting richer. Most people didn’t know exactly how this was happening but they had a good enough idea that it was due to bankers and corrupt politicians. This had already resulted in shock victories for Trump (in the US) and Brexit (in the UK). Central bankers were worried that one more shock election combined with a crisis could result in an anti-establishment leader removing the central banks’ independent status to placate the angry mob.
The Plan
How could they retain power and print lots of money whilst keeping the economy subdued so as not to cause panic or a crisis that they were in no position to deal with? An unprecedented coordination through a monetary-financed fiscal facility was needed.
Two months later, Event 201 and the Wuhan Military Games began. In December we started to hear about a novel coronavirus. By March the following year a full blown pandemic had been declared and the ‘unusual circumstances’ needed for ‘unusual coordination’ were in place.
Money printing around the western world went into overdrive.
Lockdowns ensured there were explicit boundaries. Whilst money was being pumped into the system, the economy was being subdued which ensured there wasn’t an offsetting increase in interest rates and institutional credibility wasn’t undermined.
Conclusion
In 2019 central bankers were panicking. A downturn was imminent and all of their tools were useless. They were powerless and risked losing their independence. Their main tool, interest rates, needed to rise and the only way to do this was if inflation was rising. There was no sign of this happening so they came up with a plan which would pump money into the system whilst keeping economies subdued. Once they could see inflation was starting to rise a clear exit strategy would be put in place. An example of an exit strategy could include the proclamation that Covid was no longer dangerous and/or the start of the Ukrainian war.
Since then, inflation has risen sharply (making up for past inflation misses) and so interest rates have risen, returning power back to the bankers. Almost as if their plan was enacted and worked but that is all a coincidence I’m sure.
First of all, no matter what the energy policy is, one can’t rapidly print $13T worth of money (covid money, green deal, inflation reduction act) and not get inflation sooner or later. Inflation has to come. No other way.
The present idiotic energy policy just exacerbates the economic situation. Intentionally, the powers that be want to tamp down the economy. Economic growth would wipe out inflation. The swamp creatures want inflation. The swamp creatures need inflation. Inflation is the swamp creature’s goal. Inflation is a tax no politician has to vote for. Are they trying to inflate their way out of debt? Someone has to pay for ZIRP (zero interest rate policy) and no inflation for decades and a huge $32T deficit. Time to pay the piper.
cross posted at https://freedomaustralia.freeforums.net/thread/3213/restrict-credit-borrowing-main-street
Powell has finally realized what he is really good at, driving an economy into the ground. Help create the problem, then make it worse! Where does the country find these idiots??
Bad take. You’re way out of your depth here, Sundance. Powell is destroying the Eurodollar markets and thereby breaking hold that the City of London / Old Europe money has had on the USD. Raising rates was never about inflation in the strictest sense. It was about breaking the “Fed Put” and sucking offshore dollars back to the US.
https://tinyurl.com/ycx537ec
https://tinyurl.com/ytdcshuk
Jay Powell is MAGA, raising interest rates to destroy the Eurodollar globalists, not to join them. Google anything by Tom Luongo.
Gentle reminder that google is the brand name for a powerful multinational that is helping to rig elections and censor information (tho’ they oh-so-want us to continue using their brand as a verb.).
We can help remind each other that “search for it” is something everybody understands nowadays…and by doing so, we can all help to encourage research without increasing the power of the Goolag.
We will be talking WPA, CCC and soup kitchens pretty soon under Biden’s and your leadership Powell.
How long did it take anyone with nominal cognitive ability to figure out we are in an abusive relationship with what masquerades as our government ?
I recognized this fact in 1984 I was 30 at the time when every industry across the country was shutting down packing up and moving to CHINA !
I noticed the narrative that all middle class union industrial jobs were overpaid and benefits were to expensive , funny that public employees with similar salaries better vacation and medical benefits retired in their 50’s with life left to live and the means to do it !
Meanwhile after 47 years starting at 18 and retirement at 65 a steel worker might not lose his house between social security and the modest pension.
I truly want to love what I grew up believing was my country but it’s not my country . My country has been invaded from within and is controlled by people elected appointed and hired that despise people like me and only tolerate me as long as they can extort as much wealth as possible from me .
This is true of government at all levels local , state and federal
The absence of this absolutely fundamental and key factor being the root cause of all the country’s – the world’s! – current economic woes truly is one of the most stunning things of the past 2 1/2 years! And yet from literally the very day Biden took office and proclaimed a virtual shut down of the energy industry prices skyrocketed and EVERYTHING else naturally exploded in price.
But that’s their dirty little secret because “climate change”.
How about we have the Fed bail out the little community banks (if it comes to that…..they have $$$$billions). NEXT: Drill baby drill here in America! Everything runs on energy….the cheaper the better. Mine for coal, build new refineries and capitalism will flourish!