Guest Post by Ron Paul
Select politicians, government officials, economic elites, and experts arriving at the annual World Economic Forum meeting in Davos, Switzerland were greeted with an open letter signed by more than 250 billionaires and millionaires. The signers request their respective governments raise their taxes.
Continue reading “Don’t Tax the Rich. End the Fed!”
“War is a racket. It always has been. It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.” – General Smedley Butler
I don’t need your civil warIt feeds the rich while it buries the poorYour power hungry sellin’ soldiersIn a human grocery store
Whether it is a distinguished general who came to his senses in 1935, after doing the bidding of the monied interests by initiating conflict throughout the world to fill their coffers with blood money, or a rock & roll star fifty years later writing a hit song about the exact same theme, the song remains the same. The wealthy always benefit from war, the poor always die in their wars, and politicians are bribed to continually foment conflict, hate, and railing against whoever their puppet masters choose as the enemy of the moment. This is not a recent development, it has spanned centuries, just the sums of money feeding the military industrial complex are now astronomical.
Guest Post by Paul Craig Roberts
Dear readers and fellow economists, the Federal Reserve is treating a rise in prices from supply shocks and disruptions from the Covid lockdowns and sanctions against Russia, Iran, and other countries as if it were a monetary inflation. It is true that too much money is chasing too few goods and services, but the cause is supply shortages and not excess consumer demand.
This fact is obvious, but it is not acknowledged. We know that the lockdowns and sanctions stopped production, caused transportation problems, caused energy shortages, caused business failures, and disrupted supply chains.
We know that excess consumer demand in the US did not cause double digit inflation in Europe and some food prices in England to double. The inflation in the UK and Europe was caused by the Biden regime’s supply-disrupting sanctions and by their own Covid lockdowns.
Continue reading “The Federal Reserve’s Anti-inflation Policy Makes No Sense”
Authored by Tom Ozimek via The Epoch Times,
The Federal Reserve has announced a timeline for the launch of its long-awaited FedNow payment service that will let banks offer customers instantly available funds and execute real-time payments, with critics flagging concerns like lack of cross-border payment processing and raising questions about surveillance.
The Fed announced on Wednesday that it will begin formal certification of participants in the FedNow system in April in anticipation of a July launch.
First announced in 2019, FedNow will allow banks to instantly transfer payments across the financial system.
“With the launch drawing near, we urge financial institutions and their industry partners to move full steam ahead with preparations to join the FedNow Service,” Ken Montgomery, first vice president of the Federal Reserve Bank of Boston and FedNow program executive, said in a statement.
As banks and other financial institutions join the program, this will create a growing network with clearing and settlement features that lets businesses and individuals send and receive instant payments at any time of day.
Recipients using the system will have full access to funds immediately, making it easier to make time-sensitive payments.
Continue reading “Fed Announces Launch Of ‘FedNow’ Real-Time Payment System, Sparking Debate”
“We’ve got strong financial institutions…Our markets are the envy of the world. They’re resilient, they’re…innovative, they’re flexible. I think we move very quickly to address situations in this country, and, as I said, our financial institutions are strong.” – Henry Paulson – 3/16/08
“I have full confidence in banking regulators to take appropriate actions in response and noted that the banking system remains resilient and regulators have effective tools to address this type of event. Let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out . . . and the reforms that have been put in place means we are not going to do that again.” – Janet Yellen – 3/12/23
With the recent implosion of Silicon Valley Bank and Signature Bank, the largest bank failures since 2008, I had an overwhelming feeling of deja vu. I wrote the article Is the U.S. Banking System Safe on August 3, 2008 for the Seeking Alpha website, one month before the collapse of the global financial system. It was this article, among others, that caught the attention of documentary filmmaker Steve Bannon and convinced him he needed my perspective on the financial crisis for his film Generation Zero. Of course he was pretty unknown in 2009 (not so much anymore) , and I continue to be unknown in 2023.
Continue reading “IS THE U.S. BANKING SYSTEM SAFE? – 15 YEARS LATER”
Guest Post by Paul Craig Roberts
Based on reporting of economic data that John Williams has long shown to be unreliable, as have the constant revisions of the data, Federal Reserve chairman Powell is threatening higher interest rates. This threat comes amidst large layoffs of employees by tech companies, GM buyouts of salaried employees, signs of possible bank problems, and by reports that 40% of Americans are living paycheck to paycheck on credit cards. Higher interest rates will be no more helpful to an economy dependent on consumer credit than the raised rates already in place, and they cannot be helpful for derivative trades on the volatility of interest rates.
Continue reading “What Is Going On in the Federal Reserve’s Head?”
Guest Post by Ron Paul
Now you see it … maybe soon you won’t.
Over the last year, the seeming ability of stock values of many technology companies to keep rising forever met resistance. This was true even for the major technology companies known collectively as “big tech.” During the last 12 months, Meta (parent company of Facebook, WhatsApp, and Instagram), Amazon, and Alphabet (parent company of Google and YouTube) suffered layoffs and big declines in stock prices.
Continue reading “The Federal Reserve’s Magic Trick: Big Tech”
Guest Post by Paul Craig Roberts
The Federal Reserve is not conducting an anti-inflationary policy. It is conducting an anti-people policy.
The rising prices are not due to excessive consumer demand that needs to be curtailed by choking off credit. The rise in prices are the direct consequence of the idiot Biden regimes’ unnecessary Covid lockdowns and the idiot Biden regime’s Russian sanctions which have disrupted the globalism on which the Washington fools have based our economy. Putting people out of work cannot prevent higher prices due to supply constraints. The Federal Reserve is causing higher prices by further reducing supply.
Guest Post by Paul Craig Roberts
Normally, recessions are the result of a reduction in liquidity by the Federal Reserve, the central bank, which is signaled by a rise in interest rates. Normally, recessions are short-run affairs of 6 to 9 months. Unemployment, which is as costly in its way as inflation, causes the Federal Reserve to relent and to increase liquidity, which is signaled by a reduction in interest rates.
This approach assumes that inflation is a monetary phenomenon–too much money chasing too few goods. But is the current inflation a monetary inflation? The Federal Reserve’s response to the financial crisis of 2008-2009, itself caused by the deregulation of the banking system, was to create $8.2 trillion in new money with which to purchase troubled bank investments that threatened the large banks’ balance sheets and transfer the troubled instruments to the Federal Reserve. This money did not go into consumer prices. Instead it drove up stock, bond, and real estate prices. The Fed stayed with this policy, which drove up the prices of financial assets, for over a decade, concentrating wealth in few hands.
Guest Post by Ron Paul
The Federal Reserve’s recent 0.75 percent increase in its “benchmark” interest rate is the Fed’s highest rate increase since 1994. This increase is a sign that the Fed has finally realized that price inflation is more persistent and widespread than the Fed initially believed.
Stocks have fallen much lately. This is in part because of fears rate hikes will push the economy into recession. The Fed itself seems to believe that the economy is going to slow down in the near future, as it has reduced its projection of 2.2 percent economic growth in 2022 to 1.7 percent. Even more ominously, the Atlanta Fed’s GDP tracker fell to zero for the second quarter of 2022, due in part to May’s weak retail sales.
The Fed claims it will reduce inflation without significantly increasing unemployment or causing a recession. This is likely to be as accurate as the Fed’s prediction that inflation was “transitory.”
Continue reading “Federal Reserve’s Rate Increases: Too Little Too Late?”
Guest Post by Paul Craig Roberts
Yesterday the Fed raised short term interest rates by three quarters of one percent, and the stock market rose. The stock market did not rise because of the rate hike. The stock market rose because the Atlanta Federal Reserve bank dropped its forecast for second quarter (ends June 30) GDP growth to zero — 0.0 — which means that technically we are in a recession.
As interest rate hikes worsen recessions, the stock market has concluded that Fed tightening is over. Soon the Fed will be lowering interest rates to fight recession and unemployment. The real question is: why did the Federal Reserve raise interest rates on the same day it knew the economy had descended into recession?
The Federal Reserve chairman, Jerome Powell disclaimed any intention of causing or worsening a recession by ratcheting up interest rates. But the real unanswered question is why did the Fed raise interest rates after the Fed knew we were in a recession unless the Fed wants a serious recession?
Guest Post by Ron Paul
President Joe Biden has unveiled a three-part plan to fight inflation — or at least make people think he is fighting inflation. One part of the plan involves having government agencies “fix” the supply chain problems that have led to shortages of numerous products. Of course, any attempt by the government to solve the supply chain problems (which were caused by prior government interventions such as shutting down the economy for over a year) will not just fail to solve the supply shortages but will create new problems.
Guest Post by Ron Paul
The US government’s Consumer Price Index indicates prices have increased 7.9 percent in the last year. While this statistic shows the highest rate of increase in forty years, it still understates the amount prices have increased, in part because the statistic is manipulated to minimize reported price increases.
A stealth form of inflation is “shrinkflation.” Shrinkflation occurs when businesses reduce the size of a product so its price can stay the same. For example, Frito-Lay recently began putting fewer chips in a bag of Doritos, reducing the weight of a bag about five percent from 9.75 ounces to 9.25 ounces in the process. Of course, charging the same for less is a type of price increase.
Guest Post by Ron Paul
The US Senate will soon vote on Federal Reserve Chairman Jerome Powell’s nomination to a second term. One of the senators opposing Powell is Elizabeth Warren. I don’t often agree with Senator Warren, but I do agree with her assessment that Powell is “dangerous.” However, Warren actually doesn’t understand what makes Powell, or any Fed chairman, intrinsically dangerous to liberty and prosperity.
Warren thinks Powell is dangerous because she thinks he will not be supportive enough of imposing her desired new regulations on banks and other financial institutions. Senator Warren, like most progressives, clings to a fantastical notion that regulations benefit workers, consumers, and small businesses. The truth is most regulations benefit large corporations by imposing costs that big businesses can easily absorb, but that their smaller competitors cannot.
From Birch Gold Group
Since 2008 there have been numerous examples where the Federal Reserve has protected the wealthy elite while failing both Main Street citizens and the U.S. economy as a whole.
Right now, Chairman Jerome Powell stands at the center of another major failure to live up to the Fed’s mandates to keep inflation in check (remember that 2% target?) and unemployment under control.
In a recent column appropriately titled “Federal Reserve Failure,” retired Congressman Ron Paul took the Fed to task on their monetary policy decisions. In it, he issued a criticism of their recent announcement to begin “tapering” billions in bond-buying:
Continue reading “Tweedledee? Tweedledum? Either Way, You’re Paying the Bill”
Guest Post by Ron Paul
What do the Federal Reserve and neoconservatives have in common? They both refuse to admit that their policies — the neocons’ promotion of perpetual war and the Fed’s manipulation of the money supply — are complete failures, having produced the opposite of the promised results.
The latest example of the Federal Reserve engaging in Bill Kristol-like levels of denial is the Fed’s continued insistence that the return of 70s-style inflation is a “transitory” phenomenon resulting from the end of the lockdowns. The Fed has acknowledged the “transitory” inflation will last until at least 2022, yet it is still determined to keep interest rates at or near zero until the “jobs situation” improves.