Tag: savers

Greenspan Admits The Fed’s Plan Was Always To Push Stocks Higher

Tyler Durden's picture

Submitted by Tyler Durden on 04/18/2016 12:40 -0400

Former Federal Reserve Chairman Alan Greenspan admitted in an interview with Sara Eisen that quantitative easing did what it was supposed to do, which was to inflate stock prices and drive multiple expansion.

He was confused as to why things such as corporate earnings, capital spending, and productivity have declined given how much QE was pumped into the system. The answer to the riddle of course, is that QE was never intended to help fix anything fundamentally, it was as Kyle Bass said recently, simply a mechanism to transfer wealth and make the rich richer.

“Monetary policy has done everything it can, unless you want to put additional QEs on and QEs on, they’re not helping that much.

 

What ultimately determines whether or not you’re getting an effect from the QEs are what has happened to the price/earnings ratio, and that obviously has done what you’d expect it to do.

 

You bring long-term rates down, and the price/earnings ratios in the equity markets go up, which is exactly what they planned to do and it’s happened that way.“

All of this is precisely what we’ve been saying all along, which is that QE has always been about one thing, and that is to take wealth from many (savers), and transfer it to a select few (asset owners).

 


DERANGED CENTRAL BANKERS BLOWING UP THE WORLD

It is now self-evident to any sentient being (excludes CNBC shills, Wall Street shyster economists, and Keynesian loving politicians) the mountainous level of unpayable global debt is about to crash down like an avalanche upon hundreds of millions of willfully ignorant citizens who trusted their politician leaders and the central bankers who created the debt out of thin air. McKinsey produced a report last year showing the world had added $57 trillion of debt between 2008 and the 2nd quarter of 2014, with global debt to GDP reaching 286%.

The global economy has only deteriorated since mid-2014, with politicians and central bankers accelerating the issuance of debt. These deranged psychopaths have added in excess of $70 trillion of debt in the last eight years, a 50% increase. With $142 trillion of global debt enough to collapse the global economy in 2008, only a lunatic would implement a “solution” that increased global debt to $212 trillion over the next seven years thinking that would solve a problem created by too much debt.

Continue reading “DERANGED CENTRAL BANKERS BLOWING UP THE WORLD”

NIGHT OF THE LIVING FED

Guest Post by Anthony Sanders

The Night Of The Living Fed! Short-term Rates Down 500 Basis Points Since Dec 2006 Zombifying Savers (And Not Helping Mortgage Borrowers)

The Federal Reserve Open Market Committee (FOMC) will be meeting Wednesday to decide whether to raise the Fed Funds target rate or continue to taper The Fed’s asset purchases.

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The Federal Reserve helped to push down interest rates, particularly compared to the end of 2006. Short-term rates (those utilized by savers and seniors) by 500 basis points. Long-term rates (those utilized by mortgage borrowers) have fallen by 250 basis points, about half the decline of short-term rates.

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But has The Fed’s aggressive easing (and rate lowering) done any good for the target mortgage borrowers? Mortgage debt outstanding continues to fall, house prices continue to rise as mortgage purchase applications deteriorate.

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The FOMC will look at inflation compared to labor market “improvements.” While inflation is only 1.7% (according to the CPI YoY), Urban Consumers Owners Equivalent Rent of Residences is growing at a rate of 2.7%.

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While Owner’s Equivalent Rent of Residences is growing at 2.7%, average wage growth is lagging at 2.0% growth.

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Food is shooting through the roof, which is an important cost to American consumers.

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The US Dollar?

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Yes, it is “The Night of the Living Fed!” where wages and interest rates remain zombified.

JanetzombiesCourtesy of Jessie’s Cafe Americain.