Guest Post by Martin Armstrong
The central banks have been digging deeper and deeper into their monetary toolboxes in a vain hope of cushioning the COVID-19-induced shock, which has been orchestrated by this global effort to CRUSH the economy and redesign it in their image of a fossil-free world. The fake pandemic aside, the notion that the banks were already beyond hope since the ECB lowered rates to NEGATIVE back in 2014 and Keynesian Economics has failed.
What has emerged is that the central banks have accelerated their transformation of monetary policy, which was once focused on defending and controlling inflation, into “Guardians of the Galaxy” combating inequality, climate change, inflation, and anything else they can think of. This decreases the possibility of ever returning to the existence of central banks pre-2007.
For the first time in post-1916 history, the US Federal Reserve has bought a wide variety of corporate debt issued by blue-chip borrowers such as Apple Inc., as well as junk bonds from riskier companies. As I have stated before, when the Fed was originally designed, its elastic money creation made sense because they bought private debt, which is paid off compared to government debt which never ends. The Bank of Japan has been what some call the petri dish for central banking since after more than two decades of expanding the money supply with no inflation, this has added to the rise of Modern Monetary Theory where these people assume that they can print money with no end and no inflation.
The central banks have lost control of the economy and the markets. There is no return to normal – they have now become the Guardians of the Galaxy.
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Why would, for instance, APPLE that is sitting on $ billions in cash sell new debt to the FED and why would the FED buy new debt that APPLE is selling?
Disregarding by its mandate the FED “can’t” buy securities.
I’m curious and not too bright…
The federal government has a history of ignoring the constitution. They follow their own laws when it suits them. The Federal Reserve owns the Federal Government.
This is one thing I don’t get about this crisis.
It’s obvious that a decision has been made at the highest levels to collapse the global economy. Central banks and their executives are all tied in at those levels.
So, why are those same central banks so desperately trying to prop up a system they know is scheduled for intentional collapse. Do they really think that people won’t notice? Do they think they will escape accountability?
What am I missing from my limited perspective on this?
Actually, they are not propping up anything but acquiring everything. And yes, it is happening right under the collective noses of the populace.
It’s important the central banks be seen “trying to prop up the system,” as awildgoose said, so they escape blame. Methinks their “tries” will prove ineffective.
Martin is close …. but he has not quite grasped it. What is taking place is a financial coup. The Fed is buying everything. Everything. At some point in time, the Fed will be majority shareholders in our capital markets Start watching Greg Mannarino videos on youtube. With time, you will come to agree that this is what is transpiring.
It is essentially already the case of a small number of families controlling most ownership interests on the planet. They are just formalizing it to be less convoluted.
Times a coming for a digital currency with negative interest rates. Between knowing your every digital move they add in new surveillance systems better than the ones China uses to track and control its citizens. Old Joe takes your guns and you’re all slaves. I think this was a bad SciFi movie I watched.
What I saw, was that old corrupt joe is fully on board with his version of “the radical lefts green new deal”. They admit on national TV that the democrats are now controlled by radical marxists.
It is up to us to respond, or else get swallowed and digested by communists.
There will be a civil war, before this happens, it will probably be the center/rural against the coastal/urban populations, and the urban folks will suffer the worst.