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.
Nor will higher interest rates be helpful to the housing market and construction jobs.
To clarify for you what the Federal Reserve is doing: The central bank is pushing the economy into recession and unemployment, and possibly into another financial crisis if Wall Street has not cleaned up its act, for the purpose of preventing wages from rising to catch up with the prices that have already risen! There is no point to this. It will increase debt and make debt more difficult with which to deal.
Wherever you look anywhere in the Western world you see nothing but absolute craziness. Intelligence and leadership have disappeared from the Western world.
The US is intervening in the affairs of major nuclear powers and is committed to protecting Ukraine’s borders while the US border remains wide open, and President Biden and the Democrats threaten higher taxes on top of the Federal Reserve’s higher interest rates. Tell me how this makes any sense.
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It’s not suppose to make sense, it was the plan all along. My advice, get out of the large urban areas, when the EBT cards are declined the free for all is on!
The only thing that continues to surprise me is that so many smart pundits are acting surprised by the ‘latest developments’ of a collapse that has been well underway for a long time.
The cries for “why? this makes no sense!” demonstrates the power of the ponzi to continue long after the conmen have stopped even trying to run the con. Bush “just keep buying stuff” 9/11 forever war kickoff rally to “too big to fail, too big to let fail” mortgage melt own, to “shut the world down, stay home and consume” covid wealth transfer infinity stimmy, to “the banks are safe keep paying your loans” infinity bank stimmy 3.0. We are the bagholders; we are the liquidating collateral of the entire ponzi. Thats why.
Ok. So what interest rate should a private lender charge given the uncertainty of inflation?
Once the inflation genie is out of the bottle , how do you solve this problem. Sorry Mr Roberts there is nothing the Fed can do. It up to the government to lessen demand by cutting spending rather then increase it. Which the Fed will have to finance because no one else will.
The ONLY thing that should be setting interests rates (for both savings AND borrowing) is the FREE MARKET of millions of individuals and institutions acting in their own self-interest. Anything else is market manipulation for the benefit of some over others and will always FAIL at some point.
Powell is (or has been) doing a half-hearted attempt to save the Dollar from going hyperinflationary supernova.
Unless he is very naive, it must have been clear to him that the choice between imploding the economy now (by raising interest rates) and imploding the Dollar value in the near future, politicians will always go for the latter.
Usury, ain’t it a bitch! Lone sharks with a white collar and a fancy title = “The Fed”
Usury is about super high interest rates. What the Fed has been doing has been the exact opposite. This has been nothing but a massive WEALTH transfer of the value of the dollar into the hands of the first recipients of the cheap, newly-created money.
Free book to download on banking. Great book.
https://mises.org/library/mystery-banking
I’ll take a look
https://www.bdoutdoors.com/forums/attachments/shit-for-brains-jpg.1132043/
See whatever the real results are, then work backward to understand this was the intention of the Fed.