Guest Post by Paul Craig Roberts
The Federal Reserve decided it had not wiped out enough banks and again raised interest rates, thereby pushing more banks toward insolvency.
The goofs think, or pretend to think, that too many Americans are working, making and spending too much money, and causing inflation despite the obvious fact that the rise in prices is due to the lockdowns and sanctions which busted up supply chains and reduced supply.
The quickest and surest way to reduce prices is to remove the sanctions and repair the Nord Stream pipelines. Putting people out of work by pushing the economy toward recession reduces supply and will add to price pressures.
As Michael Hudson and I have made clear, higher interest rates cause lower interest rate instruments on the banks’ balance sheets to decline in value, but the banks’ liabilities don’t decline. The rising interest rates thus push banks into insolvency.
Some economists said the Federal Reserve must remain strong against inflation to reassure Wall Street, blah, blah. Well, Wall Street wasn’t reassured by the Federal Reserve’s stupidity. The Dow Jones Average fell 530 points in response to the Federal Reserve’s hike in interest rates.
The Federal Reserve’s ill-considered action will feed depositors’ fear of other troubled banks and continue the drawdown of deposits. Is the Federal Reserve trying to create a financial crisis?
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No. They “goofed” in 1913 on Jekyll Island, Georgia…Christmas Eve in the dark of night, if memory serves
These are the a-holes who defined the concept: Nelson Aldrich, A. Piatt Andrew, Henry Davison, Arthur Shelton, Frank Vanderlip and Paul Warburg
Paul Warburg, the “architect of the Fed”, was also a founding director of the Council on Foreign Relations (CFR) a decade later. Most of the Fed chairmen since WW2 have been CFR members, including Powell and Yellen.
Billionaire David Rubenstein, co-founder of the Carlyle Group, is the current CFR chairman; Powell is a former Carlyle partner. Billionaire Larry Fink of BlackRock, which “partners” with the Fed, is a CFR director. Fink and Rubenstein are also trustees at the Davos WEF.
The Jekyll Island conference was in 1910, and the Federal Reserve Act was passed in 1913.
Incompetence theory, my favorite.
Right up there with shit sandwiches.
Can there be a free market when the price of money is centrally planned?
No.
Price discovery is the opposite of arbitrary price-fixing.
To “goof” is to imply that a mistake was made. That implication is a goof.
Incompetent Federal Reserve Goofs Again
The mere suggestion that they’re incompetent and goofed is, well, goofy.
they are boxed in b/c of debt & inflation & imo they are flying by the seat of their pants —
Boogie’s right. I think this is all intentional. But to attribute inflation to lockdowns and supply chain disruptions is a bit disingenuous. The Fed printed has printed half of the money ever printed in the last three years. What did they expect to happen when set the printer to “BRRRRRRRRR”? Every move undertaken by the Fed since its inception has been to enhance its own power. Destroying the dollar opens the door to a new global digital currency and all of the evil that entails, and you can bet that the people benefitting most can be found behind the curtain.
Hey, another conservative teacher! Welcome, bro! Maybe we can hold our next Conservative Teacher Reunion in a telephone box! 🙂 Just one question: yes, QE is capable of destroying the value of the dollar through inflation, but won’t the current policy of raising interest rates strengthen it? Why would Powell do that if we wants to kill the dollar and replace it with a CBDC? Am I missing something? Carry on the good work!
PCR doesn’t do monetary inflation, apparently. All inflation is “price inflation” and all price increase are “inflation” no matter what the cause.
The domestic destruction of the $ will be nothing compared to the global destruction of the $.
Soon we won’t be able to export our inflation and the value of the $ will go to 0.
Put another way, the buyer of goods does not set the price, the seller accepts or rejects the offer.
In the past the US was able to force the acceptance of our fake money for real goods on the world but this is ending.
When China decides to only accept real money for their products, Walmart will close and eliminate 20million jobs.
Why is this so hard for people to figure out? We were destroyed by our trade agreements that offshored our production and are now a false economy based on debt and money printing.
This ends now. Lazy sodomites in the FUSA will get to wake up to starvation. The sooner the better in my view if only we can avoid WW3. FUCK the lazy ass free shit army that has helped destroy the country, shoot to kill when they come knocking. These government fucks that had it easy while they sucked the tit will soon find out the tit is dryer than a popcorn fart. They helped slit their own throats with their destruction of our value added production economy and replaced it with fraud, so let them starve to death and reap what they have sown.
DIRTY GOVERNMENT ASS FUCKERS CAN EAT SHIT.
When we have to purchase some other currency on the open market to pay for our imports, there will be a lifestyle change in the USA. Other countries don’t want worthless dollars.
I am not making a statement about the Federal Reserve. The problem is the Totalitarians (Democrats + RINOs) in the Congress. They flooded the economy with fiat currency at the same time supply was being constrained. Just as monetary theory predicts, prices went through the roof. The Fed is useless in this situation – it cannot “fix” anything, but it can “break” everything. The only thing proved by this misguided incompetence is that the congress is packed with individuals do not understand basic principles of economics.