Guest Post by Martin Armstrong
One piece of analysis commonly misconstrued is the Federal Reserve’s role in the nation’s economic health. Even those who have the ability to piece together other variables that often go unnoticed commonly point their finger at the Federal Reserve. No one is factoring in the largest driver of inflation – WAR – nor are they factoring in the three main pillars of government debauchery (war, taxation, government spending) that the Fed cannot control.
They never look at the history of central banks and how Congress has been manipulating the law to alter the Fed’s purpose. If there was a single interest rate and one policy set in Washington, why do we even have branches of the Fed if they no longer act independently? When the Fed was created, the branches managed internal domestic capital flows. Each branch was independent, and they would lower or raise the interest rate in their jurisdiction depending on the flow of money. Too much cash? They lowered the rate. Not enough cash? They raised it. This was all before Keynesian Economics when the interest rate became the tool to manipulate our demand.
The San Francisco earthquake of 1906 created the Panic of 1907, which caused capital to rush from East to West. This created a shortage of cash in New York and led to bank failures. Hence, the Federal Reserve was created with branches to manipulate the internal capital flows – not the Quantity of Money Theory or the demand of the people.
Roosevelt usurped all the independence of the Fed and created a Washington monopoly to push his socialist agenda into place. We are hearing the same pitch of equality once again from Biden. The government is supposed to be separate from the Federal Reserve, but the president appoints the chair. The formerly independent central bank that was owned by the bankers to prevent the misuse of taxpayer funds is now under control by the banks only in theory; the reins of power are political.
The Federal Reserve failed to produce inflation while engaging in QE between 2008 and 2019. Most analysts ignore that entirely. If the Fed issued $1 trillion and buys in US Treasuries, I hate to tell you, but it would have ZERO impact. Why? Because debt today is simply cash that pays interest. Once upon a time, you could not borrow against government debt. Thus, it was deemed non-inflationary as long as it could not be used as money. Today, you post bills as collateral to trade futures. The old theories no longer exist in this new, strange world we live in. Hence, all the QE was merely swapping the debt for cash.
Also, consider where the Fed purchases its debt and who purchases US debt. China, for example, is no longer buying US debt due to US-China government relations that the Fed has absolutely no control over. Then, say China sold its debt for cash. The dollar would go offshore, and the domestic money supply would NOT increase. There is a lot more to this game than the simplistic analysis that leads to brainwashing the financial community and investors.
Jerome Powell has no power over fiscal spending or the deficit. Central banks everywhere are trapped. The central banks in Europe are in FAR worse shape right now. When Powell stood before Congress and subtly criticized the Biden Administration by calling their constant spending “unsustainable,” he was attempting to explain that the central bank could not overpower the government here. The central bank can create elastic money, and it will return to doing so. Private capital is fleeing government debt on a global level.
In the end, the globalist agenda is to default on all national debts, and they will no longer need to bail out the bankers. Welcome to the Decline & Fall of Western Civilization.
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No one is factoring in the largest driver of inflation – WAR – nor are they factoring in the three main pillars of government debauchery (war, taxation, government spending) that the Fed cannot control.
Sure they don’t.
I still say the governments very ability in the first place to engage in what is for all intents and purposes unlimited spending is what is really behind much if not all of what ails us . Technically I suppose the fed didn’t initiate this ability ? People with a lot of stupid money ( they didnt really earn it comensurate with its quantity )get up to a lot of stupid things . This isn’t strictly an orthodox economic perspective but borrows from what is know as the “universal laws of compensation “where someone cannot possess something they didn’t really get in the correct way and so you end up with a “Jerk ” scenario like Steve Martin in “The Jerk”after he got way more money than he was capable of handling . Fancy hats , fancy cars and all manner of frivolity , it was all fleeting .These people ( the government )cannot handle properly the wealth that they didn’t actually create .Its pretty simple .
Me ? I identify as a silver back gorilla , and it may not show but I’m smiling on the inside .
Armstrong shilling for the FED now
Back in the 60’s, LBJ & CONgress came to the realization that SS was bringing in a whole lot of cash every month and they figured out they could replace the cash with Special Treasury Notes in the SS “Trust Fund” and nobody would be the wiser. They then took this cash and spent it (and a lot of young American blood) in a small SE Asia country, as well as on LBJ’s (not so) Great Society.
The sleight of hand worked so well that they doubled up on the spending, buying as many votes as they could and giving as much as they could to their friends in industry, who, it turned out, liked to make gigantic “campaign contributions”. The rest, as they say, is history and so is the formerly great United States of America.
During my lifetime, CONgress has forgotten the words of James Madison –“I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on the objects of benevolence, the money of their constituents.”
I’m as guilty as you all, but if you are paying taxes to Leviathan, you are giving tacit approval to what they are doing. You are supporting their evil.
I am trying to remove myself from the evil by removing myself from the machine working to kill me and mine. It isn’t easy, but It’s liberating.
Use cash, use a VPN, turn off your phone and put it in a Faraday box until you must use it. Shun any use of criminal alien invaders. Remove all social media from your life. Buy a ton of ammunition and become ungovernable.
Make America Yours Again.
At one time it was said all those Special Treasury Notes were in paper form and were stored in windowless, concrete buildings all located in West Virginia, built at the behest of their favorite son, Senator Robert Byrd. To be clear: the cash deducted from worker’s pay for their Social Security “contribution” was turned into paper IOUs (the STNs) that went into those warehouses. The cash then went to fund the Great Society via immediate spending. The “social security lockbox” made famous by algore was just another of his hoaxes.
The key-and something Armstrong fails to mention-is the use of leverage is a “get something for nothing” con game that politicians have played and perfected into new kinds of financial vehicles-like the reverse repo craze.
It used to be that banks were required to maintain reserve ratios at what could be called logical and fair percentages; today those reserve ratios are nearly zero, versus what were at times as high as 50%. What does that mean? Under a reserve ratio requirement of 50%, a bank with $1 million of depositor funds could loan out $500K but had to keep $500K in cash (or near-cash) in reserve to provide a measure of safety should the economy go into a downturn or there be bank runs. The reserve ratios (yes, in true government fashion there are more than one) are laughily low, barely above zero percent. Just another form of leverage that is nothing more than a two edged sword-wonderful in good times but devastating in bad time. One could make a case for the phrase “privatizing profits and socializing losses” as being a result of leverage gone wrong. Notably, the architects of leverage are less than gallant players, whether they be politicians, bureaucrats, bankers, Wall Street types, or company CEOs.
Interest rate setting.
Targeted inflation rate.
Wall street hanging on everything the Federal Reserve says.
Disguised terminology such as QE, and ‘transitory’ to define their meddling in market economies.
And when rates are raised to try and reign in the debt bubble of easy money, Wall St. pouts about it, and everyone’s retirement savings take a 30% haircut.
So the rich bitch, then rates are lowered again. And consumer products prices outpace wages… stagflation, for the middle and lower classes.
See the repetitive cycle?
But nah. A private group of mega bankers isn’t the problem.
Human nature is ultimately the culprit .Gruberment hacks technically coulda just said “NO !” ( Nancy Reagan ) just like they coulda and shoulda just said no to being bought off by Big Corps ( agency capture ) cuz technically they are supposed to be working for US . Its all about the idea of ever expanding government and the inevitable reductio ad absurdum that following that idea will eventually conclude with .
I don’t think he thought this through. Either that or someone paid him to write this.
Your overthinking it. The key point is the big Oligarchies run the planet and will do whatever they want. What’s not valid about that?
AKJOHN
She is making the observation that even better writers of today do not always do a good job of writing clearly and coherently. The crap coming form the not-so-good writers is pathetic. I agree with MC.
He’s part of the Jew ponzi scheme he cannot be honest.
The different branches of the federal reserve were always a lie. The early opponents made that clear.
Knew a guy who was a mid-level economist at one of the Fed branches. He hated the bureaucracy and felt they would do a better job if they let go half the staff. Ever read any of the articles published by the Fed (every branch publishes, and their stuff is on-line)? The thing in the last 15 years that is noticeable is the names of many of the writers: often anything but American-lots of Chinese and lots of Indian names. Makes one wonder.
The rich always seem to get richer. Does the Fed have an impact on that? Maybe that is too simplistic of an observation, but it seems to work for the uber wealthy.
I hate the FED because it’s owned by the fuking Khazarians. The Khazar’s want us dead or enslaved, if the U.S. was forced to go back to the definition of Constitutional money issued by the U.S. Treasury the world would be more peaceful. Majik money is an abomination.
What an idiot.
I am sick of endless war against all the wrong “enemies” but I think the endless printing of money is the root cause of our inflation problem.
Mountain,
The Endless counterfeiting of fiat/derivatives (its not real money) is how TLPTB (L=Luciferians) bought or bribed all the power centers and control all the traitors.
Their back up tactic of intimidation, blackmail, and if those two are not possible murder…has obviously been successful to date.
We will soon see what is going to happen after they lose control of their counterfeited fiat/derivatives…The Great Reset/Taking or The Great Awakening/Pushback???
And all of it happening during the GREAT JAB DEPOP!
“Their back up tactic of intimidation, blackmail, and if those two are not possible murder…has obviously been successful to date”-amazing how right after reading that the thought of Epstein came into view.
Armstrong often makes good points , but not here. The Fed is the enabling tool that allows all the fuckery to go down. As G. Edward Griffin says in book and interviews , it is not really private nor public it is a ” hybrid ” cabal. Without the Fed , and the hidden tax of inflation Congress spending would be so much more visible to the people that pushback and revolt at increased taxation and ‘ takings ‘ by the King’s Men would be commonplace.
” Congress wants the money and the Fed prints it “
The US Treasury and Janet Yellen are equally complicit.
The 1913 Federal Reserve Act, signed into law by President Woodrow Wilson, gave the Fed the ability to print money and policy tools to ensure economic stability.
The Federal Reserve System created the dual mandate to maximize employment and keep prices stable.
So the simple question goes like this-
Do we have stable prices?
That’s it.
Since the Fed was established, the dollar has lost 97% of its value.
If that’s the outcome, then the narrative of intent was false.
We know this, but Stretch Armstrong is obviously clueless.
Or is he?
A 2% inflation goal means that they PLAN on STEALING 2% of the wealth of everyone (at a minimum) every year…compounded.
But what would the impact be if $1.00 wages of 1913 were $26.14 wages in 2020?
What a load of horse shit. The malfeasance of the banks forced the federal government to bail them out because of the sheer volume of money involved, and the black hole of CDS’s is even deeper. Glass-Steagall Act repeal and replacement by the Gramm-Leach-Bliley Act opened the doors for Wall Street to do its worst. If you want to know the truth about central banks today, go to
It’s like a cross between an octopus and a centipede: layer upon layer of causes. Eg, the anti-redlining requirement championed by the liberals that forbid banks from refusing to loan to suspect high risk home buyers. Not saying the banks deserve support, only that they too have bullshit demands heaped onto their shoulders.
Nice try–the lie that won’t die:
https://www.forbes.com/sites/eriksherman/2018/05/06/the-lie-that-wont-die-poor-borrowers-caused-the-financial-crisis/?sh=3d6d4519783d
And it never stopped:
https://www.dailykos.com/stories/2020/5/18/1945756/-A-whistleblower-says-banks-have-been-inflating-bundled-loan-values-again-it-looks-like-he-s-right