How the Feds Sedated American Capitalism

Guest Post by Bill Bonner

A Diary Dictum: People are neither always bad nor always good, but always subject to influence.

Want to know why tax cuts, spending increases, and EZ money from the Fed don’t work? Wonder how the feds could add $4 trillion in new money, suppress interest rates below zero for an entire decade, add $13 trillion in deficit spending, and still end up with the weakest expansion ever?

What’s the matter with “stimulus,” anyway?

Try this experiment at home. Tell your teenager that he will get $5,000 a month for the rest of his life, and a lifetime supply of marijuana. See how that stimulates him. Think he’ll study harder… work harder…?

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Time is the Fire By Which We Burn

By Doug “Uncola” Lynn via TheBurningPlatform.com

 

…Tomorrow, and tomorrow, and tomorrow
Creeps in this petty pace from day to day
To the last syllable of recorded time.
And all our yesterdays have lighted fools
The way to dusty death. Out, out, brief candle.
Life’s but a walking shadow, a poor player
That struts and frets his hour upon the stage,
And then is heard no more. It is a tale
Told by an idiot, full of sound and fury,
Signifying nothing.

– Shakespeare, William (1606).  “Macbeth”, Act 5, scene 5

 

In that passage of Shakespeare’s “Macbeth”, the protagonist turned antagonist swallows hopelessness and nihilism like an opiate. He does so for this reason: If life is meaningless, then so, too, are regret and guilt. It’s also been said that quote represented Shakespeare’s own view of theater – as all the drama was meant to invoke emotional responses from the audience after a suspension of disbelief had occurred.

In so many ways does the inevitable unfurl like a divine comedy; or a Shakespearean tragedy.  Even now as the tin-foil hat-wearing conspiracy theorists and fake news propagandists in the Mainstream Media, along with their comrades in The Resistance, tear at their clothing and gnash their teeth in the wake of Special Counsel Robert Mueller’s gigantic nothing-burger.

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Fed Rate Hike Forecast and Trade Tariff Talks Increasing Market Uncertainty

From Birch Gold Group

fed rate hike and trade war tariffs

Only two and a half months ago, the Fed signaled two rate hikes for 2019. But the Powell-led Fed appears confused because they’ve just adjusted that forecast to zero.

They also forecasted the end of its “QT” (quantitative tightening) balance-sheet runoff by September 2019. According to a CNBC article, the Fed is giving the market what it wanted, suggesting even more confusion.

This is explained in another CNBC piece:

The Fed forecast no rate hikes in 2019, and that is down from two hikes forecast earlier. The central bank also indicated it intends to end the reduction of its massive $4.2 trillion balance sheet by September. However, the Fed also trimmed its economic growth forecast for 2019.

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Our Third Bold Prediction

Guest Post by Bill Bonner

GUALFIN, ARGENTINA – We made two bold predictions, about a year ago.

Today, we make another one.

The Flood

Our first prediction was that the Fed would never normalize interest-rate policies, allowing the free market to set short-term rates, rather than the Fed itself.

Our second was that Donald J. Trump would never follow through on his threat of a Full Retard trade war with China.

The two are related in an important way. Fed policies, and the fake money system behind them – not tariffs – caused the trade deficit with China. Prior to the introduction of fake money, not connected to gold, in 1971, the U.S. ran a trade surplus, the biggest in the world.

Now it runs the world’s biggest deficit. Why the difference? Because now it can simply print the money to pay its foreign creditors.

Before 1971, trade imbalances never got too far out of whack. They were reconciled by shifting gold from the deficit country to the surplus country. Gold is limited, so it had the effect of lowering the money supply in the deficit country, forcing up interest rates, and reducing spending on imports.

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The Most Interesting Man in the World: Two Faces on the Same Coin

By Doug “Uncola” Lynn via TheBurningPlatform.com

 

Presidential elections are planned distractions

To divert attention from the action behind the scenes

Like a game of chess when the house is a mess

Or a petty money squabble when your marriage is in trouble

Or a football game when there’s rioting in the streets

It’s just another movie, another song and dance

Another poor sucker who never had a chance

– Timbuk3. “Just Another Movie”, Greetings From Timbuk3 (1986), Mamdadaddi Music/I.R.S. Music, Inc. admin. by Atlantic Music

 

Before the big game there’s a coin toss and by the luck of the draw, decisions are made even before the teams take the field. It is the same for politics with, perhaps, the exception of luck having anything to do with the outcomes.  Regardless, the games play on our screens and we passively watch; anxiously waiting to see what happens.

It’s an all-or-nothing blitz to score big and winners take all.  In the interim, there are the commercial breaks revealing ads refined by the fires of focus groups and in boardrooms.

Edward Bernays, the influential pioneer of public relations and the nephew of iconic psychologist Sigmund Freud, wrote in his 1928 book “Propaganda” (page 37) regarding an “unseen mechanism of society” that constituted “an invisible government” that was, assuredly,  “the true ruling power of our country”. Bernays added:  “We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of.”

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Markets Cheer a Recession?

Guest Post by Martin Armstrong

The rally in gold and the stock market together is demonstrating that eventually, we will see the alignment as it transforms from Public to Private assets. The most deranged reaction to the Federal Reserve saying they will be “patient” on any further rate moves, is just beyond all reason. But markets are not always rational – they tend to trade emotionally much of the time.

The Fed also said that it would be flexible on the path for reducing its balance sheet. The Federal Open Market Committee’s statement twice refers to “financial developments.” The actual passages Powell read the first one verbatim in his press conference

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A Satirical Dream: Trump’s 2019 State of the Union Address

By Doug “Uncola” Lynn via TheBurningPlatform.com

Mr. Speaker, Mr. Vice President, Members of Congress, the First Lady of the United States, and my fellow Americans:

It’s been another year since your president has stood before you to, once again, deliver yet another State of the Union address.

Tonight, however, will not be the standard fare.  Instead of half-truths and false optimism, I am going to set aside all that in order to say what I believe is true.

Dear citizens, we now stand a crossroads and we must choose.  We must choose if we are to move forward and deal with the real problems facing our nation, or to progress as a country of corruption; whether to return to our roots as an honorable republic – a nation of laws,  or to continue our decline into lawlessness and the abyss.

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The Ugly Truth

Guest Post by Sven Henrich

For years critics of central bank policy have been dismissed as negative nellies, but the ugly truth is staring us all in the face: Market advances remain a game of artificial liquidity and central bank jawboning and not organic growth and now the jig is up. As I’ve been saying for a long time: There is zero evidence that markets can make or sustain new highs without some sort of intervention on the side of central banks. None. Zero. Zilch.

And don’t think this is hyperbole on my part, I will present the evidence of course.

In March 2009 markets bottomed on the expansion of QE1 which was introduced following the initial QE1 announcement in November 2008. Every major correction since then has been met with major central bank intervention. QE2, Twist, QE3 and so on.

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Bear Markets & Fed Mistakes

Guest Post by John Mauldin

Powell Was Right but the Fed Is Wrong

Last week. I argued Jerome Powell did the right thing by raising rates a mere 25 basis points. He forcefully declared the Fed’s independence from the market and politicians for the first time since Volcker. Greenspan, Bernanke, and, in particular, Yellen all gave the markets a “put” option—basically a third unofficial mandate to make sure that asset prices keep rising. Now, of course, that’s not the way they would express it, but that is, in fact, what they did. They created a series of bubbles, which spectacularly (and predictably) blew up, particularly screwing the little guys who didn’t know better and could least afford losses. We should not be where we are today, and we would not be here today, without their seriously screwing up Federal Reserve policy.

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2019 FROM A FOURTH TURNING PERSPECTIVE

“An impasse over the federal budget reaches a stalemate. The president and Congress both refuse to back down, triggering a near-total government shutdown. The president declares emergency powers. Congress rescinds his authority. Dollar and bond prices plummet. The president threatens to stop Social Security checks. Congress refuses to raise the debt ceiling. Default looms. Wall Street panics.” – The Fourth Turning – Strauss & Howe

Image result for budget impasse trump schumer

Strauss and Howe wrote their book in 1996. They were not trying to be prophets of doom, but observers of history able to connect events through human life cycles of 80 or so years. Using critical thinking skills and identifying the most likely triggers for crisis: debt, civic decay, and global disorder, they were able to anticipate scenarios which could drive the next crisis, which they warned would arrive in the mid-2000 decade. The scenario described above is fairly close to the current situation, driven by the showdown between Trump and the Democrats regarding the border wall.

It has not reached the stage where all hell breaks loose, but if it extends until the end of January and food stamp money is not distributed to 40 million people (mostly in urban ghettos) all bets are off. The likelihood of this scenario is small, but there are numerous potential triggers which could still make 2019 go down in history as a year to remember.

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David Tepper Urges Move To Cash: “Powell Just Told You The Fed Put Is Dead”

Via ZeroHedge

In a series of notes discussed on CNBC by Joe Kernen, billionaire hedge fund manager David Tepper laid out where he stands on the market currently.

https://www.zerohedge.com/sites/default/files/inline-images/104328918-270.jpg?itok=juzv6Vt-

And it’s not bullish:

1. Powell basically told you the Fed put is dead.

2. Everyone is tight. Chinese money growth plummeting. ECB cutting the last of QE. And Fed still in tightening mode.

3. The net biggest issuance of Treasuries and worldwide fixed income is coming next year. Something is going to get crowded out. Bonds stocks etc.

4. Oh and there is this trade war question. I think we should be having a fight with China on different issues. But it is not conducive to confidence. Freezing some worldwide activity.

5. Cash is not so bad.

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The Intersectionality of Online Shitfests, Political Tribalism, Religion, Systemic Oppression, & Useful Idiocy

By Doug “Uncola” Lynn via TheBurningPlatform.com

 

– Liberal democracy is antithetical to multiculturalism.

–  Z-man

 

Of course, Z-man’s quote above would cause a gaggle of snowflakes to scream in unison: “Racism!”.   And, if the past is any indicator, then the next exclamation out their collective mouths would be something like:   “America has always been a nation of immigrants!”  Yet what they fail to consider is how past generations of United States immigrants assimilated into American culture.  This is not happening today.  Indeed. It does appear liberal democracies the world over, have been sacrificed upon the altar of multiculturalism and via the thought-control mechanism enforced by the globalists:  Political Correctness.

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No Matter What the Fed Does, We All Lose

Guest Post by Bill Bonner

Does anybody really know what time it is
Does anybody really care
If so I can’t imagine why
We’ve all got time enough to cry

– Chicago

BALTIMORE, MARYLAND – We got ahead of ourselves yesterday.

We were waiting for the big Fed announcement on a rate hike. But what happened? No trumpets. No bells. No heralds. None came.

Finally, we realized it was Tuesday, not Wednesday.

So, today’s the big day… not yesterday. All eyes with nothing better to do turn to the Fed. Lonely eyes. Sad eyes. Troubled eyes…

…and the hopeful eyes of Mr. Donald J. Trump.

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MAD WORLD

And I find it kinda funny, I find it kinda sad
The dreams in which I’m dying are the best I’ve ever had
I find it hard to tell you, I find it hard to take
When people run in circles it’s a very very
Mad world, mad world

Image result for the primal scream

The haunting Gary Jules version of the Tears for Fears’ Mad World speaks to me in these tumultuous mad times. It must speak to many others, as the music video has been viewed over 132 million times. The melancholy video is shot from the top of an urban school building in a decaying decrepit bleak neighborhood with school children creating various figures on the concrete pavement below. The camera pans slowly to Gary Jules singing on the rooftop and captures the concrete jungle of non-descript architecture, identical office towers, gray cookie cutter apartment complexes, and a world devoid of joy and vibrancy.

The song was influenced by Arthur Janov’s theories in his book The Primal Scream. The chorus above about his “dreams of dying were the best he ever had” is representative of letting go of this mad world and being free of the monotony and release from the insanity of this world. Our ego fools us into thinking the madness of this world is actually normal. Day after day we live lives of quiet desperation. Despite all evidence our world is spinning out of control and the madness of the crowds is visible in financial markets, housing markets, politics, social justice, and social media, the level of normalcy bias among the populace has reached astounding levels, as we desperately try to convince ourselves everything will be alright. But it won’t.

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Three (3) Reasons Why Elections Don’t Matter

By Doug “Uncola” Lynn via TheBurningPlatform.com

In so many ways, elections in America have become just another manifestation of bread and circuses; like watching a reality TV show when your house is on fire.  It’s why this article was almost named:

“The Inevitableness of Reality Requires Honesty and Acceptance”

Of course, the 2018 Midterm Elections will be analyzed ad nauseam, with other writers and pundits parsing it better than this blogger.  However, suffice it to say:  There was no Blue Wave and Trump has now solidified leadership of his Republican Party; at least more so than during the last two years of his administration.

In a raucous press conference the day after, Trump claimed victory and said his party “defied history to expand our Senate majority”. The president also said his focus in the days prior to the election remained on the senate and pointed out that most of the candidates for whom he campaigned had won their respective races.

Now, with Never-Trump  Republican senators like Bob Corker (R-TN) and Jeff Flake (R-AZ), along with Democrats Heidi Heitkamp (D-ND), Joe Donnelly (D-IN), and Claire McCaskill (D-MO) all gone  – Trump has solidified the senate so as to be in a much better position to navigate any cabinet and court appointments.  Obviously, the bloodletting has already begun, starting with Mr. Magoo himself, Attorney General Jeff Sessions.

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Towers to Heaven: The Alchemy of Prophecy, Terror, and Unity

By Doug “Uncola” Lynn via TheBurningPlatform.com

 

They had as king over them the angel of the Abyss, whose name in Hebrew is Abaddon and in Greek is Apollyon (that is, Destroyer).

– Revelation 9:11

 

At the end of last month, I read an article that claimed Special Counsel Robert Mueller’s investigation was foretold by a “20 Year Old Movie”. The film was a 1998 thriller entitled “Enemy of the State” starring Will Smith and Gene Hackman.

My curiosity aroused, I selected the show from my electronic catalog and watched it unwind; similar to the way I once queued up songs on jukeboxes in the halcyon days preceding the matrix.

In the film, Gene Hackman played an Edward Snowden-type National Security Agency (NSA) contractor gone rogue who revealed to the viewers the U.S. government’s high-tech surveillance capabilities. Two decades ago when the film was released, the surveillance grid disclosed therein would have seemed far-fetched. But not today. Now, in the aftermath of 911, the Patriot Act, and the Snowden revelations, those capabilities are not only common knowledge, but are the subjects of ongoing daily headlines.

The antagonist in the film was played by Jon Voight, a power-hungry NSA bureaucrat who assembled a team of technology experts and security agents that blackmailed Congress and even murdered a senator.  The politician was killed to aid the passing of a Patriot Act-style bill that would have, in effect, drilled the final screw into the coffin of the Fourth Amendment.

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