World Economy Is Dependent Upon Fed Inflation

Thu 08 Oct 2020 06:43:56 AM EDT

The world “economy” is dependent upon Fed inflation and Fed inflation isprobably dependent upon Congressional spending. After all the Federal Reserve banks must pledge collateral” for each dollar they want to create and they have created quite the mountain of them since this past spring. Government treasuries supposedly produce good collateral. I guess the collateral is good as long as you can force tax payers into making payments. I hope no one deludes him/herself into thinking that tax “dollars” are helping people other than bankers. It is all about monetizing debt! They create it and you work.

Here is Fed Chairman Powell:

‘”Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses,” Powell said in a speech delivered to an economic conference. A too-slow recovery would also exacerbate existing inequalities, Powell said, which would be “tragic.”

The Fed chairman has consistently urged Congress to put more money into the recovery, but the remarks on Tuesday are some of his bluntest to date.”

He is lying of course.

President Trump is falling for this nonsense too. He will never fulfill his promise to drain the swamp. He is actually hoping to fill it:

“After yanking the rug out from under stimulus negotiations in Congress Tuesday afternoon, causing stocks to swoon, Trump today corrected his error and tried to push the rug back under the stimulus negotiations, and in addition promised voters a huge stimulus deal if they reelect him, while Biden is promising voters a huge stimulus deal if they elect him.”

He and Joe are in a competition to out spend each other for votes. That “spending” will be funded of course by many trillions in government bonds, which will be collateral for all the shiny new “dollars” the Fed will inject into “the system” – I mean the banks. Oh, and guess who is on the hook for all that debt. Do you think it is the Fed and its cronies? No, Virginia, it is the dear working shmuck also known as a tax payer, or as Goldman Sachs likes to say, “muppets”.

Here is Wolf Richter from WolfStreet again:

“Upon the news that Trump was trying to push the rug back under the stimulus talks in Congress, stocks related to retail spending soared today.”

Here is Wolf on the beneficiaries of all this “largess”:

“This bonanza today followed another billionaires-came-out-on-top report by UBS and PwC, cited by Reuters. The rally in stock prices since the stimulus and central-bank shenanigans kicked in globally pushed the wealth of just over 2,000 billionaires finally over the well-deserved $10 trillion mark, beating the previous record of $8.9 trillion at the end of 2019. Between April 7 and July 31, billionaires in the technology, healthcare, and industrial sectors saw their wealth (the many billions) increase by 36% to 44%. No billionaire’s billions left behind.”

What did Mr. Powell say again? Oh, that’s right – he claimed all this “stimulus” is meant to benefit “main street”. Hmmm.

Ever wonder how banks make a living in this absurdly low interest rate environment. Oh, that’s right – most households don’t have access to the same cheap credit that corporations enjoy. Their “credit line” is credit cards that charge 29 percent interest:

“How are banks supposed to make any money in this zero-interest-rate environment if their credit card assets that they charge 29% on are dwindling? That was a rhetorical question. Well, OK, that’s why the Fed gets frazzled when consumers pay down their credit cards. Let’s be honest, that’s abuse of stimulus.”

MOAR “stimulus”!

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