Category Archives: Federal Reserve Bank

The Fed Tapeworm Is ‘Tapering,’ Or So We’re Told

Debt, Economy, Federal Reserve Bank, Inflation

As if Quantitative Easing were not deceptive enough a term, now we have “tapering.”

The money mafia had been “easing” to the tune of $85 billion in monthly bond purchases. If they’ve admitted to this much, you can be sure it’s much more.

Now Federal Reserve watchers are suggesting that the Fed’s “$85 billion a month bond buying program” may be winding down to … “$75 billion a month.”

The consequence of Ben Bernanke’s non-stop monetary stimulus, of course, is a rise in prices, stocks included. Homes too. It should be obvious too that an increase in the price of an item is not the same as an appreciation in it value.

Easy Money, Soaring Stocks & A Stagnant Economy

Business, Debt, Federal Reserve Bank, Inflation, Middle East

Some in mainstream media are making good progress in connecting Ben Bernanke’s non-stop monetary stimulus to a rise in all prices, stock-market prices included.

The Fed’s monthly confetti of funny-money stands at “$85 billion total every month.” The Fed’s balance sheet reflects “more than $3 trillion.”

The Fed, explains Elizabeth MacDonald (Fox Business News), purchases mortgage-backed and Treasury securities from Fed dealers.”

You can see how hooked the market is to the central bank’s money printing — the correlation in fact is rather astonishing. It shows the government and the central bank’s power to create money, manipulate market prices, and transfer wealth. The market is powered ahead by a growing strength in corporate profits, too.

Richard Fisher, president of the Federal Reserve Bank of Dallas, is more than hip to the “monetary Ritalin” scam:

…And, for some, there is a deeply imbedded worry that the Fed’s contortion of the yield curve and cost of money cannot last forever, or, if it lasts too long, will eventually result in financial bubbles and/or uncontrollable inflation, adding another uncertainty to the plethora of uncertain factors that already plague them. “Credit is super-abundant and stock market behavior is conditioned not so much by the fundamental performance of its underlying companies but by increasing doses of monetary Ritalin.

Then again, if you listen to the likes of Shepard Smith (also on Fox News) or Brooke Baldwin (CNN) expatiate on the topic of a stagnant economy against the backdrop of soaring stocks—you’ll hear their extra curricula exhortation for The Ben Bernanke to keep those interest rates low. Lovely!

A Beautiful Neoconservative Mind

Debt, Economy, Federal Reserve Bank, Free Markets, Media, Neoconservatism, Republicans

The question, I guess, is rhetorical. Still, why does Frontpage Magazine describe Steve Moore, of the War Street Journal, as “One of the country’s sharpest economic minds,” who can “explains how conservatives can save America from left-wing destruction”? This introductory blurb is on the front page of FPM, today, April 2.

Here’s how I introduced this beautiful neoconservative mind on BAB, starting in 09.30.08:

Stephen Moore authored a book paradoxically titled Bullish on Bush: How the Ownership Society Is Making America Richer.

Yes, Bush was a bailout bandit”: “Bush’s ownership society, built as it was on quicksand, quickly metamorphosed into the bailout society.”

Bush lobbed his financial WMD first by nationalizing the heavily socialized Fannie Mae and Freddie Mac, another formality. …
Buried in Bush’s blather was a tacit acknowledgment that government’s deep infiltration of the mortgage and homeownership markets encouraged a laissez faire attitude toward lending and borrowing.
“Because [Fannie and Freddie] were chartered by Congress,” confessed Bush, “many believed they were guaranteed by the federal government. This allowed them to borrow enormous sums of money, fuel the market for questionable investments, and put our financial system at risk.”
Fannie and Freddie’s “charter” partners Bush exonerated.
Moreover, nowhere did Bush come clean about the continual expansion of credit by the Central and commercial banks. Loose monetary policy has caused interest rates to fall below the natural market rate, and had precipitated an artificial stimulation of economic activity reflected in the colossal malinvestment and misallocation of resources witnessed in the housing market.
The Bush government—and previous administrations—had eliminated the risks of mortgage lending. The subprime fiasco, in a nutshell, was a consequence of extending credit to the un-creditworthy, chief of who were minorities. “The Diversity Recession” is how VDARE.com commentator Steve Sailer has aptly dubbed the mortgage misadventure.
You had the Federal Housing Administration (FHA) colluding with the U.S. Department of Housing and Urban Development (HUD) to provide taxpayer-subsidized home loans to illegal immigrants, no questions asked.
You had the 1974 Equal Credit Opportunity Act, the 1975 Home Mortgage Disclosure Act, and the US Fair Housing Act are—all arrows in the quiver of the federal government and the Department of Justice, aimed at forcing banks to throw good money after bad by lending it to those with low credit ranking. Mainly minorities.
Under the guise of remedying (alleged endemic) root-and-branch racism, the State [under Bush] had legislatively removed the risks of mortgage lending, thus precipitating the housing bubble.

Magnificent mind Steve Moore wrote an entire book in praise of Bush’s role in that kind of “ownership.” Will anyone ever make Moore own that?

Being Establishment means never having to say you’re sorry (or atone for your mistakes).

Savers: You’re The Bank’s Bitch

Business, Constitution, Debt, Economy, Federal Reserve Bank, Political Economy, Private Property, The State

Lawrence E. Rafferty, guest blogger on Professor Jonathan Turley’s blog, confirms what those of us who cleave to the Austrian school of economics already know: The workings of fractional reserve banking guarantee one thing only: Your deposits are not your own.

Booster to the banks Stuart Varney, of Fox Business, stressed today that he believes with all his heart that the US Congress [the same intemperate group that has helped accrue the US government’s 17 trillion dollar debt] will protect the private property of American depositors from the state-sanctioned theft suffered by Cypriot savers.

Rafferty sunders the Varney pie-in-the-sky, revealing that,

“A joint paper by the US Federal Deposit Insurance Corporation and the Bank of England dated December 10, 2012, shows that these plans have been long in the making; that they originated with the G20 Financial Stability Board in Basel, Switzerland (discussed earlier here); and that the result will be to deliver clear title to the banks of depositor funds. ” NationofChange
The above article explains that most of us do not realize that when you deposit money in a bank, that it becomes the property of the bank and we become unsecured creditors of the bank! “Although few depositors realize it, legally the bank owns the depositor’s funds as soon as they are put in the bank. Our money becomes the bank’s, and we become unsecured creditors holding IOUs or promises to pay. (See here and here.) But until now the bank has been obligated to pay the money back on demand in the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into “bank equity.” The bank will get the money and we will get stock in the bank. With any luck we may be able to sell the stock to someone else, but when and at what price?” NationofChange
If I deposit $1,000 dollars in my local bank, I trust that the funds are safe and protected by FDIC insurance and that even if the bank fails, I will get my money back. Under the plan listed above, we may not even be able to fall back on the FDIC insurance coverage. The FDIC-Bank of England plan would supersede our FDIC coverage and we would be relegated to become a “shareholder” in the failing bank or its successor entity. Let me see if I understand this scheme. The bank who is failing due to mismanagement or due to risky investments could steal my funds and force me to accept stock in a company led by poor businessmen with an even poorer business record! If you are brave enough, check out the full FDIC-Bank of England plan here.
Cyprus wasn’t the only place where a bankster grab of deposits was put into place or is being discussed. It is being discussed in New Zealand as well. “New Zealand has a similar directive, discussed in my last article here, indicating that this isn’t just an emergency measure for troubled Eurozone countries. New Zealand’s Voxy reported on March 19th:

Read Rafferty’s complete report.

Yippee! For your “hard earned deposits,” you’ll receive shares in a bankrupt, banking institution.

As Lew Rockwell put it recently, the most patriotic thing one can do is to partake in a run on the bank.

Before the fact, of course.

Moreover, and as I’ve long argued, thanks in no small part to Congress, various global agreements, mediated by a global bureaucracy—these embroil individual Americans absent their consent—have usurped the US Constitution and the power of Congress.

International treaties are often nothing more treason tarted up.