There is a growing suspicion that the Federal Reserve of this era is as tone deaf, inept, and politically motivated in its decision making.
That suspicion is correct.
Federal Reserve Chairman Jay Powell will do exactly what Wall Street and the Biden Junta need today, inflation be damned in what will be perceived as a wishy-washy statement to initiate one more low volume rally heading into the Labor Day holiday. The Jackson Hole bankster event is the perfect place to do this as it gives Powell the cover to claim he was not pressured by the upcoming election nor the regime to keep the system juiced for the elites as inflation is not a problem for the 1 percent; not yet at least.
The belief that has been promoted by various Federal Reserve speakers for two weeks is that they will be firm against inflation but sensitive to the needs of the masses. In other words, pure babble, which is simply designed to protect the dollar as the global rebellion against the West spreads. This nonsense will be further expanded by a speech during the symposium which will start out as hawkish but end as dovish and soft as a new born baby’s butt.
The key to understanding how this is easy to predict is to review the price action on Wall Street yesterday:
Notice that during a low volume, sleepy August day suddenly the Dow and all of the other markets took off like a scalded dog suddenly between 2:30 p.m. and into the close. Weird how that happens.
Except that it has happened before. On August 16, 2007 the Federal Reserve tipped off its member banks, allegedly Goldman Sachs first per the internet financial media of the time, of an upcoming action that would happen outside of the normal Fed meetings on August 17, 2007 (from CNNMoney):
Fed cuts discount rate
The Federal Reserve, reacting to concerns about the subprime lending crisis that’s rocked financial markets in recent weeks, Friday cut its so-called discount rate half a percentage point, to 5.75 percent.
The discount rate, the rate the Federal Reserve charges qualified lenders, mainly banks, for temporary loans, is largely symbolic. The central bank did not change its more closely watched federal funds rate, which affects credit cards, home equity lines of credit, car loans and other consumer loan rates. That rate remains at 5.25 percent.
But one economist suggested that the Fed’s discount rate cut has more than token significance. David Wyss, chief economist with Standard & Poor’s, said the cut could help convince banks it was okay to keep lending to companies or consumers that actually are creditworthy.
“This is an important move. It’s not just a symbolic action. The Fed is telling banks that the discount window is open. Take what you need,” Wyss said.
And what happened to the markets on the 16th and 17th of August 2007? If you guessed a low volume Fed bankster rally, you would be correct:
And who apparently was first in line at the discount window?
The facts that confronted Goldman at that time were incontrovertible. They were having major issues with their hedge funds and this was in the era before taxpayer sponsored bail outs. Other banks were indicating problems with their mortgage divisions and real estate hedge funds but Ben Bernanke was never going to allow the system of that era to collapse in 2007.
The real estate market was in full collapse mode by that time but the media kept it covered up to the masses by telling the general population that housing was the “buying and investment opportunity of a lifetime. Meanwhile the internet financial blogosphere (including yours truly who was on radio at the time) of that time was warning that the entire financial system was at risk. Ironically, one of the papers at the Kansas City Fed Symposium of August 2007 reflected just how tone deaf the Fed was to the severity of the problem:
The Housing Finance Revolution, by Richard K. Green and Susan M. Wachter
So naturally the Fed was going to bail them out in secret and maintain the status quo, the masses be damned.
Fast forward to today and the truth is that only the elites and the system will be bailed out. The Fed will tolerate 7%+ inflation for another year plus to survive the elections and do anything they can to maintain a Dow Jones Industrial Average above 30,000. Unfortunately for the West and the Fed, global events once again will overtake their efforts but they might just save their precious mega-banks to so they can expand and swallow up their smaller competition during the upcoming economic “emergency.”
Prepare for one last rally unless Powell shocks the world. And once it fizzles out, look out below.
Out of control inflation, the liquidity crisis, and the decimated supply chain will once again become the headline story of the day by the end of September, leaving the Fed and the political elites wondering what to do next to contain the anger of the general public at their ineptitude while preventing the collapse of the Western financial system of the past 80 years.
The markets on Friday reacted as if Powell and the FED will keep the pressure on and not let off. I see that some pretty top rated hedge funds think that Powell means it at least until something serious blows up as it did in 2007/2008.
Meh. I have another article to follow up on that. It’s not what you think and it took some digging to find out the truth.
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