We Know More About the CIA Than the Federal Reserve

Judge Napolitano weighs in on the recent actions of the Federal Reserve, and asks why now is the opportune time to officially introduce the next round of quantitative easing:

The job of the CIA is to steal and keep secrets. We know far more about the CIA than we do about the Federal Reserve. Its members are appointed by the President and confirmed by the Senate, yet it's a private bank that makes its own money, regulates the economy, and can print money.

The Federal government doesn't print money.

The Federal Reserve prints money.

It's not federal. It's not a reserve. It's a private bank.

Why is it flooding the market with cash?

He's (Ben Bernanke) going to create out of thin air forty billion dollars in cash and put it in the accounts of the Federal government. That is more cash chasing, available for, the same amount of goods and service.

Answer: inflation.

What goes up first? The thing we use the most… Fuel, food….

In 2008, as Presidential election day was approaching, the rug was pulled out from under U.S. stock markets by restricting the flow of capital to banks and the broader economy. The crash and subsequent economic crisis was used as a means to torpedo John McCain's Presidential hopes and propel the policies of progessive socialists and Barack Obama into the spotlight.

It looks as if the Federal Reserve may very well be engaging in politics yet again, this time helping to maintain stock market levels. Barack Obama is in a close race with Mitt Romney, and a stock market crash would certainly put the final nail in the coffin of his campaign. The powers that be have decided that now is the time to pump more money into markets, which is strongly supportive of the current administration.

It's simple, really. If markets crash Obama is out and Romney is in.

Mitt Romney, for his part, has now come out against the Fed and called for transparency. He must know that they have conspired against him.

But is Mitt Romney really any different with respect to his position on the fractional reserve monetary system?

Today, this debasement that was at one time punishable by death is business as usual.

If you print money we call it counterfeiting and the punishments are severe.

When the Federal Reserve does the same thing we call it inflation and they are revered.

via SHTF Plan by Mac Slavo on 9/20/12

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QE3: Banks Already Drowning In Liquidity

It's become apparent that the "solution" to the growing complexity of the financial system is more complexity.  The Federal Reserve planning concept of fixing debt by adding more debt, especially as we just crossed $16 trillion in public debt last week. With a new QE round between $200 and $500 billion the world is drowning in liquidity.  In other words, not only is debt the fix to record debt, but liquidity is about to be unleashed on a world that is already drowning in liquidity. 

The bad news: everything being tried now will fail, as it did before, because nothing has changed, except for the scale, meaning the blow up will be all that more spectacular. The good news: at least the Keynesians (or is it simply Socialists now?) out there will not be able to say we should have just added one more [    ]illion in debt/liquidity and all would have worked, just as our textbooks predicted. Because by the time it's over, that too will have happened.

From JPM's Michael Cembalest:

"It has been a strange year. If you were concerned about the global economy this year, you were right:  

• Leading indicators of manufacturing, such as new orders, are weakening just about everywhere
• Chinese, Korean and Taiwanese exports are slowing sharply; China may be growing at only 6%
• European growth is ~0%, with the periphery in recession. Germany business surveys also fading
• Last week’s US jobs report was weak across the board (payrolls, work week, labor force participation and wages)
• US capital spending trends are slowing (e.g., capital goods orders ex-aircraft)
• Countries like Brazil are showing signs of industrial fatigue due to an overly strong currency in 2010-2011
• The US election does not look like it will bring clarity to the US fiscal/debt ceiling divide (polls show Democrats keeping the White House and Republicans keeping the House of Representatives)
• US housing is staging a modest recovery, but it’s not a game-changer given its smaller contribution to employment
• Corporate profits are high, but the trend in EPS revisions is negative and profits growth is slowing

However, global equity markets have done well, up 13% so far in 2012. The bottom line: with the world drowning in liquidity, the right portfolio moves this year have been to take advantage of low equity valuations, look through all the economic weakness and expect that continued monetary stimulus will  eventually bear fruit. We have done some of that but not as much as we might have, and as things stand now, global equity markets have outperformed what I had expected. The world’s Central Banks have made it clear that inflating their way out is preferable to the alternatives, an environment that is conducive to risky assets that are priced very cheaply, until and unless they lose control of inflation."

For those confused, Cembalest only added "unless" out of political courtesy, because as even the Fed itself admitted last night, first via St. Louis Fed's James Bullard and soon everyone else, the Fed has finally been exposed as being nothing but a puppet tool of politicians, who in turn have always been sponsored muppets of Wall Street (Who can possibly forget Chuck Schumer telling Bernanke to "get to work Mr. Chairman"). In other words, we now know politicians run not only fiscal, but monetary policy. How to hedge against this apocalyptic proposition? Simple. Cue Kyle Bass: "Buying gold is just buying a put against the idiocy of the political cycle. It's That Simple."

It really is.

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David Stockman: The Fed is the Heart of the Problem

Former Reagan OMB Director David Stockman was 'allowed' on CNBC this morning - much to their chagrin now we suspect - and espoused his own brand of truthiness, starting with this epic tirade:


"Ron Paul is the only one who is right about the Fed, and the Fed is the heart of the problem. They have destroyed the capital markets and the money markets; interest rates mean nothing; everything is trading off the Fed and Wall Street isn't even home - as it's now a bunch of computers trading word-clouds emitted by this central banker and that."

In this environment, he goes on, everyone is being given the wrong signal - i.e. the Ryan/Romney campaign is abnout restoring vibrant capitalism; how can you do that when the financial markets are dead - the lifeblood of a capitalist system. And that is the problem today.

An excellent discussion ensues diving into the lack of fiscal discipline (that is enabled by a Fed ZIRP) as "[politicians] will never do it when you can keep borrowing free-money forever" and summed up nicely with this subtle sentence:

"The Fed (and the lunatics that run it) are telling the whole world untruths about the cost of money and the price of risk."

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Prepare For The Coming Economic Collapse

Federal Reserve Chairman Ben Bernanke is not going to save our economy.  He supposedly didn't see the last financial crisis coming, and even after things started falling apart he continued to insist that that everything was fine. Housing prices would not go down and that we would not have a recession.

Wrong. We had the worst housing crash and the worst recession since the Great Depression of the 1930s.

But still millions of Americans are trusting him to save us this time around. It didn't happen in 2008 and it's not going to happen now.

One of the biggest flaws in our financial system is with the Federal Reserve system itself. The U.S. government is 16 trillion dollars in debt is because the system is designed to create gigantic amounts of government debt. And even if we replaced every corrupt and/or incompetent politician our economic problems would still persist.

Most Americans are pinning their hopes for an economic turnaround on the upcoming election, but the truth is that neither Obama or Romney has a plan that will fix it. The total amount of all debt in the United States has gone from less than 2 trillion dollars to almost 55 trillion dollars in 40 years...and 8 Presidents. Economic collapse is going to happen no which political party is in power.

It is very probable you could wake up one day soon and discover that because Ben Bernanke has printed trillions upon trillions of new dollars to "fix" the financial system your life savings have been devalued by 50 percent.

That may sound extreme but this is what millions of Europeans are extremely worried about right now. In Spain there has been a full-blown run on the banks. In July alone, 94 billion dollars was pulled out of the Spanish banking system - the equivalent of 7 percent of Spain's GDP...in one month!

Time is running out.  In fact, we might not have much time left at all before the next major downturn. September will be a pivotal month. Be ready.

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