ND
NOV 16 19 SIT EC y POL
ND denounce Global-neoliberal debacle y propone State-Social
+ Capit-compet in Eco
ZERO HEDGE ECONOMICS
Neoliberal globalization is over. Financiers know it, they
documented with graphics
In a very real way, MMT is
already here...
The
Federal Reserve is now directly monetizing US federal debt.
But it’s not
terribly difficult to predict what’s going to happen next: the Federal Reserve
will drop the secrecy and start buying US debt openly.
At a time, mind you,
when US fiscal deficits are exploding and foreign buyers are heading for the
exits.
HOW IT’S
SUPPOSED TO WORK
Here’s how it’s
supposed to work when the US government issues new debt:
- If the US Treasury needs to raise new funds, it announces an upcoming auction of US Treasury bills/notes/bonds.
- A date for the auction is set.
- Various participants bid for those bills/notes/bonds (including ‘regular folks’ like you and me if we’re using the government’s Treasury Direct program).
- At a later date, the Fed can buy those US Treasury bills/notes/bonds. The various holders of that debt submit offers to sell, and the Fed (presumably) selects the best offers on the best terms.
The
Federal Reserve, under no conditions, buys Treasury paper directly. The Federal Reserve’s own
website still maintains that this is the case:
See Chart:
Board of Governors of the Federal
Reserve System
There are two important claims plus one assertion I’ve highlighted
in there, each in a different color:
- Yellow: Treasury securities may “only be bought and sold in the open market.”
- Blue: doing otherwise might compromise the independence of the Fed.
- Purple: the Fed mostly buys “old” securities.
So according to the Fed: it’s independent, it follows the
rules set forth in the Federal Reserve Act of 1913, and it mostly buys “old”
Treasury paper that the market has already properly priced in a free and fair
system.
But that’s not really what’s going
on…
WHAT’S
ACTUALLY HAPPENING
It’s now clear that something spooked the Fed badly in
September.
We still don’t know what exactly
went on, but the Repo
market blew up. While this was a clear sign that something big was
amiss, the Fed has not yet explained what the cause was, who needed to be
bailed out, or why.
And it’s not going to anytime soon. It recently announced
that its records on the matter are
going to be sealed for at least two years.
While the Fed is ostensibly a public institution, and yes
transparency should be extremely important — at least
to maintain the appearance that it’s being careful with public monies — the
Fed is prioritizing secrecy here.
Whatever’s going on has been serious enough for the Fed to
openly lie. And not just in regards to the repo market.
“It’s not
QE!” Fed chair Jerome Powell recently declared upon relaunching an asset
purchase program that has already expanded the Fed’s balance sheet by hundreds
of billion of dollars.
Given all the secrecy, obfuscation and lies, the Fed is now
in clear violation of the spirit of the Federal Reserve Act of 1913.
Recall from above that the Fed “only
buys Treasury securities in the open market”, meaning from other banks and
financial institutions. That’s how the Federal Reserve Act of 1913 is
written:
See Memo:
Let’s walk through an example that connects the dots here.
Just know that this is but a single example out of many.
[[ Open the source below to read the
example ]]
DATA POINT
#1
Each and every Treasury offering comes with an identifying
number called a “CUSIP” number (referring to the Committee on Uniform
Securities Identification Procedures).
On October 31st, 2019 the Treasury Department held an
auction for a series of 8-week T-bills with the CUSIP number 912796WL9.
November 5th, 2019 those T-bills
were “issued”, meaning that was the actual date that they were to become
active. Before that date, nobody had possession of them and nobody was
earning interest on them:
See Table:
From the Treasury Offering Announcement above, on November 5, 2019, $40 billion of CUSIP number 912796WL9
were issued to the market.
It’s worth pointing out that no money changes hands on
auction day (Oct 31 in this instance). It only
does when the bills are issued (Nov 5 in this case).
DATA POINT
#2
Looking at the Federal Reserve’s website, we can see what
they bought and when (but not for how much).
There we find that very same T-bill
with the CUSIP 912796WL9 showing up as having been purchased by the Fed Nov 5,
2019 — the very date of its issuance:
See Table :
OPERATIONS RESULTS
The Fed bought more than $4 billion of this CUSIP. If
these T-bills were out in the “open market” they weren’t there for long. At
most, less than a day before the Fed scooped them up.
Does it really matter if a big bank
sits ever-so-briefly between the Fed and the Treasury debt it buys?
The summary here is this: the Fed is buying US government
paper on the day it’s issued.
The Fed is
directly monetizing US debt.
Which means…
MMT IS
ALREADY HERE!
The debate over whether or not MMT (“Modern Monetary
Theory” see
here for background and discussion) should or should not happen is now
moot.
It’s already here.
Over the past year, the US
government has spent ~ $1.3 trillion more than it took in. To cover the
shortfall, it had to raid the Social Security piggy bank for (another) $276
billion and tap the “markets” for another $1.1 trillion.
See Chart:
CONCLUSION
This is a very serious and extremely important conversation
to have. But it’s not being had at all.
During Jay Powell’s last news conference, the Chairman of the Federal Reserve (and defender and
champion of the largest wealth transfer to the rich in world history) was not
asked a single question on this topic.
Nobody asked anything about the
extreme and accelerating wealth and income gaps, both direct outcomes of the
Fed’s policies.
Nobody expressed concern about the
Fed’s secretive actions, its direct debt monetization, or its violation of the
Federal Reserve Act.
The US media is toothless. I assume today’s journalists are
simply too afraid of losing their jobs to speak truth to power, and have
slipped into quiet acceptance of a mere stenographer’s role.
“Yes, Mr. Powell, you’ve reversed course and have started lowering
interest rates again, and have resumed growing the Fed’s balance sheet via new
QE. Oh yes, you’re right, it’s ‘not QE’. How silly of me. But despite those
emergency measures, the economy is ‘in a good place’ and we all should be super
optimistic? Got it. Yes, sir — very inspiring. Anything else?”
You’d think, given the enormous
troubles that tend to follow central bank debt monetization that there’d be
some curiosity on the topic, but no. No pushback from the media or
Congress, direct or tangential.
Meanwhile the Fed has tossed a
mind-boggling $285 billion of permanent new money into the “markets” over the
past couple of months, and is conducting daily operations that put additional
tens of billions of dollars of short-term money into the markets as well.
All while claiming everything is fine.
Sure doesn’t feel that way, does it?
…
In Part 2: Why The Risk Of A Correction Is So
High Right Now, we demonstrate why the faith today’s investors are
placing in the Fed’s ability to push prices ever-higher is dangerously
overextended.
Stock
gains have already zoomed way ahead of the Fed’s recent excess liquidity
measures, and it will not take much to topple them.
Click here to read Part 2 [[
Don’t charge: send a free copy to the Nation. I don’t charge]]
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According to the Fed and the deep-state on Wall Street, all is completely normal...
Recently, there has
been a parade of central bankers along with their lackeys on Wall Street coming
on the financial news networks and desperately trying to convince investors
that there are no bubbles extant in the world today. Indeed, the Fed sees no economic or market imbalances
anywhere that should give perma-bulls cause for concern. You can listen to
Jerome Powell’s upbeat assessment of the situation in his own words during the
latest FOMC press conference here.
Global
central banks have abrogated the free market and are in the practice of
repealing the business cycle and ensuring stocks are in a permanent bull
market. Massive and unrelenting
money printing is the “tool” that they use. The good old USA had its central
bank cut rates to 0 percent by the end of 2008 to combat the Great Recession;
and that paved the way for the EU to join the free-money parade by 2016.
And now
central banks actually want you to believe that multiple years' worth of global
ZIRP has somehow left asset prices devoid of any significant distortions. All is normal here, or so we are told. So, I
thought it would be prudent to shed some light on a few of those glaring
imbalances that should be obvious to all except a debased central banker. To be
blind to them screams of incompetence or mendacity--or both.
- Forty percent of Europe's investment grade corporate debt offers a negative yield and there are at this time $15 trillion worth of sovereign debt globally with a negative yield as well.
- The valuation of equities in the U.S. is now for the first time ever 1.5 times its phony and free-money-goosed GDP.
- Yet, at the same time S&P 500 margins and earnings are shrinking.
- The U.S. has increased its business debt by 60 percent since the Great Recession--it now totals $16 trillion, which is an all-time high in nominal terms and as a percent of GDP.
- Much of this debt has been used to buy back stock and reduce share counts to boost EPS. Corporate buybacks, which were illegal in the U.S. before 1982, will breach $1 trillion this year. As far as the Fed is concerned, issuing a record amount of debt to buy back stocks at record high valuations is just fine.
According to the BIS, 12 percent of businesses in the
developed world have become zombies--having to issue new debt just to pay the
interest on existing debt—this figure is also at a record. The average interest
rate on the U.S. 10-year Treasury Note prior to the Great Recession was about 7
percent. Today, this rate is a lowly 1.8 percent.
It appears central banks are completely oblivious to the
global bond bubble even though they are its very progenitor.
Continue reading at:
….
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THE PROFITEERS OF NEOLIBERALISM don’t have shame for the
explosive inequality they create in our country.. Taxing them to limits of decency is a national
demand
And that's
just the start: the Fed and the ECB will buy $420 billion in assets over the
next 6 months
====
With the S&P closing above
3,100 and the Dow sprinting higher in the last seconds of Friday trading to
close above 28,000 for the first time ever, one can
argue that the long awaited melt-up has finally arrived. What happens next?
See Chart:
Risk Appetite Momentum is at
historical highs
See other interesting charts like this:
See Chart:
OR THIS ONE…
See Chart
See more at
….
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The farm
deal is likely fake news according to these analysts.
====
Lithium is the Bolivian natural resource that caused the
military Coup against Evo M
“How can we talk about clean
energy if we’re using a
chemistry that is fundamentally hazardous and toxic?”
….
If this Comp explode some Bolivians will say “it is GOD punishment”.
====
US
DOMESTIC POLITICS
Seudo democ duopolico in US is obsolete; it’s full of frauds
& corruption. Urge cambio
"...people need to get out
of the fiat currencies in general and seek a real safe haven – and
that’s gold..."
====
"The
average American doesn’t think we have
to completely tear down the system and remake it."
====
The world will change drastically between 2020
and 2024...The timing
is right for everyone to understand what
Donald Trump is doing, and try to decipher the ambiguity of how he is is doing it...
====
"We will still be paying
the bill for these wars on terror into the 22nd century..."
----
Our complicity with terrorism became worse since Hillary made
‘business’ with one Saudi group of jihadists
in Lybia while other Saudi group was
killing our people in the embassy of Bengazi. Our later complicity with Daesh
genocide in Syria you can read it in The Insoluble
Contradictions of Daesh and the PKK/YPG
by Thierry Meyssan
====
Baltimore’ Police
is accused of ‘homicide’.. se
foto-graphic in the source
If you have plans on going to Baltimore for the holidays -- cancel them
immediately -- that's because the city is imploding on itself...
====
GOLD COIN can solve the ‘trade deal’ problem between
US-China
"... the possibility for a stablecoin payment network to quickly
achieve global scale introduces
important challenges and risks related to financial stability... "
….
We don’t want yuans and they don’t want USD.. SO, the solution is gold-coin
====
US-WORLD ISSUES (Geo Econ, Geo Pol & global Wars)
Global depression is on…China, RU, Iran search for State
socialis+K-, D rest in limbo
"US Dollar will collapse
soon."
====
SPUTNIK and RT SHOWS
GEO-POL n GEO-ECO
..Focus on neoliberal expansion via wars & danger of WW3
-Attorney
General Barr Accuses Congressional Dems of Systematic ‘Sabotage’ of Trump
Administration Que le
diria Adam Schiff a este Sr Charlatan?
.. No creo!
- US
Imposes Sanctions on Cuban Interior Minister in Connection With Venezuela -
Pompeo
Otro pedo de Pom-peo?
----
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NOTICIAS IN SPANISH
Lat Am search f alternatives to neo-fascist regimes &
terrorist imperial chaos
RT EN ESPAÑOL
…
…
…
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GLOBAL RESEARCH
Geopolitics & Econ-Pol crisis that leads to more
business-wars from US-NATO allies
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PRESS TV
Informativo del Middle East
- Italian pensioners gather in Rome to protest low allowance
- Pence aide: Ukraine call 'unusual and inappropriate'
- Iran's Leader supports government's gas price hike
- Yellow Vests mark one year of protests
- US says no plans to send asylum seekers to Guatemala
- Trump to Japan: Hike payments for US troops to $8bn
- Gas price hikes spark sporadic protests in Iran
- Lebanon PM hopeful withdraws candidacy: Reports
- Trump is ‘lawless,’ must be stopped: Tlaib
- PROGRAMS
- Yellow Vest Protests Anniversary
- Blue wave US 2020
- US, UK interference in Hong Kong
- Israeli-Palestinian conflict
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===
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