Jim Willie: Fed Has Lost Control, Systemic Failure Flashing Warning Signals Now!
The
US Federal Reserve has been printing money since 2011 to cover USGovt
debt securities in a frenetic manner. They
have lost control.They
call it stimulus, when it is actually the opposite. It does assist
the speculators with nearly zero cost money to borrow, but one must
be a club member to win loan grants. The Quantitative Easing programs
are deceptive. When the program was initially announced, the Jackass
claimed it would be part of an endless sequence. With QE1 and QE2 and
Operation Twist and QE3, following the failed trial balloon called
Taper Talk, it is quite clear to anyone with an active brain stem and
absent rose colored glasses that the
USFed is caught in a trap called QE to Infinity.
It is not stimulative. Instead, the uncontrollable bond monetization
causes capital destruction. It causes economic degradation. It causes
lost jobs and vanished income. It
is a gigantic wet blanket to smother and destroy the USEconomy
slowly, amidst unending propaganda. QE
is the device that will result in Systemic Failure, which is already
flashing signals of its arrival.
Out of Ammo? The Eroding Power of Central Banks
Since
the financial crisis, central banks have slashed interest rates,
purchased vast quantities of sovereign bonds and bailed out banks.
Now, though, their influence appears to be on the wane with measures
producing paltry results. Do they still have control?
Once every six weeks, the most powerful players
in the global economy meet on the 18th floor of an ugly office
building near the train station in the Swiss city of Basel. The group
includes United States Federal Reserve Chair Janet Yellen and her
counterpart at the European Central Bank (ECB), Mario Draghi, along
with 16 other top monetary policy officials from Beijing, Frankfurt,
Paris and elsewhere.
The attendees spend almost two hours exchanging
views in a debate chaired by Bank of Mexico Governor Agustín
Carstens. Waiters serve an exquisite meal and expensive wine as the
central bankers talk about the economy, growth and market prices. No
one keeps minutes, but the world’s most influential money managers
are convinced that the meetings help expand their knowledge in
important ways. “We learn what makes our counterparts tick,” says
one attendee.
These closed-door meetings, which are held on
Sunday evenings, have a long tradition. But ever since many central
banks lowered their interest rates to almost zero, bought up
sovereign debt and rescued banks, a new, critical undertone has crept
into the dinner conversations. Monetary experts from emerging
economies complain that the measures taken by Europeans and Americans
are pushing unwanted speculative money their way. Western central
bankers say they have come under growing political pressure. And
recently, when the host of the meetings — head of the Basel-based
Bank for International Settlements Jaime Caruana — speaks in one of
his rare public appearances, he talks about “chronic post-crisis
weakness” and “risk.” Monetary institutions, says Caruana, are
at “serious risk of exhausting the policy room for manoeuver over
time.”
These are unusual words, especially now that
the world’s central bankers, five years after the Lehman crash, are
more powerful than ever. They set interest rates and control the
money supply, oversee governments and banks and, like Bank of England
Governor Mark Carney, are treated a bit like movie stars by the
public.
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