Recent history proves that the Fed's "control" is just an illusion.
Think back to the fall of 2007. The deflationary "liquidity crunch" that over the next year-and-a-half cuts the DJIA in half, decimates commodities, real estate and world markets is only starting. Almost no one believes that the crash is coming -- to a large degree, because everyone is convinced that the U.S. Federal Reserve Bank, with Ben Bernanke at the helm, will never allow deflation to happen: It can just print money!
The excerpt you are about to read is from EWI president Robert Prechter's October 19, 2007, Elliott Wave Theorist. If you find it insightful, read more of Bob's writings in the free Club EWI resource, "Robert Prechter's Most Important Writings on Deflation." (Details below.)
You cannot pick up a newspaper, turn on financial TV or read an economist's report without hearing that the Fed's latest discount-rate cut is bullish because it indicates the Fed's decision to "pump liquidity" into the system. This opinion is so completely wrong that it is hard to believe its ubiquity.More Here..
First of all, the Fed does not "decide" where it wants interest rates. All it does is follow the market. Figure 17 proves it. Wherever the T-bill rate goes, the Fed's "target rate" for federal funds immediately follows. That's all there is to it.
If you refuse to believe your eyes, then listen to the chairman; Alan Greenspan is very clear on this point.
Their looting of America however is not an illusion.
ReplyDeleteWe are all wages slaves to the Fed.
They are Master. You are Servant.
I think it is not as much a master slave relationship but a vampire victim relationship because the vampire hypnotizes you and then sucks the life out of you. The Federal Reserve has hypnotized people into using their fiat money and then the IRS fangs suck your blood.
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I hope this is just an Aprils fools joke, but I fear it isn't
Still can't make up your mind about inflation or deflation? Well, it doesn't make sense to post an article vehemently stating one reality to be imminent and we better be prepared one day and then the opposite stance another. Try not to be so alarmist and extreme every single post and you will get more mileage.
ReplyDeleteCurrency devaluation whether precipitated by capital flight due to fear or excess speculation relative to the industrial base functions separately of demand driven inflation. Demand can go to zero, yet prices for commodities (specifically precious metals) can soar concurrently. Hyperinflation, for example is not a demand-pull event, it is a foreign exchange event.
ReplyDeleteI find it rather entertaining that the promoters of deflation always fail to note the increase in the notional value of the derivatives market (especially over the last two years or so in Interest Rate Swaps). Of course Global OTC derivatives markets are so large to the extent that they are well under-collateralized while simultaneously providing support for asset and even Sovereign debt prices. Actually it is "speculation and manipulation" that provides the chief support to asset prices and Sovereign debt much more so than commodity prices at this juncture. The outstanding commercial net short positions in Gold and Silver for example are so great that the longs have quite a way to go before Gold and Silver can even be considered net longs. The real bubble is the US dollar and the US Treasury market, both of which are supported by the speculation of namely foreign investors.
HEY, DUMMIES, WAKE THE F UP! How many of you lost 40% of your retirement when the market crashed last time? Now people are throwing their money right back in for the next set up. Read Robert Kiyosaki's , the conspriacy of the rich, and learn from it. Also, buy a crapload of silver and dump your fiat dollars!
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