Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Investing in the METAVERSE Stocks Universe - 8th Dec 21
Stock Market Sentiment Speaks: I Expect 15-20% Returns For 2022 - 8th Dec 21
US Dollar Still Has the Green Light - 8th Dec 21
Stock Market Topping Process Roadmap - 8th Dec 21
The Lithium Breakthrough That Could Transform The Mining Industry - 8th Dec 21
VR and Gaming Becomes the Metaverse - 7th Dec 21
How to Read Your Smart Meter - Economy 7, Day and Night Rate Readings SMETS2 EDF - 7th Dec 21
For Profit or for Loss: 4 Tips for Selling ASX Shares - 7th Dec 21
INTEL Bargain Teck Stocks Trading at 15.5% Discount Sale - 7th Dec 21
US Bonds Yield Curve is not currently an inflationist’s friend - 7th Dec 21
Omicron COVID Variant-Possible Strong Stock Market INDU & TRAN Rally - 7th Dec 21
The New Tech That Could Take Tesla To $2 Trillion - 7th Dec 21
S&P 500 – Is a 5% Correction Enough? - 6th Dec 21
Global Stock Markets It’s Do-Or-Die Time - 6th Dec 21
Hawks Triumph, Doves Lose, Gold Bulls Cry! - 6th Dec 21
How Stock Investors Can Cash in on President Biden’s new Climate Plan - 6th Dec 21
The Lithium Tech That Could Send The EV Boom Into Overdrive - 6th Dec 21
How Stagflation Effects Stocks - 5th Dec 21
Bitcoin FLASH CRASH! Cryptos Blood Bath as Exchanges Run Stops, An Early Christmas Present for Some? - 5th Dec 21
TESCO Pre Omicron Panic Christmas Decorations Festive Shop 2021 - 5th Dec 21
Dow Stock Market Trend Forecast Into Mid 2022 - 4th Dec 21
INVESTING LESSON - Give your Portfolio Some Breathing Space - 4th Dec 21
Don’t Get Yourself Into a Bull Trap With Gold - 4th Dec 21
4 Tips To Help You Take Better Care Of Your Personal Finances- 4th Dec 21
What Is A Golden Cross Pattern In Trading? - 4th Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Impotent U.S. Fed 'Swings' Limp Appendage

Interest-Rates / US Interest Rates Aug 11, 2010 - 01:23 AM GMT

By: Alex_Wallenwein


Bernanke and the other Fed governors know they are out of bullets, and that even if they had any bullets left, there would be nothing to shoot them at. So, the next best policy option on August 10, 2010 was for them to at least appear to be doing “something” to assure financial markets and institutional investors that they could rest (in peace?) in the secure knowledge that, because the Fed is doing “something” at least, there must still be something it can do to make the economy all better.

Unfortunately, there isn’t.

Talking-head schmooze abounds on TV with indications and suggestions as to what they think the Fed might be able to do, and could do effectively, but astute listeners cannot help but come away with that empty feeling in the pit of their stomach – the same kind of feeling starving people get after a sumptuous meal of nothing but hot water. You know that feeling of fullness won’t last.

So, why is the Fed so impotent?

Because, as noted, it is out of options. It can lower its target rates by buying short and long term – or whatever term – treasuries, but interest rates are already near zero or at historic lows. It can further beef up its “balance sheet” (toxic waste dump) with more filth, but that balance sheet is already bursting at the seams and banks still aren’t lending. The bullets are gone, but the stampeding rhino that’s coming at it (and all of us) hasn’t budged or veered from its course. All Bernanke can do now is strike a heroic pose, pretend to aim his rifle, and yell “Bang! Bang! Bang!” as he tries to convince the markets that he has the situation firmly in hand. He does have something in hand – but it isn’t the situation, and whatever it is, it certainly isn’t firm.

The “stampeding rhino” is a healthy market adjustment destined to slough off all of the illusory excess of past decades of monetary profligacy. For the overall economy it’s healthy. For consumers and (most) investors, it’s short to medium-term painful but long-term healthy. For the Fed and the entire central fiat-banking scheme it so famously represents, it is certain death.

Imagine what will happen if massive deflation comes to world markets and there is nothing the US Fed - or any other central bank for that matter - can do about it. Imagine further that after it’s all said and done, and after people find a way to pick up the pieces and go back to work (as they always do), a true recovery spontaneously erupts without the Fed’s or other CB’s palpable input. What would happen to the Fed? What would happen to central fiat-banking?

You know exactly what would happen. By that time, there will be a very differently composed US Congress, and we might very well get a bill passed that will bring about real Federal Reserve ‘transparency’.

The most transparent things in life are those that aren’t there any longer.

Got gold?

Alex Wallenwein
Should Congress have unlimited power?

Copyright © 2010 Alex Wallenwein - All Rights Reserved

Alex holds a B.A. degree in Economics and a juris doctorate in Law. His forte is research. In late 1996, he began to research how money is used by some to exert political and economic control over others' lives. In the process, he discovered that gold (along with silver) is the common man's antidote to this effort. In writing and publishing the Euro vs Dollar Monitor, he explains the dynamics of this process and how individuals can harness the power of gold in their efforts to regain their political and financial autonomy.

Just like driving your car, investing only makes sense if you can see where you are going. The Euro vs Dollar Monitor is the golden windshield wiper that removes the media's greasy film of financial misinformation from your investment outlook. Don't drive your investment vehicle without it!

Alex Wallenwein Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in