How Powell's Fed Exported Rampant Inflation and Destabilized the Entire World
After the Fed abused the world reserve currency by printing more than 80% of all USD under the guise of pandemic relief, the first international bank may fail since the GFC
"We are convinced that sustained growth in the United States — and much more — is dependent upon maintaining progress toward price stability over time. And given our weight in the world, that same stability must be one of the foundation stones of a prosperous and integrated global economy."
- Paul Volcker, February 1986
Jay Powell fancies himself a Paul Volcker acolyte. Whether in his heart of hearts Powell truly admires Volcker, we cannot say for sure. But we tend to think it’s an act. Volcker is everything Powell wishes he was. Volcker went to Princeton, but actually studied economy at Harvard. While a Princeton grad, Powell is a non-economist former Wall Street defense lawyer. Volcker had the backbone and integrity for hiking rates to around 20% over vociferous opposition and “Keeping At It” per his autobiography. Powell already spinelessly caved and bailed Wall Street out to the tune of tens of trillions last time he raised rates a bit and things got a little tough in 2019.
Powell is a politician at heart. He will say whatever he thinks the people really in power like BlackRock’s Larry Fink or Caryle’s David Rubenstein want him to say. This is the antithesis of Volcker’s message. It is far more akin to one Rudolf von Havenstein of Germany’s Weimar Republic. Like Powell, Havenstein repeatedly appeased the government’s profligate spending and printed and debased Reichsmarks right up until the end — hyperinflation.
So what do the shadow banksters/shadow government want now? They undoubtedly want a bear market relief rally to get better positioned for a crash. Things are starting to break quickly. As Wall Street on Parade recently reported, there is “Nowhere to Hide: The Fed-Induced Bubble in Stocks and Bonds Is Blowing Up; Even the Typical Safe Havens of Gold and T-Notes Are Losing Money”:
“A large Swiss, Global Systemically Important Bank (GSIB) [Credit Suisse] is just $4.14 cents away from trading at zero market value.
Two other GSIBs are not doing much better: Deutsche Bank closed at $8.34 in New York on Friday while Barclays closed at $7.08. Nomura, a primary dealer at the New York Fed, also traded intraday on Friday at an all-time low of $3.325 before ticking slightly upward to $3.37 by the closing bell.
This is an absolutely frightening situation to anyone who knows anything about how the fragility of the banking system and its gluttonous appetite for derivatives played out in 2008. It was the largest financial collapse since the Great Depression.”
This Friday, they all closed even lower with Credit Suisse CS 0.00%↑ at $3.92 and Nomura NMR 0.00%↑ at $3.30. Some of these names should sound familiar. The Fed bailed a select few firms out to the tune of $48 TRILLION in repo loans back in 2019-2020. The one thing in common? Massive overexposure to the opaque, risky $2 QUADRILLION derivatives cloud overhanging the global financial system.
We’ve done as much as anyone to try to bring attention to #RepoMadness and the incredible coverage by Wall Street on Parade. But major media outlets still adhere to a strict blackout. The only other notable coverage we’ve seen to date is a bitcoin.com article. It’s truly a bleak state of affairs.
Why does this all matter now? Well, an ABC journalist just reported that a “credible source” says a major international bank is on the brink of failure. Many believe that bank to be Credit Suisse. What will Jay Powell do if that happens? Will he spinelessly cave again? All signs point to yes (see e.g. the Fed’s new standing repo facility), despite Jay’s strong words less than a decade ago that “too big to fail must end.”
Many Wall Street and Fed shills will argue this is different. Like Bank of England stepping in with QE just a week after starting QT. This is a real financial crisis, and the Fed needs to provide emergency support. Hogwash.
Inflation rates remain out of control. Official reported rates are around 10% or higher for the UK and the Eurozone. This is, in no small part, because inflation rates in the WORLD RESERVE CURRENCY remain INSANELY HIGH. The #CPlie has been higher than 8% for the past six months! If the Fed spinelessly pivots, it may remain there or go even higher for the next six months!
The Fed has addicted the world to money printing and cheap debt. There is always pain when trying to wean addicts off drugs. But in the long run, it is the only way to regain some semblance of global stability.
And so when folks at the Fed like Vice Chair Brainard start to point to issues abroad as some bogus excuse for pausing or pivoting, just remember what a load of bullshit that is. The Fed pointing to inflation and instability abroad is like a drug dealer blaming the addict’s withdrawal symptoms as an excuse to keep peddling drugs. And they don’t give a shit if the working and middle class die from an overdose of inflation.
-#OccupyTheFed
You never cease to entertain and enlighten. Appreciate it so much - things will come into focus for more people over time, it seems to have started.
Excellent again. JPOW is not aware that inflation has a bigger effect for the 99% than the 1%? JPOW doesn’t understand that the top 1% can always buy what they need? But something that displeases the elite financial institutions? That’s a real crisis. That’s a suffering that cannot be tolerated. Even though those folks can still buy all the food, housing, transportation, electricity, heat, gas, that they need, and then some.