For years, alternative economic analysts have been warning that the “miraculous” rise in U.S. stock markets has been the symptom of wider central bank intervention and that this will result in dire future consequences. We have heard endless lies and rationalizations as to why this could not be so, and why the U.S. “recovery” is real. At the beginning of 2016, the former head of the Dallas branch of the Federal Reserve crushed all the skeptics and vindicated our position in an interview with CNBC where he stated:
“What the Fed did — and I was part of that group — is we front-loaded a tremendous market rally, starting in 2009.It’s sort of what I call the “reverse Whimpy factor” — give me two hamburgers today for one tomorrow. I’m not surprised that almost every index you can look at … was down significantly.” [Referring to the results in the stock market after the Fed raised rates in December.]
Fisher continued his warning (though his predictions in my view are wildly conservative or deliberately muted):
“…I was warning my colleagues, “Don’t go wobbly if we have a 10-20 percent correction at some point. … Everybody you talk to … has been warning that these markets are heavily priced.”
Here is the issue — stocks are a mostly meaningless factor when considering the economic health of a nation. Equities are a casino based on nothing but the luck of the draw when it comes to news headlines, central banker statements and algorithmic computers. Today, as Fischer openly admitted, stocks are a purely manipulated indicator representing nothing but the amount of stimulus central banks are willing to pour into them through various channels.
Even with the incredible monetary support pooled together by international financiers, returns on equities investments continue to remain mostly flat. It would seem that the propping up of indexes like the Dow has been only for the sake of keeping up appearances. For many people, revenue is barely being generated.
Unfortunately, the majority of Americans do not care to educate themselves on the finer points of finance. Their only relation to the health of the economy is their daily glance at the Dow. If it is green, or at all time highs, they assume that all is well, even if their gut is telling them something is not quite right.
The elites that stand at the helm of the Federal Reserve understand this dynamic very well. They are not stupid. They know that the whole of the global economy could be in a shambles but as long as stocks remain positive the masses will continue to ignore reality until the flames of destabilization are at their very doorsteps.
With this fact in mind one might think that the Fed would consider it in their best interest to keep stimulus measures operating indefinitely; but that is not what they are doing.
In fact, the Fed along with other central banks like the ECB has been slowly peeling back pillars of support from markets that have been in place since 2008-2009 and leaving the system open to a crisis event that should have been dealt with years ago. I examined this process of deliberate destabilization in my article 'The Global Economic Reset Has Begun.'
In that piece I outlined the three major pillars holding up the U.S. market system and certain parts of our economy and how they were being systematically removed. The first pillar was the use of bailouts and quantitative easing measures. These were diminished through the implementation of the Fed “taper,” which I predicted would happen three months prior that year.
The second pillar was the use of near zero interest rates, which allowed numerous banks and corporations to access low-cost and no-cost overnight loans from the Fed. These companies then used these loans in large part to support a never-ending program of stock buybacks, which reduced the stock pool and artificially boosted the values of the remaining stocks. I predicted in August of 2015 that the Fed would hike interest rates and that this would be the beginning of the end for the stock buyback bonanza. The Fed hiked rates in December of that year.
This process of removing backdoor manipulation through low interest rates should be our main concern right now. Early in 2016 I believed that the Fed would reach a position in which it would finally unleash a series of rate hikes. I did not think they would be so blatant as to wait until right after the U.S. presidential election to do so. I was wrong.
This is why I eventually predicted the launch of a series of rate hikes starting right after the election of Donald Trump in my article 'World Suffers From Trump Shell Shock — Here’s What Will Happen Next.' The Fed has now once again hiked interest rates with assertions that they will be “accelerating” such hikes throughout 2017.
As I have been arguing for most of the past year, the election of Donald Trump was inevitable and would precede the triggering of the final stage of our ongoing economic crisis. I came to realize that the Fed’s timing of their latest rate hike is highly strategic. Not only does it set the stage for a series of hikes that will crush U.S. stock markets this coming year and finally shock the public out of their fiscal stupor, but it also maneuvers the crisis right into the lap of Donald Trump and the conservative movements that support him.
Beyond this, it perpetuates an increasing Left/Right division in America. Think about it — during a fiscal crisis under Trump, tiggered by accumulating Fed rate hikes, liberals will immediately set upon Trump as the culprit, while conservatives will immediately defend Trump as a victim of Federal Reserve meddling.
The Federal Reserve and the mainstream media are already composing the narrative by stating that Trump's potential economic policies and a widening budget deficit would REQUIRE higher rates at a faster pace in order to be accommodated.
I have heard arguments from some that this tactic would simply not work. That people would “never buy” a narrative in which Trump and conservatives are blamed for a market collapse that was at least eight years in the making. I have to say, this view is incredibly naive.
I understand why people would want to embrace the notion that the public is as savvy as the liberty movement when looking at economic events, but this simply isn’t reality. A large portion of the U.S. population identifies with the “Left” end of the political spectrum. We have already seen how they react in the face of a Trump election win. They are predisposed to believe that Trump is responsible for a market crash regardless of the facts. Not to mention, much of the rest of the world is economically ignorant and will likely jump on the anti-conservative bandwagon during a crisis as well.
But the real master stroke of this strategy on the part of the elites is that it creates the perfect platform for the destruction of the U.S. dollar’s world reserve status — the third and final pillar I mentioned months ago that is supporting our economic system.
Imagine that the Fed’s rate hike frenzy sparks an open feud between the central bank and Trump? Some people might say “Good! Shut the bastards down!” However, this is exactly what the elites want. With the Fed “at odds” with the president of the U.S., faith in the U.S. dollar will plummet. Its world reserve status will be destroyed. And instead of being blamed on central banks, the majority of people around the world will claim it was the fault of Trump.
With a historically sufficient excuse for the end of dollar dominance in hand, the elites can move forward with their great global reset, which includes the replacement of the dollar with the IMF’s special drawing rights as the go-to reserve currency mechanism. The SDR basket is an essential bridge in the formation of a single global monetary authority and a true single global currency.
I believe that the Fed will not only continue hiking interest rates throughout 2017, but that some of these rate hikes may be LARGER than many people expect (50 basis points or more). I believe this will be designed to foster extreme tensions between the executive branch and the central bank.
A few months ago I would have said that Trump may or “may not” be aware of this dynamic and the potential that he is a scapegoat. Now that I have seen Trump’s cabinet picks which include neo-con and Goldman Sachs alumni, I have little doubt that he is fully cognizant of the plan. I will be writing more on the issue of Trump as a "Trojan horse" in my next article. In the meantime I would point out that all of the elements of psychological support for stock markets will also disappear in the face of a Trump verses establishment narrative.
All those leftist media outlets cherry picking economic stats and telling half truths to support the recovery lie now have no reason to continue cheerleading for the economy. I expect that propaganda rags like Reuters and Bloomberg will quickly change their tune with Trump in the Oval Office and begin a consistent chorus of negative financial data. Not only will the Fed remove all support from the system, but the mainstream media will be pounding day traders with the kind of “doom and gloom” headlines that they have been criticizing us for over the years.
Make no mistake, the election of Trump may have some in the liberty movement ready to pack up their preps and forget about any national crisis in their lifetimes, but the truth is, vigilance is needed now more than ever. I said it before the election and I’ll say it today — do not get comfortable; the times are about to get even more interesting.
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Comments (75)
written by Suparuk , December 22, 2016
You have right Brandon, now the joke is clear, you think Putin is globalist too ?
written by Sammy , December 22, 2016
Brandon, which timeline do you see for the events which you have brilliantly described?
I would guess that immediately after the inauguration of Trump, a significant and harsh 'shot' will be fired to set the stage for the scenario ahead?
written by Mang , December 22, 2016
Brandon...the writing on the wall doesn't look good for individuals that rely on equities for their retirement funding source...based on your predictions of what's coming, what would suggest as way to protect those assets...appreciate your comments...sincerely GM
written by Sammy , December 22, 2016
By the way Brandon you know that I pay attention to the pictures which you usually attach to your articles.
This picture of Trump is really nice.
I can't help myself but you've got to love this guy, no matter his agenda.
written by Kauf Buch , December 22, 2016
You write, "We have already seen how they (the U.S. population you claim identifies with the “Left” end of the political spectrum) react in the face of a Trump election win"...
...but you seem to disregard the fact that "the U.S. population" ELECTED TRUMP. You also seem to inflate the numbers of "professional whiners" who are "reacting" to Trump's election win.
With that, I mean to suggest there is a greater chance of general populace skepticism of the "blame Trump/the Right" blather that will/would come from the media.
written by solider , December 22, 2016
Great article Brandon. I think we just misunderstood each other. I perfectly agree with your statement here:
"Beyond this, it perpetuates an increasing Left/Right division in America. Think about it — during a fiscal crisis under Trump, tiggered by accumulating Fed rate hikes, liberals will immediately set upon Trump as the culprit, while conservatives will immediately defend Trump as a victim of Federal Reserve meddling."
I do believe it will be largely 50/50 split or so. I do believe most conservatives and libertarians will know Trump had almost nothing to do with the upcoming crash. In light of the lefts sheer stupidity following the election, I also see now that no amount of facts and evidence will convince the radical left. They are beyond redemption but in a hard core crash you cant argue with starvation. You find a way to get food or you die. plain and simple. Believing such things as anyone can use any bathroom will not trump food storage and food prep.
Great article. Hopefully because of people like you, history may yet not end up as the elites want it to.
written by Brandon Smith , December 22, 2016
@Kauf
I haven't "inflated" anything, and you clearly did not pay attention during the election, or you do not understand how elections work. I'm guessing you are not an American citizen.
Trump was elected by the electoral college, not the "U.S. population". Over 65 MILLION people voted for Hillary Clinton - a considerable portion of the population that is inclined to support a negative view of Trump. I never said anything about "professional whiners"; I suggest you refrain from strawman arguments.
As far as a "greater chance of general populace skepticism", that is your opinion, and it is not based in reality. When you can show me examples of the millions of Democrats and people on the left in the U.S. allowing Trump the benefit of the doubt, then maybe I can take you more seriously.
The blind faith that some people have that Trump will simply prevail over all is a little disconcerting. I am reminded of the naivety surrounding the Obama campaign, but it's somehow worse when conservatives desperately clamor for a white knight.
written by solider , December 22, 2016
How hard core do you envision collapse getting Brandon? Like 2008 times 2 or so or literally like Mad Max road warrior with 90 % of us dead from starvation and UN bringing troops in to fight us etc and local warlords emerging with hocky masks to enact local tyranny like lord humongous. I am curious to see just how bad you envision it getting. Or are the elites immediately ready with their solution and maybe 10 percent of us die instead of letting it get mad max?
Also timing. So 2017 is the final year of somewhat normalcy and the SHTF for real in early 2018? That seems to help give enough time to also help with the narrative its all trumps fault.
Also do you firmly believe trump is a 100% traitor and fully committed to being with the elites and enjoying having 90% of us dead and desperate? details on trumps level of evil you see in him would be appreciated.
written by Wayne Hayes , December 22, 2016
Really looking forward to your next article explaining why you believe Trump is in on the plan.
I would have thought he was an unwilling participant because I naively thought he genuinely wanted to rebuild America.
That was probably a silly assumption on my part. But more importantly that that, his ego. Trump might be a man of surprises but we know one thing for sure is that he has a massive ego.
written by Wayne Hayes , December 22, 2016
(apologies Brandon, I only pasted half my comment in)
Really looking forward to your next article explaining why you believe Trump is in on the plan.
I would have thought he was an unwilling participant because I naively thought he genuinely wanted to rebuild America.
That was probably a silly assumption on my part. But more importantly that that, his ego. Trump might be a man of surprises but we know one thing for sure is that he has a massive ego.
So the idea that he would willingly accept the role as fall guy is surprising to me. He would need a really thick skin for that and a thick skin is something he has shown that he doesn't possess. So I am very much looking forward to that next article of yours. I'm sure you have solid reasons.
Also, what do you make of the tensions between the CIA and Trump? Do you think it is real or is is hand bags and theatre?
written by Dupeydip , December 22, 2016
Seconded. I would like to know Brandon's thoughts on this too.
written by NH Watcher , December 22, 2016
that Trump is not a card-carrying member of the Elite, he has rubbed shoulders with them for more than 40 years. All of his endeavors have been financed by them, and since the Elite do nothing without giving some form of heads up, it is not surprising to conclude that Trump knows full well what is coming. He is also a family man, and wants to protect his own family. Whether the Elite bunkers are in space, Antarctica, or underneath the Denver airport, Trump (I'm sure) has already "made a deal" (isn't that what he is most known for?)
Most conservatives who voted for him have little prepared, nor have much interest in the Liberty Movement. They will be as desperate as the next guy, when all hell breaks loose. Brandon has lectured repeatedly on mass psychology, and we would be remiss to discount the notion that people may change their opinions in lightning speed if their lives (or, more importantly, their children's lives) are at stake.
The same Jews who celebrated and welcomed Jesus into Jerusalem on Palm Sunday, hailing him as their king, were the same Jews who condemned him and demanded his death in place of a thief only a week later. (And, no, I do not believe all the world's problems are because of the Jews.) My illustration is to show how quickly one's opinions of a man may change.
The Elite's end game is one world government, one world currency, and one world religion. The only way to that is population control, and so, the vast majority of us must be eliminated. If we place our faith in the Elite, or in any one man as antidote to the Elite, we will surely perish.
God help him if Trump has already made his deal with the Devil ... but if so, our only choice is not to follow course.
written by stevenguinness , December 22, 2016
Brandon, very much enjoyed your article. I agree that the fed will likely raise rates again into 2017. Do you see them going up again in February or after Trump has been in office for a month or so?
Looking back on the rate rise in December last year, the market reaction come January was the worst start ever to a new year for stocks. Quite a few analysts think the same thing will happen again - notably Michael Pento - in that come January 2017 stocks will suffer a massive sell off. I don't think they will. I see the markets rising into January leading up to Trump's inauguration.
If markets were to turn negative next month, would it make it harder for the Fed to raise rates amidst fluctuating stocks and uncertainty? If they are to raise rates another 2 or 3 times, do you think that would be during markets going up as opposed to them turning red?
Would be interested to read your thoughts.
written by Frank W. Hooper , December 22, 2016
Half of republican voters are Faux conservatives who are as Dis-Mis- and Mal-Informed as the left who don't like Trump but will rejoice in Him cracking down on the useless eaters on the left whom they will see as the cause of said crash. The vast majority of adults seem to get their talking points from FOX or THE VIEW so we have a case of the misinformed telling the uninformed who become the ill informed.
I don't trust Trump but I also don't think he has a massive ego or that he is a narcissist. I also don't think our mess could be fixed now even by the well intended.
written by Polar Gold , December 22, 2016
I thought the President nominated the fed chairperson and from what I read on Wikipedia she is up for re-election in February 2018.
written by L.Y. , December 22, 2016
Thanks for this article. I can´t understand how somebody think, that election can change systematic corruption and centralization. I am from Slovakia(former czecho-slovakia socialistic country, but they-bolsheviks still rule, now it is through financial groups, non-market privatization and still corrupt politicians hand in hand with Brussels idiots) and I told you, you can vote for anyone, nothing will change, when you live in a centralized system. They know that majority are unable to refuse their corrupt system. Sorry for my english and I wish you merry Christmas.
written by Brandon Smith , December 22, 2016
@Polar Gold
That is what the Fed claims, however, what they don't mention is that the central bankers CREATE the list of people that is handed to the president when he "selects" the new Fed chair. Also, if the president has been placed by the elites, then it does not matter - he will "choose" whoever they tell him to choose.
written by Polar Gold , December 22, 2016
That is what I thought - thank you have a safe and very merry Christmas and New Year.
written by Frank W. Hooper , December 22, 2016
I keeping with the topic, the Corbett Report on you-tube just put up something regarding the infrastructure for a world tax system is being laid. Just coincidence i guess.
written by Gorman , December 22, 2016
Trump = Putin's useful idiot + China's perpetual serf-debtor
Trump was SELECTED to become the next president simply to preside over the BANKRUPTCY OF THE UNITED STATES.
End of story
written by Raj , December 22, 2016
Hi Brandon,
It is always good to be a sceptic and be more vigilant when it is your 'guy' at the helm for a functioning democtratic republic but I don't see the gloom and doom with the rate hikes. The US economy was very strong in the 80's with the high rates mainly because of lower taxes and sensibke regulation. We will have even more of that in the coming years. Also, USD will only strenghen with higher rates in relation to NIRP/ZIRP currencies (pretty much every other western currency).
Yes, the stock market is not a true indicator of the real economy and it will severely correct in the coming months but I am bullish with regards to the overall US economy.
Trump may have appointed Goldman people and other billionaires but his rhetoric to drasticalpy cut corporate and personal taxes and regulation has not changed one bit. So long as his supporters can keep him in line with regards to thise 2 things and replacement of Obamacare, we should be okay.
Cheers.
written by jknbt , December 22, 2016
the super-rich globalists own the fed and the other large central banks...they punished the US with recessions in response to conservative policies & threats to audit the fed...see: http://www.usatoday.com/story/.../93976832/
if the US moves back into economic policies of "US first" type nationalism, they will wreck the economy in response to make Trump & Republicans look bad and lose their jobs in 2020 or 2024...
written by Brandon Smith , December 22, 2016
@Raj
There is absolutely no chance that Trump will be able to save the economy after 8 years of fiat stimulus and 10 Trillion in added debt (official debt). This is not the 1980's.
written by Zap , December 22, 2016
I had been predicting for years the crash would be engineered in the run up to the election as in the case of the dot con and housing bubble crashes because that creates even more of a divide, confusion and political spin about who did what and we know how these people love to create the divide......Clinton did it!...No, Bush did it!!.....Bush did it!.....No, Obama did it!
But seeing as they likely want Trump and the conservatives to take full blame this time around I suppose that is why they did not do that this time around.
written by Arbitrage , December 22, 2016
Hi Brandon,
So who are the global elites? Names?
BTW, I'm reading "Tragedy and Hope".
written by 4th-Turner , December 22, 2016
So let me suggest that there may be something else at play here: the saecular cycles as proposed by Strauss & Howe in their 4th turning work. Based on this, let’s revisit 1938:
“It was the ninth year of the Fourth Turning. The Great Depression was still in progress. After a few years of a faux recovery (stock market up 400% from the 1932 low to its 1937 high) for the few, with the majority still suffering, another violent leg down struck in 1938. GDP collapsed, unemployment spiked back towards 20%, and the stock market crashed by 50%. The hodgepodge of New Deal make work programs and Federal Reserve machinations failed miserably to lift the country out of its doldrums. Sound familiar? The average American household had not seen their lives improve and now the foreboding threat of war hung over their heads.” — from https://www.theburningplatform.com/2015/10/31/war-of-the-worlds-2/
Where are we now? About to enter the 9th year of our current 4th turning [ie socio-economic winter time which tends to last about 2 decades] which started in August of 2008.
Again, reflecting back on the last socio-economic winter time, it started in October of 1929, and although Strauss & Howe list the end of WWII as the end of that winter period, I’d suggest that the winter didn’t turn to spring until some time during & after the reconstruction phase in Europe after the war, 1949. Based on this ~2 decade long socio-economic seasonal cycle, we’re not even half way through this current winter of our discontent.
The Jim Quinn posting that included the quoted paragraph goes on to say how the bad news of the times and especially 1938 primed much of the public to believe the War of the Worlds radio broadcast by Orson Welles— that aliens were invading New Jersey. Some more poignant quotes from his posting:
“It seems our society will always have a large swath of people who will believe anything they are told by the media or the government. Our government run public education system now matriculates millions of functionally illiterate zombie like creatures into society, who can be easily manipulated and controlled through the use of mass media and false propaganda. Those who constitute the invisible government behind the Deep State duly noted the psychological power of fear during this episode in history.
Fear is a potent emotion to manipulate by the ruling class among a populace incapable or unwilling to think for themselves. The men behind the curtain, after decades of perfecting the psychological methods of molding the opinions, tastes, and ideas of the masses, believe they can control society through the use of fear. In 1938 Americans feared Germans, economic hardship, war, and evidently Martian invasions. Today they are taught to fear phantom Muslim terrorists, Russians, Chinese, Iranians, gun owners, anyone who questions government overreach, and anyone who disagrees with the social justice warrior agenda. The father of Propaganda, Edward Bernays, portrayed it succinctly in 1928:
‘In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons…who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind.’”
written by Texian , December 22, 2016
Ok, we already know what the problem is. I was trained to not approach a higher rank to complain about a problem unless I already have a possible solution to the problem.
Sir.. So if the dollar loses world reserve status, what about Trump also immediately abandoning the dollar and starts to print "United States Notes" exclusively for use inside our borders (but not in a Weimar Republic way, only in amounts that can be backed by hard reserves and retrievable natural resources). It might not be a painless solution (as it will piss off international debt holders for one) but it's better than just sitting in our foxholes.. Sir.
written by californiawoman , December 22, 2016
@Brandon
Any thoughts about investing in gold and silver, especially in view of what is happening in India?
thx
written by AL KIPF , December 22, 2016
"A large portion of the U.S. population identifies with the “Left” end of the political spectrum."
That's a broad statement. I believe in this case you mean economically.
A large portion (the majority) of the U.S. population does not identify with the rampant bolshevism (of the left/right dialectic) since 9/11. Hence, the election of the Donald.
written by Bryan J , December 22, 2016
As we know, Trump appointed ex Goldmansachs members as secretaries. What do you think about this?
written by Gary Marshall , December 23, 2016
Interesting article. You get some things right and some wrong. The Fed has little effect on interest rates save by entering the markets and lending, adding to bank reserves. The Fed has increased bank reserves by about $3.2 trillion since 2007. This means that bank deposits should increase by $32 trillion to compensate with a 10% reserve ratio. They have not. With a massive increase in reserves or the supply of mone and little increase in bank loans or demand, interest rates have remained below true inflation rates.
Now US dollar reserves held in US debt are being sold because a number of nations are deep in debt and need cash. Because of the bond sales and corresponding interest rate rises, the Fed is insolvent and cannot continue increasing reserves.
So US interest rates are going up and nothing will stop it. This is what happened after the Reagan election. Hell is coming. The Fed would leave interest rates low, but Trump ' election has accelerated the rise in market rates and stronger demand for dollars. It is not a socialist conspiracy, but market rates trending back to normalcy.
written by Brandon Smith , December 23, 2016
@Gary
That is incorrect. The fed dictates the interest rates on overnight loans, which is the primary concern I was discussing. People can debate whether or not the Fed's interest rate hikes effect other forms of debt and by how much, but the bottom line is that the overnight loans that banks and other international corporations have been relying on to sustain their stock buyback bonanza are now no longer affordable. Stock buybacks will crumble and cease next year, and the stock market will implode as a result.
Also, the Fed will only EVER be insolvent on the day that the dollar loses world reserve status. Until then, they will print whenever they please. The Fed has not in any way been forced to raise rates. They have done so by choice. Period.
written by Brandon Smith , December 23, 2016
@AL
65 Million people voted for Hillary Clinton. I'm sorry, but I consider those people leftists until they prove to me otherwise.
written by Brandon Smith , December 23, 2016
@Texian
Google "Alt-Market" and "Solutions"; I have written numerous articles on my own solutions to the economic problem.
Regards.
written by Brandon Smith , December 23, 2016
@Arbitage
I suggest you start with the membership rosters of elitist institutions such as the CFR, the Trilateral Commission, the Bilderberg Group, Tavistock, Rand Corporation, the IMF, the BIS, etc. Also, anyone who openly calls for globalism is probably a globalist.
written by WayneoftheClanArmstrong , December 23, 2016
The script has been flipped politically but it is just the other side of the same coin as the international financiers will continue to dominate the halls of power.
The world will become Greece, hopelessly indebted to the IMF and asset stripped as a result.
Islam is not compatible with the globalists vision of the future. They are being set up to pay the villains of the piece.
written by Gary Marshall , December 23, 2016
The only way to affect interest rates is to participate in the financial markets. Prior to 2008, the Fed rarely intervened as it was denoted dangerous to borrow from the lender of last resort repeatedly. Markets and the demand of and supply of money determined the real overnight rate. The Fed may have had an official overnight rate, but the rate given was often negotiated.
The Fed may become insolvent like any bank through the issuance of bad loans. It is in this position now having bought Treasuries at the max possible price. As the prices fall, so does the equity of the Fed.
written by Brandon Smith , December 23, 2016
@Gary Marshall
This is not Pre-2008. Your concept of the relationship between the Fed and markets is outdated, to say the least. The Fed determines overnight rates. Period. The markets have nothing to do with the process. The Fed can choose to negotiate or not negotiate. This idea that the Fed somehow operates on free market-style principles is simply false and will never be proven because it does not happen.
My point remains. The fed will raise rates on overnight loans and kill stock buybacks. Rationalizing a way out for markets does not mean the fed will give them a way out. Trying to relieve the Fed of culpability will not work. THEY dictated the timing of the rate increase and Trump's presidency is merely a foil for their program of instability. It is indeed a conspiracy.
The Fed also does not have "equity", and never had equity. It has a printing press. They create false equity out of thin air. Again, the fed cannot be insolvent as long as other nations and central banks accept dollars as the world reserve. Only when they stop will the fed become "insolvent". Treasury issuance has NOTHING to do with Fed solvency. The Fed is able to print regardless of bond values.
written by Sammy , December 23, 2016
ABN AMRO: Federal Reserve may hike four times next year
http://www.cnbc.com/2016/12/23/abn-amro-federal-reserve-may-hike-four-times-next-year.html
written by NH Watcher , December 23, 2016
Brandon has written at length about the virtues of bartering and knowing what you have in your own personal life, available to barter in the face of an economic collapse. We must think outside the concept of fiat money totally.
The current US dollar, once world reserve status is lost, will implode overnight. Any replacement "internal" dollar (to be used on the US mainland only) will be worth far, far less ... most conclude 30% or less of the current US dollar value.
So, you have $300,000 in the bank. Converting to "internal" dollars, that savings now is worth $90,000 or less, at best. (Forget about FDIC guarantees!) You are paid $2000 biweekly at your job; now adjust to a biweekly salary of $600.
Will prices in the grocery store also go down accordingly? No, they will go up, way up. Gas for your car? Way, way, way up.
Will this bring about riots? Yes. Chaos? Yes. Depression and suicides? Yes. The Elite hope that they will not have to do much killing; they hope that, in the end, we will kill ourselves.
And no, overnight, you will not be able to take a bar of gold into your local grocery store to pay for your bill. Gold and silver are primarily tools for wealth preservation, as a benchmark once any new financial system is in place.
Which is why the concept of bartering does seem more and more likely to survive. If you can trade such-and-such in your life for such-and-such that you need, all the better. Helping others, and others helping you, will be the only means of survival ... no man is an island.
Alas, most people will still look to government to save them, because that is all they know. People will be very tempted to give up their freedoms for security. But security means control, and far more control of our individual and daily lives than we can even fathom now.
Brandon is right: vigilance is needed now more than ever.
written by alexpapa , December 23, 2016
The idea that the fed can become insolvent because accumulating government bonds which gone sour is like to say that you can run out of air because someone farted in the room. The printing engine will not miss a beat as long as the populace sees USD as "safety", and this process nowadays is even gaining traction. Worldwide uncertainty and falling gold prices because of rising interest rates leave little choice for people who want to preserve wealth for the retirement, and that makes running printing presses even happier pastime.
That's why cyclical crises are necessary: to keep dollar up, and make everything else seem risky venture.
written by Gary Marshall , December 23, 2016
Hello Brandon,
So you are saying that the overnight rates are determined by the Fed solely. I do recall way back in September of 2008 that the overnight rates among banks and in the financial markets throughout the world were soaring whilst the Fed rate did not. If what you say is true, then the overnight rates charged in the markets would have been the same as that of the Fed.
So your statement is at odds with the facts.
The Fed, as well as many central banks, had to jump in and pretty much take over the entire overnight lending market by flooding it with money and loans. Remember Helicopter Ben?
As I say, the only way the Fed may influence overnight rates is by actually making loans. Even then, its stated rate is different from the actual rate.
You are working on a bad premiss and making erroneous statements based upon them.
written by Gary Marshall , December 23, 2016
Every bank has a printing press, the Fed being like every other bank with a few differences. The Fed creates currency in response to the demands of the financial markets as witnessed by the banks. But it doesn't issue currency to pay its bills or the government's bills. If it did pay bills with currency issue, then the US dollar would be on its last legs a la Zimbabwe.
The Fed sometimes takes losses on its loans just as any other lending institution. However, the Fed is in the initial process of taking massive losses on its purchases of US Treasuries at the maximum possible price.
On its balance sheet, how shall it cover those losses?
Assets decline to a point inferior to liabilities. Like any bank, it may sell assets or treasuries to curb losses, but this adds to the declining bond prices or rising yields. It may do nothing and take massive losses.
So how shall it clear out the losses from its balance sheet?
I expect a bailout from the public.
Regards,
Gary Marshall
Trojan Horse, Low-rated comment [Show]
written by Raj , December 23, 2016
Hi Brandon,
When we finally have someone who may not be a globalist we have a chance to put down our 'conspiracy theory' hats and give the guy a chance. Yes, we need to oppose every 'Big government' policy of his admin, be it $1T infrastructure spending or any other crazy Ivanka-driven healthcare over-reach. The risk of wearing the 'conspiracy' hat so early even before Trump has even taken office would unduly subdue the vigor with which we will need to continue opposing the leftists and the globalists. Let us dedicate at least 90% of our energies into opposing our real enemy. Suspecting Trump now would be akin to checking your wife's phone when there has been no hint yet of any wrong-doing.
Cheers
written by CallMeISHMAEL , December 23, 2016
Stop shilling for the elite. Brandon has already made CLEAR why Trump is a willing fall guy. Look at his cabinet. Look at his rhetoric (Nukes, Fed Reserve, etc.). He's setting up everything perfectly for a fall and a blame on the liberty movement. Even picking Steve Bannon is a masterstroke for blaming the liberty movement.
This is like checking your wife's phone when she keeps working late and getting dropped off by the same good looking male "co-worker".
written by Frank W. Hooper , December 23, 2016
You insist on flogging a dead horse.
The FED could care less about balance sheets, bad loans, etc. etc.. They are not nor ever will be audited which allows them to do anything they feel necessary and the media will play along. There are no markets or price discovery anymore. The Fed operates the largest trading floor in the world and can and does rig the game. Parroting the company line put out for public consumption does not you right nor appear intelligent.
written by Brandon Smith , December 23, 2016
@Gary Marshall
Now you are simply regurgitating the same statements over and over again. You have shown no proof whatsoever that the Fed is forced to move interest rates according to free market principles. When you can show me an example of this in action, then do so, otherwise you are wasting my time. Simply saying "you are wrong" is not an argument. PROVE I am wrong.
Show me examples of companies taking overnight loans from the Fed in which THEY dictated the rate rather than the Fed choosing the rate.
Also, the Fed DOES INDEED print fiat to cover its bills along with the U.S. government's bills and the bills of numerous other entities. You continually ignore my main point which is starting to make me think you are a disinformation agent - that point being that the Fed is the ONLY central bank in control of the World Reserve Currency. With world reserve status, as I stated a couple of times already, the Fed has the power to do whatever the hell it wants. Only when reserve status is lost will the Fed become insolvent. There is no debating this, it is historical precedence.
written by Brandon Smith , December 23, 2016
@Raj
Perhaps you have not been paying attention to Trump's cabinet picks. He has just front loaded government with Goldman Sachs bankers and Neo-Cons. Are you ignorant of this, or are you a shill?
written by CallMeISHMAEL , December 23, 2016
@Brandon, you have their attention. Hedge accordingly.
written by NH Watcher , December 24, 2016
Are we all too ignorant not to believe that all of Trump's current wealth could be taken away from him in a heartbeat? The present US military is in such disarray that I have grave doubts whether it could truly resist any invading force coming onto the US mainland en masse. Nonetheless, China, with its million man army, does not want a mess on its hands. Look at what the US got when it deposed Saddam ... eight plus years of madness trying to reassemble a country within a culture wholly against so-called Western ideals.
The Elite's biggest weapon now is how largely dependent upon government Western populations and societies have become. How often today do people look to the government for a response, rather than their fellow man? Whether it be an EMP strike, or some other 21st century weapon, how easy do we think it will be for most Americans to be herded up and sent away to camps, if the government presents them with no other alternatives? For the mass of humanity, they will do as they are told, in the face of starvation and likely death.
And that includes Trump, even though I voted for Trump (whether or not my vote was actually counted or really mattered).
As a Christian, I must look beyond the temporal to the eternal. It is the only possible guarantee I have to make sense of it all, and to have the necessary faith and motivation to move forward. My Savior told me, if they hate me, so will they hate you. And better to lose everything you have in this world, than to lose your very soul. I once was rich, and now I am poor, so have already tasted some of that loss. What really matters to you in the end? A bullet to your head knows no bank account or balance sheet; it kills indiscriminately.
The solution to our problem does lie within us, and within our willingness and ability to look beyond ourselves to those we may help, and who may help us in return. This time of year is always a good reminder of that.
written by Casual Observer , December 24, 2016
Another great article, except:
"Equities are a casino based on nothing but the luck of the draw when it comes to news headlines, central banker statements and algorithmic computers."
I'd "disagree," but it's not a matter of opinion, this just isn't true.
The life-span of an algorithm isn't anywhere near as long as many are led to believe, they have to be adjusted constantly and most are simply given up on, rendered obsolete is short order.
There are piles of evidence to the contrary for this, historically. Fibonacci, Ralph Nelson Elliott, Timothy Morge and dozens of others have proven that the markets are based on natural laws and psychology more than anything else - that's why fundamental analysis has proven in so may cases to be untrustworthy (especially when everything is marked-to-unicorn anyway).
The markets are reasonably predictable (didn't say entirely), short term and long term if you pay attention and are properly educated.
I've seen many systems work very well.
If this weren't the case, I wouldn't be able to execute extremely risky trades with better than 50/50 success (far better), consistently.
Wall Street knows this, part of their modeling is aimed at disrupting those very systems.
written by Brandon Smith , December 24, 2016
@Casual Observer
That is incorrect. Markets are dictated by the Fed, as Fischer openly admits in the article above. One can only gamble on what direction the Fed might take markets in. Their psychology is the only psychology that counts at this point in the game. The fundamentals only come into play when the fed steps back and allows equities to correct, or, when the dollar loses reserve status and the Fed no longer has the power to choose the timing of a correction.
Beyond that, there is no science to predicting stocks. No one is making much money on these markets (including the analysts you listed) except the bankers (because they dictate market direction). But if you believe you can predict movements based on some kind of fundamentals, then by all means, make a prediction and we'll see what happens.
I predict that when the Fed finishes pulling the rug out from overnight loans, stocks will crash. That is the only sane prediction one can make at this point.
written by awed bawl , December 24, 2016
does the economy exist to serve the fed?
inquiring minds would like to know.
written by jo-jo the indian circus boy! , December 25, 2016
Janet & Co. is so far behind the curve. She needs to step up the tempo beginning at the next meeting. Bubbles are forming everywhere, real estate, stocks, obviously bonds and in peoples heads. These bubbles have been forming for so long that people truly believe that this is all very normal. But we have seen all this before in various forms. The Grand experiment, QE, TWIST NIRP etc. etc. has not worked and actually has made the socio-economic outlook extremely uncertain. Funny how the ECB tried to mimic our FED and thinks it can provide the same far fetched growth that our all powerful FED can't achieve. Trump is naive to think it is business as usual and that he can deficit spend until the cows come home. Congress, this time is apprehensive and on guard. With a Federal debt at 20T and entitlement debt another 80T there is absolutely no room for deficit spending. Mitch Mconnell and Chuck Schumer stand ready to blunt any stupid schemes. And to believe that corporate or infrastructure spending, big or small, on new factories, new workers, etc. is a pipe dream that could easily turn into a blow up the Federal Budget deficit to the heavens. Or another way of saying let the heavens fall! Corporations will politely and graciously say to Mr. Trump, Thank you very much and uncork the champagne bottles, all the while , announcing more share buybacks!!! Meanwhile, 2T Federal deficits will rear their ugly head and simultaneously interest rates, 10Y, will most likely skyrocket to 4 or 5 percent and beyond. Meanwhile the dollar will behave like Jack and the beanstock and invariably sandbag our exports. Remember this, Trump humiliated the establishment, republicans, democrats, deep state, or whoever these people are that control the levers of power. And they do not appreciate losing control especially by a charlatan who built lot's of infrastructure and created jobs in atlantic city, that ultimately failed, everyone lost their jobs and he stiffed all the contractors into bankruptcy, etc. etc. leaving behind boarded up blight. But remember, he is "smart" and he walks between the raindrops and somehow never gets wet. Either way this cycle of artificially low interest rates is coming to an end and all the fallout associated with it is about to rear it's ugly head. Remember, this is no different than any other boom to bust scenarios that have been perpetuated over the American experience. Sir Issac Newton, what goes up always comes down. The story is always the same, it leads to a boom but always ends in a bust. Remember what Mark Twain coined, It's not the return on your money that is paramount but the return of your money====
written by CallMeISHMAEL , December 25, 2016
@jo-jo, nice wall of text of incoherent babbling and sneaking in disinfo about how "Trump humiliated the establishment". Bullshit. Trump is a tool of the establishment. Go shill somewhere else.
written by Tiger , December 25, 2016
Brandon, could you also analyze the narrative about the cause of the financial crisis as presented by some main Hollywood movies, featuring Ben Bernake, George Soros and a bunch of Hollywood superstars?
For example:
Inside job (http://www.imdb.com/title/tt1645089/)
The Big Short (http://www.imdb.com/title/tt1596363/)
Yeah right, Hollywood moralizing about greed etc... I don't buy it.
If you look attentively, the idea they want to present is that the whole financial crisis has happened only because the system was not regulated enough. Is this a very smart way to push public opinion in favor for even stronger control/centralization?
written by Brandon Smith , December 25, 2016
@Tiger
Hollywood always takes the communist position and promotes the lie that it was all about "greed" and lack of corporate oversight. They want people to believe that the source of our pain is the IDEOLOGY of free markets, instead of an organized group of banking elites working in CONCERT with government that are acting with intent and purpose. You are only supposed to look at the surface narrative and see human weakness and chaos instead of looking deeper and finding a deliberate program of social engineering through economic treachery.
written by turtlefeet , December 25, 2016
“The Fed exists to destroy the economy.” … says it all… and G. Ed Griffin would probably agree with you now after serving the banking elite so well over the last 100+ years in making them extremely rich while enslaving the rest of us.
Even if Trump is not held responsible for the initial collapse, he will surely be held responsible for the lack of recovery.
@Gary.
I would support Brandon’s explanation that the Fed ‘generally’ tries to maintain their announced cash rate by becoming the lender of last resort (LoLR) if necessary in the short term money market. They can choose not to which amounts to a liquidity squeeze forcing rates up slightly beyond their target - but too much risks crashing asset prices and can quickly morph into a lending crisis (of their own making) if commercial bank solvency comes into question as happened in 2008. And maybe this is your point, as this is exactly how they can engineer a collapse if desired, especially on a day where markets are already down across the board. In the absence of interbank lending, selling to free up cash to cover losses begets more selling and the process can spiral out of control.
And saying "Every bank has a printing press " is not really accurate by my understanding. Banks can create loans but then that money has to be borrowed from elsewhere in the banking system. They cannot create the currency to support these loans in the same way a central bank can create currency to lend to other banks or to purchase assets. Also commercial banks are limited in how much they can lend by the capital adequacy ratios set by the BIS(!) Basel Accords. The Fed has no such official limits to the best of my knowledge but instead is restricted ultimately by the impact of its actions on the value of the USD.
But maybe someone can clarify. Does the Fed need approval from congress to expand its balance sheet? I understand they needed approval for the emergency TALF loans (read “bailouts”) in 2008. This was the crucial vote which actually failed the first time but passed later and was more a question of what to do with the funds created rather than how much.
Moving on to the Fed’s balance sheet, maybe it is already insolvent - officially leveraged currently at more than 100:1 with Assets USD 4,454bn to "Capital" of USD 40bn (compared with average leverage of around 30:1 in the private banking system).
https://www.federalreserve.gov/monetarypolicy/files/quarterly_balance_sheet_developments_report_201611.pdf
But who audits the fed? And are all of these assets (especially those illiquid and toxic TARP ones from the 2008 bank bailouts) being valued accurately? Even if so, with that degree of leverage, it would not take much of an adverse market move to make the Fed insolvent. And who will bail them out? Maybe the public via commercial bank deposit haircuts or directly by taxes or via the government further increasing its USD 17tr debt for future tax payers and borrowing the money from elsewhere in the banking system (including ironically the Fed itself)…
…or maybe the IMF will lend them the money…
written by turtlefeet , December 25, 2016
So households and governments will be in debt to the banks. Banks will be in debt to the central banks and central banks will be in debt to the IMF. Mission accomplished.
There will be NO debt jubilee.
written by jo-jo the indian circus boy! , December 25, 2016
The Dodd Frank laws and the GSIFI FDIC rules and regulations do not allow for Bail outs by the Treasury(taxpayers) any longer-LAW. So once the derivatives take the banks down, they will have to write down the bonds they owe on to zero and confiscate unsecured creditors assets on the banks balance sheets. BTW, the largest class of unsecured creditors are depositors. If they only knew how the laws have been changed there would be a run on the 6 largest banks in the US. Currently the Derivative exposure of these grand institutions is approx. 280 Trillion. The one consolation once these zombie banks bail in is the depositor receives a worthless stock certificate in exchange for their lost deposit. Now the depositor is a owner in the Zombie Bank.Thanks FDIC!!!! And you think the FED has problems?!!!!!
written by Useless Eater , December 26, 2016
Yes, that's what it's like. The harder you pull the stronger it gets.
Audit the fed? Why? They are private. Would you want to be audited by the govt. "Oh," you say "but we are audited." That is because you consent to it by being subject to the jurisdiction of the US Corp.
The only remedy is withdrawal and correcting your legal status. Wish I could explain it to the brainwashed masses but try going to notmygovernmentdotcom for further clarification, then you can blame yourself for not understanding, which, in my bloated opinion, you all should be doing anyway. Blaming yourselves.
written by fan from MI , December 26, 2016
I check back here often just to read your comments at the end of your articles. I enjoy those as much as your articles! Thank you for your dedication and commitment to sharing a narrative that is coherent and supported by facts. You've planted the seed in me to take action and enlightened me in many ways. I'm the average citizen who isn't reading reports about the BIS. I do, however, seek understanding and I value the content you provide.
written by inquistor , December 26, 2016
that is the name of the game.
get the little people to think they are missing out on making some easy money, by pushing the indexes higher.
It you have a diversified portfolio, you will notice that your net worth does not really increase as the dow approached 20k.
it is all smoke and mirrors, it is the calm before the storm, and senior trump will go down in history as captain Ahab, chasing the "great white whale" trying to make America Great (again)
What a load of horse shit, this guy has capitalized on fear, and the impending doom that is felt by the uneducated masses, as life moves faster than their feeble minds can comprehend.
History will repeat, on the 8 year wave cycles that we are now completely programmed to accept.
Vote with your dollars, sell at the top, and leave the crying for the babies.
written by turtlefeet , December 27, 2016
8 year cycle? or 10 year.... 1987, 1997, 2007....
Or 100 year? Getting ready for another Bolshevik revolution as the zionazis formally takeover the U.S. after a short period of further economic devastation... removing Tsar Trump... slaughtering his deplorable supporters... and throwing the rest of the dissidents into the Gulag style FEMA camps.
written by Pologrounds , December 27, 2016
Brandon,
How does Trump picking Goldman alumni as Sec of Treasury and Sec of Commerce attempt to thwart the Federal Reserve? I don't know the aim of Goldman Sachs in this thing aside from controlling both the Federal Reserve and the Federal Government. It's a very thought provoking chess move though. Can't Trump fire Yellen upon getting into office and hire a choice of his picking as Fed chair as well?
Think this is a Goldman/JPMorgan Chase/Exxon/Rockefeller Group coup for total economic power of the country?
written by Pologrounds , December 27, 2016
Sorry, I guess only Mnuchin is officially the Secretary of Treasury slot chosen so far. Everything else is up in the air.
written by Brandon Smith , December 28, 2016
@Polo
I never said his picks are an attempt to "thwart the fed", the battle between Trump and the Fed will be staged and used as a rationale for the end of the dollar's world reserve status. There is no real quarrel between Trump and the Fed - it is theater for the masses.
Goldman Sachs is an international conglomerate - they are a globalist institution. Their ultimate aim is to shift from a dollar based world reserve system to a global basket system centralized by the IMF. They want people to accept the rise of a global currency and a global economic authority. The fed is sacrificial, just as the dollar is.
written by Karsten , December 28, 2016
Brandon,
your articles are really helpful for me and i try to understand things from a global/elites point of view.
I live in Germany, I realize that the US has renewed all their nukes in the airbase Ramstein and lately sent thousands of their tanks to us. Nothing is mentioned in the MSM. You say - and I agree - that the US-dollar and the US itself will loose its power in the next years. Have you considered that the US-elitists (not globalists) will try to keep their power? The last Century the US has always tried to separate EU and Russia from each other, because together they could be stronger than the US. If US-elitists realize they are about to loose their power, why not trying to weaken their competitors?
I see many reasons the US-elitists could start a war EU against Russia. That war wouldn't interfere with the globalists plan. EU is still too strong in global point of view, why not weaken it a bit more. War could also be a good distraction for everything else that happens and would make people busy with their daily problems.
Are you only doing research in economy and politics or is potential war something you consider too?
written by John Bull , December 31, 2016
This election may or may not be part of Agenda21/2030
On this only time will tell, probably not much time at that. The signs will appear within a month from now. If Trump is a quisling he will fail, the outcome will be very very unpleasant.
I have faith in the people who voted Trump or come to think of it Brexit, if the prophecies of collusion, stupidity and or doom are true the upwelling of outrage will eclipse the worst nightmares of the elite marxists, the west will burn but eventually these globalist scum will be destroyed. I believe that one way or another the swamp will be drained completely dry.
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