The economy is in fine shape according to Fed Chairman Powell. I really think my life would be happier if I just listened to the mainstream media, the President and his merry band of money-printers.
Unfortunately, I live here in the real world. When I am told there is no inflation but prices for everything seem to be rising, I get the idea I may be being lied to.
When I am told the economy is great but all of the economic numbers that come out are contracting and accelerating to the downside (manufacturing, shipping, sales, etc.) along with the fact that we are seeing record store closings and job losses I get the idea I am being lied to.
When I am told the banks are in great shape but need between $30 billion and $100 billion in cash DAILY for the past 2 weeks- and it appears that this may not stop until the people catch on- it appears I am being lied to.
In addition to the liquidity needs the layoffs at the banks are coming fast and furious. According to Gerald Celente of the Trends Journal 60,000 bank employees have lost their jobs already in 2019 and Deutsche Bank just announced 18,000 more layoffs in Germany and HSBC announced a cut of 10,000 jobs. Sounds like “All is Great!”.
When I am told we have the lowest unemployment rate of all time endlessly on TV but see with my own eyes that millions can’t find jobs- along with USDebtclock.org showing over 95 million working-age people who COULD work but are simply not counted it appears I am being lied to.
When wages are supposedly rising but reported tax receipts are not it appears that something is not being reported correctly. Since mis-reporting income is considered a crime I tend to believe that number before any other reports. In watching the financial game shows the “experts” are confused as to why wages aren’t rising as they have in the past when we have “full employment”. Of course, if they are looking at fake numbers, they are going to get fake results. Enough said.
When I am told that the Fed adding 186 billion to their balance sheet in the last few weeks (It took them 6 months to reduce it that much and they almost took the markets down just trying to do that (think December 2018) and that they are adding $30-100 billion per day to bank liquidity at least until November 4th. and that they will begin adding to their balance sheet “soon” according to Chairman Powell, and then I am told this is not QE- it appears I am being lied to.
Even the mainstream media who almost always toes the line for the Fed is calling them on this whopper.
Why is it SO important for Powell to not call this QE? My guess is that it would expose QE (Money “Printed” out of nowhere) as the failure it has been. As I wrote in January of this year- the action in December of 2018 was confirmation to me that any attempt to exit QE in any meaningful way would collapse the system. Since then, the confirmation has just grown stronger as virtually ALL developed market central banks are engaged in “printing and buying” schemes for assets of all kinds- probably buying each other’s debt also, over 30 countries have lowered interest rates in 2019 to keep the system appearing solvent as debt levels are at obscene levels we have never dreamed of before, and yet the world economy is in a coordinated slowdown. Many headlines start off with “the worst reading in 10 years” or “the worst numbers since 2008”. Is there any idea why all of these numbers are being compared to the last time we had a financial crisis? Is there ANYONE who is concerned about the banks needing to be bailed out daily now even though the GAO reported they got over $16 trillion in 2009 and as of last year that number ballooned to over $24 trillion. That is the last I saw but it is likely FAR higher now as even more stress is showing even with these massive infusions of cash.
As I wrote about weeks ago in comparing our financial situation with that of our situation in 2007 EVERY economic indicator with regard to global manufacturing PMIs, economic surprise index and financial conditions are WORSE today than they were at that time according to research published by Morgan Stanley. This after DOUBLING our debt to pretend we have actually been solvent for the past decade.
So why is this all important?
To me, it shows the precarious situation that the world is in and that the USA is not immune to what is happening around the globe. The Fed has now admitted that QE 4, 5 or 6 is starting again soon and if we look at Japan and Europe it will likely not only not end but have to get bigger and bigger to get the same results.
Actually, in April I looked at the Japanese Central Bank’s balance sheet of 574 TRILLION yen and they actually announced that they had to do “more” around that time. What they had done so far was not enough! Let those numbers sink in!
This, in my opinion, is leading to UNLIMITED money “printing” that will lead to a massive devaluation of all currencies- including our US dollar and lead to FAR higher prices for tangible goods (stuff we need to live) and real assets such as energy, electricity, food, water and real money that can’t get conjured up out of nowhere like gold and silver.
Those who can read the tea leaves (or those who are causing this like the central banks) are buying up these real assets as we speak. Central bank purchases of gold are over 450 tons so far this year and appear that they will break last years record buying by year end.
In addition to the unlimited conjuring of money that we appear to be heading for to stave off another financial collapse- at least until the 2020 election if the President gets his way- it appears that others will be helping to reduce our US dollar’s value.
I have written in the past about China and Russia setting up their own International payment systems to bypass the SWIFT system of payments which the US has been using as a weapon to punish countries that would dare defy sanctions on those countries deemed enemies. Just October 4th. Turkey (a NATO member but I am not sure for how long) signed up to participate with Russia and China to bypass the US dollar and the SWIFT system for bilateral trade with Russia. So far, China and Turkey are on board with Iran and India being rumored to be next.
It is no surprise that as the USA is running trillion dollar deficits, issuing record amounts of new debt and that as global trade is slowing down, and reliance on the US dollar being undermined, that the Fed has announced a new “printing” program to resume “soon”.
I look for it to grow in size and scale almost immediately.
Basically, to me, it appears the Fed will become the Japanese Central Bank as they are the lenders and buyers of last resort. Without the JCB there would likely be no sovereign debt market in Japan as they have been that market for the past 3 years. Their economy still stinks and their stock market still sits 40% below its closing high in 1989. So much for “printing” leading to higher prices EXCEPT for the initial run-up as the Faux FUNDS are created and “assets” are purchased. Of course, unless a bigger fool comes along or more “printing” takes place there is no reason why the price would rise from there since no economic activity was actually created – only fake purchasing power as if someone had actually created something. At the end of the day the central banks own all of the assets. After that, will they “print up” more faux cash and buy the assets that they already own again?
Probably not. They will have what they want- real stuff for nothing more than a mouse click. All at our expense. Ask yourself if the rosy pictures painted by the financial game shows is at all is playing out in the real world. Are prices lower? Are you better off now than 10 or 20 years ago? Is the average American better off now than they were 10 years ago? If things are so great why are Americans, their towns, cities, states and national governments drowning in debt and adding to it in record amounts with NO PLANS of how to reduce that debt let alone pay it off?
It appears to me the die is cast. It appears to me there will be a US dollar that has less value and our costs are going to go up. The only way I can think of to manage this is to buy real stuff while it is still relatively cheap and buy assets that will increase faster than our dollars decrease- like gold and silver which have been artificially held down as other assets have been propped up.
At some point this will come to a head. It appears to me that time is rapidly approaching and that our President will have a hard time getting to the 2020 election without a lot of this playing out. Maybe all of it. Maybe real soon!
Financial Advisor, Raymond James Financial Services, Inc.
2642 Route 940
Pocono Summit, Pa 18346
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