Federal Reserve

No Turning Back After Central Bankers’ ‘Seismic Stimulus Shift’

April 7, 2020 Francesco Canepa and Balazs Koranyi, Reuters. Create! Central Bank, Debt, Federal Reserve, Global Recession

The tools used by the Federal Reserve and the central banks in the euro zone and Japan differ slightly but they mostly involve new, massive purchases of financial assets and cheap credit for banks and companies. At their core, they all revolve around one concept: gobbling up private and public debt, which has been growing for a long time and is bound to explode as the pandemic hampers borrowers’ ability to pay and bumps up government spending. Each central bank, albeit to varying degrees, is still paying lip service to the notions of independence from politics, a foundation of central banking since the 1980s. But as they hoover up a growing share of their country’s public and private debt, “coordination” between fiscal and monetary authorities has become the new mantra among policymakers.

Was The Fed Just Nationalized?

April 5, 2020 Ellen Brown, Popular Resistance. Educate! Congress, Federal budget, Federal Reserve, Recession

Mainstream politicians have long insisted that Medicare for all, a universal basic income, student debt relief and a slew of other much-needed public programs are off the table because the federal government cannot afford them. But that was before Wall Street and the stock market were driven onto life-support by a virus. Congress has now suddenly discovered the magic money tree. It took only a few days for Congress to unanimously pass the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which will be doling out $2.2 trillion in crisis relief, most of it going to Corporate America with few strings attached. Beyond that, the Federal Reserve is making over $4 trillion available to banks, hedge funds and other financial entities of all stripes; it has dropped the fed funds rate (the rate at which banks borrow from each other) effectively to zero; and it has made $1.5 trillion available to the repo market.

On Market Solutions To The Covid-19 Crisis

April 4, 2020 Jack Rasmus, Znet. Educate! Big Banks, Capitalism, Corporate Bailout, Federal Reserve, Recession

In 2008 the Federal Reserve provided more than $4 trillion to bail out the banks. Now it is providing more than $6 trillion (thus far)—and this time the banks haven’t even failed yet! The Fed has opened a free money spigot to investors, bankers, and to big business of all types, and has simply declared ‘come on in and take it’. And if the $6 trillion to date isn’t enough, we’ll provide more. For the first time ever the Fed is now providing free money not only to bankers, but to credit card companies, mortgage companies, corporate bondholders, and even to investors in derivatives like Exchange Traded Funds, or ETFs. Next, it will start buying stocks to prop up those markets. Its cousin central bank, the Bank of Japan, has been doing that for years now.

The Federal Reserve Dictatorship Runs Amok Against Savers

March 21, 2020 Ralph Nader, Nader.org Educate! Banks, Federal Reserve

If you are a saver in a money market account or in a bank, you’ve already noticed your dwindling interest income as interest rates have been at their lowest in modern American history. Well, brace yourself. Your saving account has just become little more than a lock box, thanks to the supreme dictatorship of the Federal Reserve. On Sunday, March 15, The Federal Reserve announced that it would cut interest rates to “near zero.”

Is The Run On The Dollar Due To Panic Or Greed?

November 6, 2019 Ellen Brown, Truthdig.com Educate! Currency, Federal Reserve, Finance and the Economy

What’s going on in the repo market? Rates on repurchase (“repo”) agreements should be about 2%, in line with the Federal Reserve funds rate. But they shot up to over 5% on Sept. 16 and got as high as 10% on Sept. 17. Yet banks were refusing to lend to each other, evidently passing up big profits to hold onto their cash—just as they did in the housing market crash and Great Recession of 2008-09. Because banks weren’t lending, the Federal Reserve Bank of New York jumped in, increasing its overnight repo operations to $75 billion, and on Oct. 23...

Another Look At The Federal Reserve’s Panic In September 2019 And Solutions To The Crisis

November 6, 2019 By Eric Toussaint, Cadtm.org Create! Banks, Currency, Federal Reserve

You may recall that from 17 September 2019, the United States Federal Reserve injected massive amounts of liquidity into banks due to a quite abnormal situation on the repo market [1]. The repo market designates a mechanism used by banks to obtain short-term financing. They sell securities they hold in repurchase agreements (repo). For example they place US Treasury bonds or Triple-A company securities in repo overnight, to serve as warranty or collateral for the loan they are making, and they buy them back on the following day.

QE Forever: The Fed’s Dramatic About-face

February 22, 2019 Staff, Ellenbrown.com Educate! 2008 crash, Federal Reserve

“Quantitative easing” was supposed to be an emergency measure. The Federal Reserve “eased” shrinkage in the money supply due to the 2008-09 credit crisis by pumping out trillions of dollars in new bank reserves. After the crisis, the presumption was that the Fed would “normalize” conditions by sopping up the excess reserves through “quantitative tightening” (QT) – raising interest rates and selling the securities it had bought with new reserves back into the market. The Fed relentlessly pushed on with quantitative tightening through 2018, despite a severe market correction in the fall.

How And Why Trump Should Take Control Of The Fed

July 31, 2018 Ellen Brown, Ellenbrown.com Create! Federal Reserve, Trump Administration

For nearly half a century, presidents have refrained from criticizing the “independent” Federal Reserve; but that was before Donald Trump. In response to a question about Fed interest rate policy in a CNBC interview on July 19, 2018, he shocked commentators by stating, “I’m not thrilled. Because we go up and every time you go up they want to raise rates again. . . . I am not happy about it. . . . I don’t like all of this work that we’re putting into the economy and then I see rates going up.” He acknowledged the central bank’s independence, but the point was made: the Fed was hurting the economy with its “Quantitative Tightening” policies and needed to watch its step. In commentary on CNBC.com, Richard Bove contended that the president was positioning himself to take control of the Federal Reserve.

The Fed Boosts Wall Street, Not Main Street

May 8, 2018 Nomi Prins, Truthdig.com Educate! Federal Reserve, New Economy, Wall Street

Since QE went global, the Bank of England, for one, has often had to defend itself from accusations that its policies have increased inequality. A recent study concluded that “nine years of asset purchases that pumped 375 billion pounds ($527 billion) into a faltering world economy didn’t widen inequality after all.” Although the British central bank does acknowledge that some measures of inequality arose, it stressed that accommodative monetary policy had only a “marginal impact” on that rise. The analysis simply misses the point. Net wealth at the top increased as asset bubbles fueled by QE inflated further. By sheer math, we can see that those who had access to QE rode the policy to greater gains while everyday citizens struggling to get by did not. They were not a part of the magical relationship between central banks, private banks and markets. That’s the definition of inequality. The rich get richer and everyone else—doesn’t.

The Return Of The Great Meltdown

April 28, 2018 Nomi Prins, Tom Dispatch. Educate! Banking, Economic collapse, Federal Reserve, Wall Street

We have entered a landmark moment: no president since Woodrow Wilson (during whose administration the Federal Reserve was established) will have appointed as many board members to the Fed as Donald Trump. His fingerprints will, in other words, not just be on Supreme Court decisions, but no less significantly Fed policy-making for years to come -- even though, like that court, it occupies a mandated position of political independence.

Janet Yellen Was Great Fed Chair. So Why Is Economy Still Broken?

January 29, 2018 Zach Carter, Huffingtonpost.com Educate! Capitalism, Federal Reserve, Inequality, New Economy

When President Barack Obama reluctantly nominated Janet Yellen to the most powerful economic post on the planet in October 2013, Republican Party leaders, backed by much of the economics establishment, warned of looming economic ruin. As Federal Reserve chair, Yellen would lead the country into a hyperinflation calamity on par with Weimar Germany or, at least, a return to the misery and malaise of the Jimmy Carter years. Senate Majority Leader Mitch McConnell (R-Ky.) said he had “serious concerns” about Yellen’s interest in “maintaining the purchasing power of the dollar.” Sen. John Cornyn (R-Texas) declared Yellen “thought that the best way to handle to our nation’s fiscal challenges is to throw more money at them.” Sen. Richard Shelby (R-Ala.) envisioned“massive price increases on every single product that Americans buy.”

How To Erase Puerto Rico’s Debt Without Hurting Mom And Pop

October 15, 2017 Ellen Brown, www.ellenbrown.com Create! Banking and Finance, Debt, Federal Reserve, New Economy, Puerto Rico

By Ellen Brown for Web of Debt. During his visit to hurricane-stricken Puerto Rico, President Donald Trump shocked the bond market when he told Geraldo Rivera of Fox News that he was going to wipe out the island’s bond debt. How did the president plan to pull this off? Pam Martens and Russ Martens, writing in Wall Street on Parade, note that the U.S. municipal bond market holds $3.8 trillion in debt, and it is not just owned by Wall Street banks. Mom and pop retail investors are exposed to billions of dollars of potential losses through their holdings of Puerto Rican municipal bonds, either directly or in mutual funds.

Amid Warnings Of Financial Crash, Fed Chair Promotes Illusions

August 27, 2017 Nick Beams, www.wsws.org Educate! Federal Reserve, Finance and the Economy, Recession

By Nick Beams for World Socialist Web Site. Wyoming (August 26, 2017) - Yesterday’s speech by Federal Reserve chairwoman Janet Yellen to the conclave of central bankers at Jackson Hole, Wyoming recalled events at the gathering 12 years ago. At that meeting, the growing signs of the devastating financial crisis that was to strike in 2008 were completely ignored. That was likewise the situation at this year’s meeting, held under conditions where the surge in stock markets is bringing warnings of a major collapse. The 2005 meeting was organised as a celebration of the achievements of the "Maestro,” Fed chief Alan Greenspan, whose policies, it was claimed, had brought a new era of prosperity to the global economy.

US Federal Reserve ‘Might Legitimately Consider’ Public Money Creation

June 29, 2016 Frank Van Lerven, www.positivemoney.org Create! Federal Reserve

By Frank Van Lerven for Positive Money . The Federal Reserve ‘might legitimately consider’ using Public Money Creation in ‘extreme circumstances’, when there is ‘very weak growth’ or ‘deflation’, Fed Chairwoman Janet Yellen said earlier this week at a press conference. Yellen did not elaborate on what type of Public Money Creation the Fed would consider using. However, it is relatively safe to assume that it would most likely resemble some form of money-financed Helicopter Drops as advocated by Yellen’s predecessor – Ben Bernanke. In Bernanke’s proposal, the Fed would use newly created money to finance a tax-cut or direct cash transfer to households, such as a one-off citizen’s dividend.

What Federal Reserve Would Look Like If Progressives Had Their Way

April 13, 2016 Daniel Marans, www.huffingtonpost.com Create! 2016 Elections, Federal Reserve, Reform

By Daniel Marans for The Huffington Post - The progressive Fed Up coalition released an ambitious Federal Reserve reform plan on Monday designed to increase discussion of Fed policy in the presidential campaign. The reforms, which would require the passage of new legislation, would turn the Federal Reserve into a public entity akin to other federal agencies, with the goal of dramatically increasing the accountability of the world’s most powerful financial body.

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