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Tag Archives: US Treasury

  • Blog

    The Federal Reserve Is Directly Monetizing US Debt

    In a very real way, MMT is already here
    by Chris Martenson

    Friday, November 15, 2019, 3:30 PM

    27

    The Federal Reserve is now directly monetizing US federal debt.

    Sure, it’s not admitting to this. And it’s using several technical jinks and jives to offer a pretense that things are otherwise.

    But it’s not terribly difficult to predict what’s going to happen next: the Federal Reserve will drop the secrecy and start buying US debt openly.

    At a time, mind you, when US fiscal deficits are exploding and foreign buyers are heading for the exits.

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  • Blog

    Could Modern Monetary Theory (MMT) Actually Save Us?

    Spoiler alert: no. But that doesn't mean we won't try it.
    by charleshughsmith

    Friday, October 25, 2019, 5:19 PM

    33

    The problem is we’re misallocating capital, resources and labor on a vast scale. That’s the problem.

    Adding more currency and capacity/”growth” via programs like MMT doesn’t fix this problem; it actually makes it worse.

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  • Blog

    The Federal Reserve Is Destroying America

    And wait until you hear what they're getting away with now
    by Chris Martenson

    Saturday, May 27, 2017, 3:50 AM

    8

    The Federal Reserve is destroying America. 

    It might have good intentions, but it's working with bad models. Ones that lead to truly horrible outcomes.

    One of the chief failings of central banks is that they are slaves to an impossible idea; the notion that humans are free to pursue perpetual exponential economic growth on a finite planet. 

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  • Podcast

    Jim Rickards: The New Case For Gold

    A powerful set of arguments for owning the yellow metal
    by Adam Taggart

    Monday, April 4, 2016, 4:32 AM

    51

    Monetary expert Jim Rickards returns this week to share the insights from his latest work The New Case For Gold, a detailed and highly-researched study of the fundamentals likely to drive the price of gold bullion in the years to come.

    Rickards is quite confident that the price is going higher — much higher in fact — as the current world fit currency regimes falter, to be replaced by ones backed (at least in part) by bullion.

    On the way to that outcome, expect the price to be subject to the geopolitical interests and aims of the largest players on the chessboard.

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  • Insider
    © Kerem Gogus | Dreamstime.com

    Blast Shields Up! Prepare for Incoming!

    Get busy with defensive maneuvers – now
    by Chris Martenson

    Tuesday, August 27, 2013, 8:05 PM

    74

    Executive Summary

    • Central bank policies to prop up the global economic system are failing
    • Developing countries and the PIIGS are the periphery where we can see the crumbling now accelerate
    • The emerging Syria crisis could hardly come at a worse time & could have an explosive effect
    • The steps every concerned individual should be taking now

    If you have not yet read Part I: The Periphery is Failing, available free to all readers, please click here to read it first.

    When Help Turns to Harm

    The story, so far, goes like this:  A global credit crisis so worried the powers that be that they promised to do ‘whatever it takes,’ (Draghi) even if that means lying from time to time (Junker).  This has only resulted in larger and larger interventions in the form of more aggressive QE programs (U.S. Fed), doubling of the monetary base (Japan), and repeated ‘Final Bailout Ever’ goal lines that keep getting moved back (ECB re: Greece).

    Each of these interventions, in combination with ultra-low and highly distortive interest rates, has only served to make markets more speculative, more risk-tolerant, and therefore more prone to some future accident.

    Puzzlingly, and certainly off-script, has been the steady rise in long-term U.S. interest rates, which we’ve been tracking as the most interesting development in an otherwise boringly placid set of global equity markets.

    That began in early June.  Now at August's end, we have a better picture to illuminate why that happened and where it’s probably headed next.

    The initial data came to us via the Treasury International Capital (TIC) report that tracks the net buying and selling of financial securities in both directions across the U.S. border.  The June numbers were a real eye-opener, as they marked the first time in history that virtually every category of U.S. financial assets was net sold by foreigners.  It also showed the total amount of selling was even greater than the prior record set in October of 2008:

    (Source)

    Of course, this data is from June, and the TIC report, as good as it is, always comes out a month and a half after the fact.  So we can only guess at what has happened since.  (The July data will be released Sept 15).

    The summary of the TIC data is this:  Countries across the globe are now selling more U.S. paper than they are buying, and that is very much a game-changer.  To understand why the game has changed, all we have to do is understand that the interventionist policies of the Fed, ECB, and Bank of Japan could never last forever and that eventually things would go into reverse.

    This will prove to be quite surprising to many, but especially those who hold the belief that central banks actually have everything under control.  Certainly we cannot disagree with the idea that central banks have a tremendous amount of power and that they can distort things for far longer than we might think possible, but eventually they cannot prevent reality from being what it is.

    It is our view that the tide has now turned.

    From the Outside In

    So if the story was one of Western central banks flooding the world with liquidity (including Japan as an honorary ‘Westerner’ in this story), and of that “money” rushing into various foreign markets, driving bond and equity prices up in those same markets, while the respective central banks fought the coincident strengthening of their local currencies by recycling that money back into U.S. paper assets (principally Treasury paper) well, that story eventually had to flip.

    We’ve already seen…

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