I actually comprehend little when it comes to economics and numbers.
But history is easier to grasp. History informs us a Capitalist based Market System
has enabled a Liberty-minded America to prosper more than the fail. While
oppositely a Socialist based Government Managed System robs Liberty from
citizens stifling individual prosperity and increasing government despotism and
oppression.
Though I have difficulty grasping the actual effects of a repo
(buyback) stocks market on the economy I grasp well that an unrestrained Federal
Reserve with near zero checks and balances adds to government despotism and
decreases Liberty and Freedom of America’s individual citizens. And so … here
are Justin Smith’s thoughts on American Markets and the actions of the Federal
Reserve.
JRH 10/10/19
Your generosity is always appreciated:
Blog Editor: Rather than capitulate to Facebook censorship by abandoning the platform, I choose to post and share until the Leftist censors ban me. Recently, the Facebook censorship tactic I’ve experienced is a couple of Group shares then jailed under the false accusation of posting too fast. So I ask those that read this, to combat censorship by sharing blog and Facebook posts with your friends or Groups you belong to.
********************
Dreams of Prosperity and an Inflated Currency
Congressional Warning Bells Are Silent
By Justin O. Smith
Sent 10/8/2019
10:42 PM
"Long before we wake up
from our dream of prosperity through an inflated currency, our gold, which
alone could have kept us from catastrophe, will have vanished and no rate of
interest will tempt it to return." U.S. Senator Elihu Root (R-NY) 1913
The Federal Reserve Bank has been a bone of contention, since
our nation's founding. This rogue agency has proven itself to be the evil
entity that many early American leaders believed it to be, but not one word on
the Fed was forthcoming, when Congresswoman Maxine Waters announced the
schedule of the House Financial Services Committee on October 3rd, after the
Federal Reserve Bank started transferring billions of dollars into the
Repurchasing Market on September 17th. This activated its proposal to hand
seventy-five billion dollars a day to unnamed banks on Wall Street, until
November 4th, the first such intervention since the 2008 economic collapse and
the bailout of financial organizations deemed "too big to fail"; and,
it is just one more criminal act in a long line of abuses committed against all
America.
In 2011, James
Felkerson wrote in an academic piece, that from 2007 to
2010, the Fed had funneled an unbelievable $29 trillion in revolving
loans to Wall Street and global banks. It did this without
any apparent realization and authority from Congress, even though by law both
the House Financial Services and the Senate Banking Committees are to be
briefed on any such emergency loans, including the names of those banks taking
the loans.
[Blog Editor: I am not an economist. In trying to make
sense of the repo market and reverse-repo market the information muddied rather
than bring clarity to my understanding. Since it is my mantra that Dems lie and
deceive I become skeptical when the likes of Dem candidates for President (e.g.
Elizabeth Warren & Bernie Sanders among others) begin to rail against
the buyback repo markets. I’ll start with an explanation of repo markets
then add some criticism titles for you to look noting who the critics are:
· After $1 Trillion In Stock Buyback Spending, Companies Keep
Their Wallets Open; By SCOTT LEHTONEN;
Investor’s Business Daily; 1/12/19
· Stock buybacks are set to hit a record $1 trillion this year,
even as presidential candidates try to restrict them; Rebecca Ungarino; Markets.BusinessInsider.com; 7/2/19
01:09 PM
· U.S. repo rates surge on tax payments, bond settlements;
By Richard Leong; Investing.com;
9/16/19 02:46 PM ET
Like I said, I am no economist. BUT the tax issue seems
less about taxpayers funds and more about banks and corporations taking
advantage of tax breaks to expand money returns which may or may not blow up
DEPENDING on the security controls of the money-printing Federal Reserve. Not
being an economist means my take could be entirely off basis.]
These Big Banks and corporations are taking this
"free" taxpayer dollars and buying back stocks in their own
companies, rather than risk investment in productive investments, which creates
an illusion of economic growth. The purchases give companies the appearance of
being more profitable than they actually are, even though their earnings have
remained stagnant. And it is the Fed's perverse incentives that have given rise
to this debt-dependent speculative system that allows companies to pocket their
profits, while at the same time, they socialize their losses and pass them
along to the taxpayer, 'We the People'.
In 1832, President Andrew Jackson, extremely antagonistic
towards the Bank of the United States, stated: "Gentlemen! I
too have been a close observer of the doings of the Bank of the United States.
I have had men watching You for a long time, and am convinced that you have
used the funds of the bank to speculate in the breadstuffs of the country. When
you won, you divided the profits amongst you, and when you lost, you charged it
to the bank. You tell me that if I take the deposits from the bank and annul
its charter I shall ruin [a] thousand families. That may be true, gentlemen,
but that is your sin! Should I let you go on, you will ruin fifty thousand
families, and that would be my sin! You are a den of vipers and thieves. I have
determined to rout you out, and by the Eternal, I will rout you out."
[Bold-Italics Blog Editor’s]
We are currently witnessing a continuation of the
malinvestments that led to the 2008 economic collapse and massive loans
combined with another huge expansion of credit. When banking institutes issue huge
credit lines, any future economic collapse is proportional to that amount of
outstanding credit.
This isn't a true "boom economy" and the current
boom is the culmination of monetary inflation and an expanded credit cycle, in
the wake of the residential property and stock market booms, between 2005 and
2007, and malinvestments that have not yet been fully corrected. To date, this
is by far a larger credit elevation than that of 1922-1929, and the Great
Depression on the 20th century.
It seems as though everyone in America has bought into the
promise of applied macroeconomics, refusing to
acknowledge the contrary signals through the prism of classic economics, while they
accept macroeconomist premises that economic truths on a micro-level are not
applicable to the whole at the macro-level. This level of ignorance will soon
prove to be a huge mistake, since nobody can live forever beyond their means
and ability to repay amounts owed.
One should note that the JP
Morgan Bank, one of the largest in the United States,
was hit with three felony counts under the RICO Act
last month, concerning the precious metals market. This is particularly
alarming in light of JP Morgan's $158 billion cash reduction in the Federal
Reserve, between January and June of 2019, a
fifty-seven percent decline this year.
Why hasn't the need of the United States' largest bank to
acquire such a large loan over a six month period raised any warning bells in
Congress? Why does JP Morgan need such a large loan if it has $1.6 trillion in
deposits and a "fortress balance sheet", as asserted by JP's CEO,
Jamie Dimon?
By the end of June 2019, America's four largest banks had a
combined $5.45 trillion in deposits: JP Morgan claimed $1.6 trillion; Bank of
America claims $1.44 trillion; Wells Fargo posts $1.35 trillion, and Citibank
holds a bit over $1 trillion.
So why the current panic at the Fed? If the liquidity
doesn't exist to allow these banks to issue billions in loans, when they
supposedly hold $5.45 trillion, something very serious has occurred in the
financial industry and another economic crisis looms on the
horizon.
Recently, CNBC reported that U.S. manufacturing purchasing
managers' index was the lowest it's been since June 2009, at 47.8 percent, and
in recent days, many hundreds of Americans have been laid off from companies,
such as Kroger and many others. Bayou Steel just laid off 376 workers,
according to Market Realist; Daimler Trucks North America is laying off 450
people; WeWork is set to end five thousand jobs, one-third of its workforce;
Hewlett Packard Inc is cutting approximately 8,000 positions, and lets not
forget that Walmart was forced to close 63 locations last year.
This isn't a "boom economy" anyway one looks at
it, especially when we see Democrats and Republicans alike engaging in
out-of-control deficit spending, as if the U.S. Treasury is their own personal
piggy bank and there is no tomorrow. If this were truly such a golden period of
economic recovery, our financiers wouldn't be clamoring for interest rate cuts,
when they are already at historically low levels.
America has seen this greed motivated reach for more and
more before, as the borrowers seem not to have one care on how their loans will
be repaid, and most of America cares not so long as they get their cut. It is
this extreme callous character flaw and apathy and a complacency and the
turning of a blind eye by corrupt Congressmen, a national immorality, that is
allowing the Fed to once more bail out the worse white collar
criminals on Wall Street, as they continue to take huge portions of bail out
funds to reward themselves with tens of millions of
dollars in bonuses and billions of dollars to lawyers to prevent them from
being prosecuted for fraud.
It is an indication of America's collective genius or its
collective madness that permits Her people to hold so many contradictory
assumptions, combined under the same economic system, and blindly and blithely
proceed as if they were all joined by perfect cogent thought, logic and reason.
And yet, many Americans cannot escape the nagging feeling that something is
going extraordinarily wrong, as our best and brightest economic experts call
madness "common sense", denying that their deal with the devil
doesn't come at some terrible price eventually.
The impeccable and brilliant Senator Elihu Root strongly opposed the Federal Reserve Act
in 1913, noting in a blistering and prescient manner
that "the Federal Reserve ... provides an expansive currency, not an
elastic one". He noted that the temptation to expand the currency would
cause the Fed to create the very cycles it was supposed to prevent.
It is far past time to eradicate the Federal Reserve Bank
and the economic sickness that accompanies centralized banking, wherever one
finds it.
Whatever a man sows, so shall he reap. Need little, want
less and love more.
By Justin O. Smith
+++++++++++++++++
Blog Editor: Rather than
capitulate to Facebook censorship by abandoning the platform, I choose to post
and share until the Leftist censors ban me. Recently, the Facebook censorship
tactic I’ve experienced is a couple of Group shares then jailed under the false
accusation of posting too fast. So I ask those that read this, to combat
censorship by sharing blog and Facebook posts with your friends or Groups you
belong to.
___________________________
Edited by John R. Houk
Source links and text embraced
by brackets are by the Editor.
© Justin O. Smith
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