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Old 02-27-2019, 04:04 PM
Danny B Danny B is offline
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Join Date: Oct 2012
Location: L.A. Ca.
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The State hopes to buy a little more time with MMT

Well, it appears that GOV is working hard to legitimise MMT.
Armstrong, "We are preparing not merely for the adoption of MMT or Modern Money Theory. The politicians will embrace this idea as they realize they are going broke and central banks cannot save the day."
Why is the government going broke?
"ANSWER: It will not end well. Government employees have the defined-benefit (DB) while we get the defined-contribution (DC) plans. Most state and local government employees, actually 87% of those working full time, participate in a defined benefit (DB) pension plan. They contribute NOTHING but are guaranteed a pension on top of what they earned, plus free healthcare for life. The vast majority of those in government have NEVER had to save anything. They are there now demanding that our futures be stripped."

Powell tried to do a controlled demolition. Nope, the fragility was too great.
"It was only 60 days and 3,000 Dow Jones points ago that the POTUS threatened to fire the chairman of the U.S. Federal Reserve (Jerome Powell) and the Treasury Secretary (Steven Mnuchin), resulting in a resounding call to arms that has since added over 10% to the S&P 500 and dropped the ten-year yield from 3.25% to 2.65%. Happy, smiling faces of Wall Street gamblers and online speculators are popping up everywhere "
"It is in the derivatives that the banks are able to play their games, completely unsanctioned and totally condoned by both regulators and compliance officers."

So, private bankers own the FED and,,, the FED rescues private bankers when their gambles go bad. WE pay the price in inflation.
“We’re paddling against the current in trying to sustain public faith in the Fed.”
–Federal Reserve Chairman JEROME (JAY) POWELL

“The FOMC (Federal Open Market Committee, the Fed’s key rate-setting entity) is in panic mode now, facing the Frankenstein monster balance sheet it has created. The FOMC has come to the realization that it cannot unwind it.”
–Jones Trading’s chief strategist MIKE O’ROURKE
The FED ran it's balance sheet up to about $4.1 trillion. They have off-loaded some of that but, must now stop.
"Thanks to weakening inflation and continuing anemic growth on the Continent, rate hikes are off the table. Soon-to-be-outgoing ECB emperor chief Mario Draghi is already making noises about restarting its quantitative easing (QE) program rather than reversing it as its American counterpart, the Fed, has done. This is despite the fact that the ECB’s balance sheet—or stash of European bonds bought with pseudo-euros—is an outrageous 40% of GDP versus “only” about 20% in the case of the Fed (GDP represents a country’s total economic output). "
The ECB has FAR more transparency than the FED 40% vs 20% is the best lkie that they can get away with.

"It’s true that Europe’s chronically flaccid economic pulse has faded one more time (European economic “liveliness” almost makes a corpse look animated). As a result, the number of negative-yielding bonds (the ultimate Alice In Wonderland financial condition where borrowers charge lenders to use the latter’s money) is once again swelling. The total value of these legalized investor extortion instruments is now $11 trillion, most of them from European issuers. This is up from the trough of $6 trillion last year "
Americans are amazed that their stock market is rising. It's the capital flight, stupid.

"As the no-nonsense financial commentator Danielle DiMartino Booth, former adviser to ex-Dallas Fed president Dick Fisher, recently wrote: “Not to beat a very dead horse but negative interest rates in Japan and Europe were supposed to have generated virtuous outcomes.” (Emphasis hers.) In other words, these radical policies, that were designed to stave off the ravages of the Great Recession and stimulate healthy economic growth, continue to fail to bring home the mail. "
Not true. ALL of this printing and NIRP is done to finance the pensions and salaries of the eurocrats.
"Many pundits have reacted to this about-face angrily and are accusing Jay (not Jerome) of caving into political pressure from the meddler- (and Tweeter-)-in-chief. Others have screamed that he has done exactly what he said he wouldn’t do by trying to sooth the stock market with dovish utterances once it was down about 20% from its September peak."
Powell discovered that the slide would NOT stop until it overshot historical norms at about an 80% reduction (Hussman)

" Whenever I was asked (and often even when I wasn’t) how long the Fed would tighten, my simple answer was: “until something breaks”. It’s fair to say that a lot of things broke—make that shattered--in the financial markets "

Wall Street abandons fracking, "The Wall Street Journal reports that the shale industry only saw $22 billion in new bond and equity deals, down by more than half from 2016 levels, which was a much worse time for the market."
"For instance, the IEA estimates that the shale industry posted cumulative negative free cash flow of over $200 billion between 2010 and 2014."

So, the more that fracking collapses, the closer we are to invading Venezuela.
In a general sense, the worst CBs are in the States with the highest pension costs. Just as QE bought a little more time,,,, NIRP and ZIRP bought a little more time,,,,, the great mass of bureaucrats and beggars hope that MMT will buy a little more time.
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