America is being run by an unelected gang of essentially self-perpetuating PhDs. The notion of an economics coup d’ etat is not so far-fetched.
...This entire apparatus is now frozen in place because the Fed’s QE policy amounts to a giant fiscal fraud.
Even if it sticks to the taper, the Fed’s balance sheet will have expanded by 5X—from $900 billion to $4.5 trillion—in 70 months.
Yet it has no intention whatsoever of unwinding this stupendous emission of fiat credit.
Indeed, selling-down its massive piles of treasuries and MBS would ignite the mother of all melt-downs in the fixed income markets, which have gorged on over-valued paper that was priced by the Fed’s huge, artificial bid in the debt markets.
Even if it sticks to the taper, the Fed’s balance sheet will have expanded by 5X—from $900 billion to $4.5 trillion—in 70 months.
Yet it has no intention whatsoever of unwinding this stupendous emission of fiat credit.
Indeed, selling-down its massive piles of treasuries and MBS would ignite the mother of all melt-downs in the fixed income markets, which have gorged on over-valued paper that was priced by the Fed’s huge, artificial bid in the debt markets.
.....And part of this fiscal scam is even more egregious than the Fed’s own acknowledgement that is artificially suppressing the treasury coupons.
What the Fed is also doing is issuing second-hand “greenbacks”— those notorious non-interest bearing IOU’s that financed the Civil War.
Since the crisis the Fed has returned $400 billion of “profits”, including $80 billion each in the last two years, to the US treasury, thereby off-setting upwards of 25% of the interest cost on the Federal debt.
What the Fed is also doing is issuing second-hand “greenbacks”— those notorious non-interest bearing IOU’s that financed the Civil War.
Since the crisis the Fed has returned $400 billion of “profits”, including $80 billion each in the last two years, to the US treasury, thereby off-setting upwards of 25% of the interest cost on the Federal debt.
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