This article was written by Brandon Smith and originally published at his Alt-Market.com site.
Editor’s Comment: Everyone is trying to save face as the next era is forcefully introduced. Everyone takes a hit from the economy, some are wiped out. Currencies rise and fall, but central bank control remains.
This strange and unprecedented monetary experiment, as Lord Rothschild recently called it, will have major consequences; it will change the lives of most Americans forever, but we are all just to quietly see it tip-toe in under distraction-cover of a dozen other sensation world events.
The Central Banks Are Now Ready To Launch Their ‘Brave New World’
by Brandon Smith
The latest Federal Reserve meeting in Jackson Hole, Wyoming, is over and so far it would seem that the general investment world is not too happy about Janet Yellen’s statements as well as those of other Fed officials. In fact, many people are looking for some simple clarity as to what the central bank is actually planning.
Most importantly, investors want to know why the Fed is suddenly so adamant about continued interest rate hikes in 2016. Only a couple months ago, almost everyone (including alternative economic analysts) was arguing that the Fed would “never dare” to raise rates again so soon, and that there was no chance of a rate hike so close to the presidential elections.
Instead, investors have been greeted with surging rate-hike odds as Fed officials openly hint of another boost, probably in September.
As I have been saying for years, if you think the Fed’s motivation is to protect or prolong the U.S. economy, then you will never understand why they do the things that they do. Only when people are willing to accept the reality that the Fed’s job is to undermine the U.S. economy can they grasp central bank behavior.
Here is the issue that scares mainstream markets — many day traders are greedy, but not necessarily dumb. They KNOW full well that the only pillar holding up stocks at record highs has been central bank intervention. A vital part of this intervention has been the use of near-zero interest rates. That is to say, cheap and free overnight loans through the Fed have allowed banks and other corporations to remain “solvent,” and these loans have been the fuel companies have used for corporate buybacks of stocks.
Corporate buybacks have been a primary driver in the bull market rally that supposedly saved the world from the ongoing deflationary destruction of capital. In 2015, buybacks reached historic levels and garnered one of the largest equities reversals in history. While these buybacks do little or nothing to heal the economy on Main Street, they certainly do wonders for equities portfolios. By buying up their own shares, corporations boost the value of remaining shares through a brand of legal trickery. And, in the process, these corporations also boost the overall perceived value of global stock markets.
As Edward Swanson, author of a study from Texas A&M, noted on stock buybacks used to offset poor fundamentals:
“We can’t say for sure what would have happened without the repurchase, but it really looks like the stock would have kept going down because of the decline in fundamentals… these repurchases seem to hold up the stock price.”
Yes, to us he seems to be stating the obvious, but for the average American, a green stock market means a recovering economy. There is no deeper question of why the markets are rallying, and this lack of understanding is dangerous for our country.
Even marginal hikes in borrowing costs will kill the party and, while people not involved in finance and stocks are oblivious, day traders know exactly what is going on. This is the reason for the underlying panic felt by the investment world at any hint of a rate hike by the Fed.
As we saw with the limited audit of TARP, the Fed was pumping tens of trillions in overnight loans into distressed banks and companies, even foreign companies overseas. I suggest that if a FULL audit of the Fed were ever conducted, we would find tens of trillions more in overnight loans since 2008.
Imagine for a moment if those loans never stopped. Imagine that such loans have been an ongoing mainstay of our financial system and stock markets in general. Now, ask yourself, what would happen if the companies reliant on these free loans suddenly had to pay interest on them?
Think about it; what would the interest cost be on a mere .5% to 1% of $16 trillion in overnight loans through TARP? What would the cumulative cost be on all the loans banks and companies need to survive every quarter? In the end, corporations would either drown in billions of dollars in exponential debt or they would have to stop accessing loans from the Fed. Once the loans stop, the stock buybacks stop. Once the buybacks stop, stock markets crumble.
Without free cash from the Fed, the bubble in stock markets will finally and thoroughly implode, crashing down to meet all other fundamentals.
Why would the central bank pull the plug on life support to stock markets? There are multiple reasons, but a top reason is that this is the Federal Reserve’s modus operandi. They consistently seem to raise rates into recessionary conditions that they also tend to create. In essence, the Fed likes to acclimate and addict markets to low interest percentages, and then increase those percentages to agitate and elicit a chaotic reaction.
In my article Brexit Aftermath – Here’s What Will Happen Next, I stated:
“Really, the only safe measure the Fed can take from now on is to do nothing. I highly doubt that they will do nothing. In fact, even in the face of the Brexit I still believe the Fed will raise rates a second time before the end of the year. Why? This is what the Fed has always done as recession takes hold. Historically, the Fed raises rates at the worst possible times. As with the Brexit, I am going to have to take the contrary position to most analysts on this.”
What analysts out there need to understand, whether they are independent or mainstream, is that a great shift in central bank policy and attitude is coming. Christine Lagarde at the IMF calls it the “economic reset,” some Fed officials, like Atlanta Fed President Dennis Lockhart, state that central banks are entering a “brave new world.” These are highly loaded phrases that represent a drastic overhaul of the global financial system; an overhaul that is quite deliberate and inevitably destructive for certain nations and economies, including the U.S.
If we examine the policy pursuits and recently stated goals of central banks around the world, and those statements made after the Brexit referendum, we find that a process of complete global centralization is underway. This includes a push for all central banks to “coordinate policy” under a single directive.
Alternative analysts already know that all central banks are ALREADY covertly coordinated by the Bank for International Settlements. So, when central bankers call for policy coordination in the mainstream press, what they really mean is, they want the existing coordination that is covert to become publicly accepted and celebrated. They want that which is illegal to become legal. That which is morally reprehensible to become morally relative.
Central bankers also want their position of authority over the global economy to become a public priority. Ten years ago, when I asked average people what they knew about the Federal Reserve, most of them responded with confusion. They had never heard of the institution, let alone what its function was. Today, almost everyone knows about the Fed, but there is also an assumption attached that central banks, whether they are successful or not, are supposed to maintain economic stability. Keep in mind that global stocks barely vibrate today until a central bank somewhere publishes a policy statement. This is not how investment is supposed to function. The jawboning of central banks should be mostly meaningless.
The brave new world of central banking is a plan to expand on this corrupt correlation. That is to say, the general public and the mainstream should be questioning whether central banks should exist at all. Instead, people are arguing over what policies are better for central banks to adapt. The existence of central banks is considered an absolute. The masses are only given the option to debate what faces and what hats central banks should wear. If we get anything out of this deal, we only get to choose the form of our destructor.
I should point out also the growing trend in the mainstream media of criticism against the Fed. This is a relatively new thing. For the past several years the more effectively critical the alternative media became against the Fed, the louder MSM talking heads would cheerlead for the establishment. With central bankers becoming more open about their global shift into something “different”, a new program of stabbing at the Fed has been initiated. This is not a coincidence.
As I have argued in various articles, the Fed itself may be just as sacrificial to the elites as the U.S. economy. In the process of global centralization, the Fed would eventually have to take a back seat to the IMF, World Bank and the BIS. It is not surprising to me in the slightest that the bought-and-paid-for mainstream media is changing gears and attacking the institution they once desperately defended. Priorities are evolving.
I believe that with the advent of a second rate hike in 2016, many conditions will change. The Dow and some emerging markets will no longer enjoy unmitigated support, and they will begin to fall going into the elections. As I have mentioned many times in past articles, Donald Trump is the most likely candidate to take up residence in the White House. Conservatives will be lulled into a temporary euphoria, happy just to have defeated she-demon Hillary Clinton, only to discover that an overall global implosion has entered a new stage. This implosion will of course be blamed on those same conservative movements.
In the meantime, central banks around the world are going to start openly coordinating while the IMF will take up a “leadership role” in managing international policy. Central banks will also be branching out and taking on new powers. As suggested at Jackson Hole, many central bankers are arguing for “new tools” to fight future fiscal downturns, and no, this does not mean negative interest rates. Instead, watch for central banks to change the definition of inflation on a whim, or adjust the relative value of currencies through agreements with other countries instead of allowing free markets to determine values, and watch for complete overhauls in how economic instability is calculated.
What we are heading for is a world in which many nations will suffer from reductions in living standards and where some first world nations will be reduced to third world conditions. In order to normalize increased global poverty, you have to stop calling it poverty and start calling it a “brave new world.” You have to convince the populace that the economic degradation is not a problem that can be solved — rather, it is a problem we must all adapt to and accept.
Be very wary when elites and international financiers mention “global reset,” or a “brave new world,” or a “new world order.” What they are talking about is not a program that is in your best interest. What they are talking about is the deliberate creation of chaos; a slow burning calamity that can be exploited to derive the benefits of even more centralization and even more power.
They will call it random. They will call it coincidence or fate or even blame it all on their ideological opponents. In the end, they will eventually call it a natural progression of events; a social and financial evolution. They will call it inevitable. None of this will be true. There is nothing natural about a totalitarian framework — it is a machine that is carefully crafted piece by piece, maintained by the hands of a select few tyrants and fed with the labor, sacrifice and fear of the innocent.
The only solution is to expunge the parasites from our fiscal body. These institutions and the people behind them should not exist. Most if not all of our sociopolitical distress today could be cured if a “brave new world” meant wiping the slate clean and dispelling financial elites and central bankers into a bottomless pit.
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This article was written by Brandon Smith and originally published at his Alt-Market.com site. Please visit his site or donate to his work.
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HERE COMES THE CHIP, AND A CASHLESS SOCIETY
AND THERE IS NOTHING YOU CAN DO ABOUT IT.
With every changing of the guard; meaning at the end of every eight year Presidential term, the FED raises rates prior to the end of his lame duck session to induce recession; allow the economy to reset, and clear the way for the economic policies of the new President: which begin to bite near the end of his first year in office; with the intent that the business cycle will continue into his second term.
This is the process. EVERY TIME.
At the end of every business cycle, companies buy back their stock. Every time. Its the most effective use of their capital because demand for product and services is in decline.
Every time. 🙂
If the Fed does do a rate hike, they’d better be very, very careful it’s not too much. Even doing one at all might very well be too much.
Why? Because it could burst the humongous debt bubble we are all facing.
Ya you can. Trade your worthless electronic numbers in for real money – gold and silver. Hoard your cash too cuz you will need legal tender to buy food with when the credit money crashes and the ATMs cease to spit out cash. Organize a barter exchange in your neighborhood. The banks will all be closed. Gold and silver reigns supreme as non inflatable money.
Ya you can. Trade your worthless electronic numbers in for real money – gold and silver. Hoard your cash too cuz you will need legal tender to buy food with when the credit money crashes and the ATMs cease to spit out cash. Best to stock up on food now while you still use counterfeit currency. Organize a barter exchange in your neighborhood. The banks will all be closed. Gold and silver reigns supreme as non inflatable money.
The Public could fix it also. STOP FEEDING THE BEAST!!
~WWTI…
Personally I love the FREE MONEY for 15 months at ZERO interest. Two new cards just raised my credit line again today. 🙂
Here is a reminder that unless you have the physical gold in your hand, you don’t own shit.
Xetra-Gold fraud:
https://www.rt.com/business/357890-deutsche-bank-gold-germany/
Unless your brain dead we all can see the writing on the WALL..!!! Also, BO and the ATF just made it a felony for Ammo Manufacturers to use the key chemical in making smokeless Gun Powder, and what does that mean, NO MORE AMMO MADE IN AMERICA AND YOU WILL PAY $500 FOR A 50 ROUND BOX OF 9mm AMMO HERE SHORTLY! BO just declared Civil War on “We the People” and the 2nd Amendment…PERIOD! You better start rising HE*L with your Congressmen and Senators People and NOW..!!! God help us, PLEASE!
I know one thing for certain, if things keep going the way they have been eventually it will come unglued, who knows when, but it will, the amount of corruption and in your face government tyranny is just mind boggling, the lack of reasonable thought from the population is shocking, to the average person who barely pays attention to anything but their social calendar all is well, but if you are paying even the slightest bit of attention things are not right. When the MSM and all its outlets glorify and protect the lack of moral compas, lack of patriotism and color those who have morals and are truly patriotic as fringe right, we have gone over the edge, pile on top of that all the abusive actions of the various bureaucratic government agencies and we are screwed. It wont be pretty when this ball gets rolling and it wont be fun
Most of Everything in America has already come unglued. Many Americans are still in the stages of denial, some in shock, some acceptance which many here are in and ready to take action by being prepared. Those awake know this country is so F*cked.
Just look at any Government agency and all we see is Fascism. The FDA is owned by Big Agra and Big Pharma. DHS is owned by the Zionists, The FBI has become toothless, Justice Dept is owned by the Pres, who is just Puppet for the Globalists. And every contractor from the Military Industrial Complex Mafia, are greedy bastards, wasting US tax payer dollars on worthless BS, and the CIA creating conflict to prop up the MICM’s profits. The Pentagon cannot account for $8-9 Trillion missing Dollars, The IRS has gone rogue, lies and punish opposing political factions, then lie about it.
Look at Hillary and all her corruption at the State Dept, selling her office to the highest bigger for personal profit. They are all in on it, and are fleecing America like a Pirates plunder and rape. The EPA pollutes more than the polluters. Its all BS. Then the Media Glosses over it all with feel good, BS, lying to us.
And the Illegal aliens laughing at us, as they come in and kill our people, steal out shit and walk. And Given food stamps, housing, drivers licenses and voting rights from the Commie Left.
So now we have these dumbed down left wing free shit army dopes going into the voting booth Garbage in Garbage out voting. As an educated person it is damn frustrating listening to the Liars, and watching the thieves all getting away with it, and what do We responsible working Americans get?? A big Fat Tax Bill for their crimes. Its extortion to feed the criminal lying thieves.
~WWTI… Had enough yet? Start voting from the rooftops.
USPO
Not Making any phone calls. Not writing no letters. Not sending no tweets or facebook.
Bring it. The stupid and ignorant must first hurt before they will change their mind.
Can vote for Hillary and force the issue of Gun Control.
ATF announced a delay regarding smokeless gunpowder and to work with industry.A must watch though.
Just look at the 2 Zionist Banking Cabal Biotches in the photo above. That’s the enemy. Get a real good look at them.
~WWTI…
Not too far from a significant event whether it be economic or social.
But, those who have been coming here for a time should not worry and should be well prepared materially and hope the mind in ready.
I think some of these so-call meetings are just BS, putting a false face on things.
I am busy waiting on the EMP, ww3, bio attack, or what ever they plan to unleash. Degal.com. They have a quota to meet starting October 2016-2025. 260,000,000 dead people on the US continent by 2025. Man that’s a lot of death and destruction.
This is why I rate my survival at 25%..My grammar seems to the issue I was told by troll cabingirl prior this one and a few other other post. I will not be taken seriously unless I have a degree in English. Check out whats going on in Turkey, and now in Syria. ww3 starts in Syria. Albert Pike is fullfilling his dreams in south side hell as we get ready for the challenge.
Regards
HCKS.
Keepin it real,
I am betting my chances of survival are even less, honestly dont care really, its not my decision to make, have done the legwork, now its in Gods hands
Hickster, Rate of survival for what? English comprehension? You know the basics, Who, what, when, why, where and how, when you type a paragraph. You throw some comment out there hanging like a chad, dangling as if you like to get people guessing. I usually just pass over your garbled nonsense rambling, and write it off like a homeless person walking down the street, talking to themselves in code encryption. 25% of the 260,000,000? lol That will never happen. The ones who want to kill us are outnumbered 99% to 1%. I think your life expectancy rates will be more dependent on your own self inflictions.
I will guarantee this. Everybody will die one day. Count on that. Even religion can’t save you. Cause nobody has ever been saved. And be sure the Govn’t will still tax you from the Grave.
~WWTI…
Communication is the goal of Speech and the written word.
Crossing T’s, dotting i’s, proper grammar, is for those that live in the make believe world of academia.
Word of advice. Stay away from any Princess who sits upon a pedestal. They are trouble and not worth the hassle. “Let those type of women become someone else’s problem. Not Yours.”
Instead: Find yourself a good water hauling, ammo bearing, gardening, goat milking,
house cleaning, child rearing type of female. She may not be as nice to look at. But when the lights are out it doesn’t really matter.
Now let the fur fly.
Comments are being deep six’ed on this site. Especially if something substantial and off the narrative is expressed. “Guess we must all stay on message or be in fear of the sky is falling.” Or your post not seen. Is that this sites policy?
What some don’t realize is that the sky has always been falling. You are dying from the moment you were born. —So stop worrying about it.—
Civilization has Always had barbarians and nut jobs trying to destroy her. Difference now is the size of the idiots toys to destroy everything and the idiots also seem more numerous.
Obama the savior of “Change” USSA Amerikka gave over 400 million to Iran for hostages. Now how do you think those funds will be used by Iran?
Obama committed TREASON. No consequences.
Hillary intentionally breached National Security. No consequences.
If I were a praying man or woman. I would start praying.
If I were not a praying man or woman. Then I would become one who Does pray.
Idiot rich Banker/Politician pukes running the game really are out to murder the 90% who are not going to go quietly with flue shots etc.
Maybe the sky is falling? “Ouch. Piece of sky hit me head.”
Is this now on narrative? Will post now be seen?
@ IKE: AGREE 100% Having been a career LEO/MP/VFF…..and an adrenaline junkie, figured I’d make it to 30. When that passed, kept upping the age…..just turned 68, you name it, I’ve had it, H/A, ortho injuries, etc. At this point, I’m truely afraid I’m going to wake up dead, and miss all the fun. Everyone on here and like sites, need to find ways to organize, w/o having any snitches, hard to do. IF Trump can win, AND we get a workable Congress, we might just prevail. Research the decision the World Court made IN RE: a reset back to the 13th. Ammend., and restoration of State “Republic” status. Here in SC, all citizens, by law are a member of the 3 levels of State Militia, and we have great 2nd. Laws, Castle Doctrines(s), enhanced after dark back to ‘Common Law’ curteledge. After 50 years w/o religion, have re-upped, thanks to a Marine Raider 1st Sgt(Ret), who holds a MA from Liberty. I do have a princess, on a pedestal, 36 yrs. now….Playmate of the Year type, BUT, tough, willing, w/Algonquin blood, and a touch of Wiccan.
English? We don’t need no stinking English. Spanish is the new American language.
Time to pad your self buy some more ammo cus if this dont work they will do something else till they get er done. And your right Hicks just look at new Zealand 7.1 earth quake today and everyone goes on how it would be a safe place. This is gonna be world wide shtf. And as far as these grammer police trolls all I can say is they prob never get shit stains in their underware cus they’re anal retentive. But they make up for it by the shit they spew out of their mouth.
Don’t take life so seriously, you’re not going to make it out alive anyway!