Author: Global/Slant

Headline:
“The Man” is “Playing With Fire”

WHAT IS “THE MAN” DOING?

1. Printing Money…Literally…Paused…For Now…Still Re-ivesting Principal/Proceeds from maturing securities to maintain $4.5T balance sheet size.

2. With that freshly printed money [of which there were never any quantitative limits] “The Man” is buying government debt [treasury notes and bonds] to purposely lower interest rates since 0% just is not low enough to adequately stimulate final demand.

3. As the largest purchaser of U.S. federal debt [30% of all new issues] “The Man” is purposely INCREASING the price of that debt [making it more expensive for you to acquire] in order to dis-incent you from purchasing “risk free” assets. The idea is to direct you toward investing in riskier assets [i.e. equities] because “The Man” knows what’s best for you and the general economy.

4. “The Man” receives interest payments from “The Man’s Father” [federal government]. “The Man” then automatically returns that interest income to his “Father”. So basically…”Father” pays ZERO interest on his IOU’s…which…as a reminder…were purchased with newly printed [un-earned and non-productive] dollars.

BTW…it is against the law [not that “The Man” really cares about the law] for “The Man” to directly purchase debt from “Father”…so he simply acquires it in the secondary market in order to maximize market price impact. “The Man” also allows Wall Street investment banks to “front run” its purchases to assure trading profits.

5. “The Man” then prints more money to buy your mortgage [35% of the U.S. residential real estate market] in order to free up capital on the banks’ balance sheets. That “freed up” capital is then channeled back to “Father” in the form of aggressive fines, since 2009, currently totaling over $128B and counting.

The fines are a result of, according to “Father”, bank malfeasance leading up to the 2008-9 residential real estate/national economic crash. That malfeasance initially escaped the purview of “The Man” and many other regulators but, apparently, they finally “figured it out”. In the meantime the taxpayers handsomely compensated the regulators for failing to properly execute their jobs in the many years pre-dating the housing crisis.

6. “The Man” frequently tells us how poorly the economy is performing despite a mountain of evidence to the contrary. As a result interest rates are maintained at an artificially low level so “Father” can minimize the interest payments on his ever increasing $17.5T pile of national debt.

Furthermore, the artificial suppression of interest rates has initiated, and maintained, the largest PRIVATE to PUBLIC wealth transfer in modern economic history.

From the Private Pocket: Individual Savers [interest INCOME on “risk-free” securities effectively extinguished].

To the Public Coffers: Federal Government [interest PAYMENTS on federally issued iou’s effectively extinguished].

7. “The Man” then bullies other countries to initiate the same monetary behavior as the United States because “The Man” knows not only what is best for Americans…but for foreign countries too. “The Man” knows best even though many of “The Current Men…and Women [i.e. Fed Chair Yellen]” resided at the Federal Reserve in 2007-9 and frequently reassured that all was well…while the economy simultaneously tanked. Sort of like “whistling through the graveyard”.

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WHO IS THIS “MAN”?

Two Short Answers:

“The Man” = The Federal Reserve Board of Governors.
“Father of ‘The Man'” = Federal Government.

Collectively…let’s just call them the “Power Elite”.

Of course, the “Power Elite” is so much more than just the Federal Reserve and the federal government. Loyal supporters must be initiated to proselytize, deliver and execute the message.

Federal government employees with little/no incentive to excel or succeed…yet with little fear of losing their jobs…are the first line of “low hanging fruit” to harvest support for their monetary policy experiments. Their absolute obedience to “The Man” and “Father” is steadfast.

However…there is more power to be “had”…actually necessary. The general public must somehow be “reeled in” to support this finely crafted DC marketing message. But how? Recently, an ideal solution has been elevated to an artful status…to tap into the legitimate, untapped power of the voting population’s absolute ignorance and disgust for the entire political/economic process.

You see while the power elite publicly implores you to engage [i.e. voting] they privately giggle with joy at your non-participation [less than 25% national voter turnout for November 2014’s mid-term elections].

In a cruel twist the voting population’s out-sized ignorance grotesquely increases the influence and reach of “The Power Elite”…as fewer of the electorate scrutinize the serial crony-ism and back office deals that define DC/Beltway/Federal Government…and set national and global economic policy.

SO REALLY…WHO IS THIS OTHER MASSIVE APPENDAGE OF “THE POWER ELITE”…”THE MAN”?

THE SILENT MAJORITY…THIS UNAWARE ACCOMPLICE…THAT PASSIVELY “SUPPORTS” THIS ABSURD ECONOMIC POLICY …MOST LIKELY…IS YOU.