QUESTION: Mr. Armstrong; No person is aware of historical past higher than you. Will QE proceed if we find yourself in struggle? It appears there can be no selection.
Thanks to your very enlightening weblog.
PG
ANSWER: Sure. The Fed was “directed” by the White Home to hold out QE throughout World Warfare II. They have been to stop rates of interest from rising and the debt rose. That lastly led to the Federal Reserve breaking with the White Home after the struggle after they anticipated it to proceed for the Korean Warfare. That’s when the Fed asserted its independence.
This time, we might have a special drawback. Because the struggle unfolds in Europe, the capital will flee as traditional to the States. However the cash provide should enhance as a result of the greenback will grow to be the one viable forex nonetheless standing. That’s the reason you might be witnessing the pound and the euro collapse. Issues will unfold otherwise this time. The Fed has been elevating charges to battle inflation that can fail as a result of this has to do with shortages – not hypothesis.
The October 3, 2022 Emergency Assembly was closed to public commentary by Order of the Board of Governors as a result of the issues fell underneath exemption(s) 9(A)(i) of the Authorities within the Sunshine Act (5 U.S.C. Part 552b(c)), and it was decided that the general public curiosity didn’t require opening the assembly. That mentioned, the Fed is confronted with a triple disaster – liquidity, banking stability, and an inevitable Sovereign Debt Disaster. As rates of interest have risen based mostly on home inflation charges, concurrently, the upper charges have undermined each European banks in addition to Rising Markets. The Federal Reserve has grow to be the DEFACTO central financial institution of the world.
It is a disaster comparable partially to 1927 when the European central banks lobbied the Fed to decrease charges due to their debt disaster. They lowered charges to accommodate Europe and that was then blamed on the Fed for creating the 1929 increase. That is additionally why FDR then seized management of the Federal Reserve and transfer the pinnacle to Washington and made the Chairman subservient to the President.
I do know so many blame the Fed for all the pieces. They’re truly facilitating Congress. The Fed has no management over fiscal spending or the debt stage. Ultimately, it’s actually the debt that has grow to be the cash provide that merely pays curiosity.
There was no US paper cash earlier than the Civil Warfare. The primary problems with paper cash have been truly a hybrid bond – they paid curiosity. The time period “dollar” developed for “demand notes” that got here later as the price of the struggle rose. They not paid curiosity so what was on the again was simply inexperienced ink – no rate of interest desk to point out what the word was price.
I might be doing a full report on this topic for the WEC. It’s advanced, but exceptionally attention-grabbing for what we face.
