FED to the Wolves
Democrats Prepare To Unleash Hell On Fed Chair Powell For The Coming Recession
https://burningbright.substack.com/p/bright-brief-july-26-2022
Excerpt:
That headline was published by ZeroHedge this week, and sets us up nicely for the topic at hand for today’s Bright Brief.
Ain’t Game Theory a bitch?
Some weeks ago, during the course of my occasional ramblings on Truth Social, I was commenting on one of the major inflection points I see coming in the 2022 Cognitive Front, which is another term I’ve been throwing around lately in reference to the psychological aspects of the Shadow War—that between sovereignty on both a personal and national scale, and collectivist globalism.
Many in this movement have pointed to the fact that things, well, they aren’t really going so well for [them] of late, from a public optics perspective. Foreign policy has morphed from having a look of vague and confusing (to normies) antagonism during the Trump Administration to pitiful desperation, incompetence and inaction during the Biden Admin. Culturally, the United States is still in the midst of a social divide on the basis of race-based politics and entertainment, gender identity confusion—also known as the war on the English language and all manner of logic, reason and consistency—public education, and the role of government and government-adjacent institutions in our society.
More important than any of those negatives, however, the thickest bit of egg the current “rulers” have on their faces comes in the form of Inflation, which is raging out of control, most notably in the areas of food and energy—also known as the two most important components of human consumption and societal stability. You see, while folks like us get riled up about government malfeasance, pharmaceutical corruption, a two-tiered justice system and the odd bit of human trafficking, much of that, unfortunately, escapes the notice of your average 40-hour per week American, living paycheck to paycheck.
What does not escape their notice, however, is the price of, well, damn near everything.
Now, back to that inflection point I was rambling about some weeks ago. As we near the 2022 Midterms, I believe one of the key narrative battles we will see play out in the national media is, for a change, not going to be between “our” side and [theirs,] but rather between the Biden Admin, its Controllers and its corporate media defenders, and the economy itself, best represented most literally by the Federal Reserve bank.
You see, when the lender of last resort becomes the excuse of last resort, you will know that our collective enemy has grown desperate indeed. After all, few institutions have been more responsible for expanding and solidifying their control over the populations of once-sovereign nations. By saddling us with crippling debt as a fact of life we’re all meant to calmly orbit around—or be crushed under—they have been able to keep us on a perpetual treadmill of struggle and servitude.
In the current narrative, inflation has gone from non-existent, to transitory … to the FED’s fault. And this isn’t Trump and company saying it. It’s the very politicians and agency heads who kicked all of this nonsense off in the first place.
On the one hand, the Biden Admin is correct. The Federal Reserve IS to blame for record inflation, and the continued exposure of that fact to the normie hivemind can only be counted a good thing.
On the other hand, let those of us in this truth community not forget the fact that the initial mass spending package meant to address the disruption of the global scamdemic came under the Trump Admin.
Now, this either means that Donald J. Trump is as foolish, irresponsible and corrupt as them … or, far more likely, part of Operation Warp Speed included a planned, long-term demolition of the Federal Reserve central banking apparatus and its iron grip on the micro and macro-scale production of our society.
With this reading of events, the short-term economic damage that will result in the dismantling of said fiat debt-based monetary system will be significant, and possibly even severe in some sectors. That said, Trump accelerated a train that was already screaming toward the end of the tracks they had laid out for us, departing publicly before the very, very public “crash.”
I do not think this happenstance.
The biggest takeaway for me from this Dem and MSM turn on the Federal Reserve bank is that this is the biggest sign yet of a larger D party death spiral. The public might tune out politics as often as they can—and who can blame them—but when said public is suffering under the yoke of abject tyranny or obvious incompetence, the last thing they want to see is a circular firing squad, wherein one faction of the entrenched Deep State begins passing the fiat buck onto the next.
You see, even if the aforementioned general public doesn’t keep abreast of all the pitiful and infuriating happenings on the Executive and Legislative stages, they are absolutely aware of how fiscally irresponsible the current leadership has been, proxy or otherwise. There is a reason Biden’s public approval ratings—published in the MSM, as well—have hit record and near-record lows each of the last few months. To them, if Trump’s stimulus package was seen as a necessary stop gap during the height of the COVID scamdemic, Biden has been seen as pouring gasoline on the dying coals of a fire that had already all but burned out.
The only reason, optically, this Admin has not spent even MORE money taxpayers haven’t even earned yet is because they have been blocked from passing their most extreme spending packages by two moderate Dems in the Senate over and over again, a trend that has received a LOT of MSM, and thus normiesphere attention.
It could be argued that the Senatorial red line represented by Kyrsten Sinema and Joe Manchin is representative of a more literal red line relating to continuity of government procedures. Patriots may have accelerated [their] exposure, but I do not believe they’ve accelerated our doom.
(Maybe Patel Patriot could do some digging into these two “moderates” and see who they’ve been taking meetings with in recent years.)
Either way, there is no doubt in my mind that this is by design.
Optically, the Dems control two of the three branches of the U.S. government, and they ostensibly control the two that have the biggest immediate impact on the general public, with the Supreme Court acting as a final stop gap to remedy—not prevent—abuses of power and governmental overreach.
Why, then, have they only been able to get things done that have irrevocably destroyed their reputation among the very public they need to endear themselves to—or at least mislead—on the doorstep of the most significant Midterm election cycle … possibly ever?
Optics are important, and theirs are less than stellar at present.
Expect rhetoric—both Dem and MSM—against the FED to pick up steam in the coming weeks and months, as we race toward the midterms and as they tumble, ass over heel as they flail about wildly, trying to find purchase in a crumbling cliff of their own making.
They blame the FED not because it was a part of their plan. They blame the FED because, when a liar runs out of the lies he’s gilded himself in, he must resort to telling truths he used them to bury in the first place.
What we’re witnessing is the beginning of their final game of economic musical chairs. And when the music does stop, in the form of a very real, very dramatic crash or near-crash of the global financial system, all eyes will be on all of [them,] while Trump, Putin and those who would rebuild from said system crash will be waiting on the sidelines, or, more appropriate, circling like carrion birds.
Ain’t Game Theory a bitch?
Well. Only if you’re on the wrong side of it.
China Has a Crisis Brewing – Will It Be the Final Straw for Global Economy?
China may be heading for an encore of the 2008 subprime crisis.
Excerpt:
The ‘Dragon’ enters an already troubled world: it looks like the China story is going to jolt the global economy like a Bull in a China shop, and no one knows the magnitude of the damage.
Supply-side disruptions and real estate developer defaults have been in the news since last year, but the world has been busy with the Russia-Ukraine war and global inflation. Economists and fund managers have so far been mainly concerned about a recession in the US & Europe and the debt crisis in smaller countries. Well, China may just deliver a nasty shock. Nothing seems to be going right and the troubles are just getting bigger.
Snapshot
Economists have been concerned about a recession in the US & Europe and the debt crisis in smaller countries. Well, China may just deliver a nasty shock.
Last year, China’s largest real estate company, Evergrande, with a debt of nearly $300 bn, defaulted on its bond repayments. Real estate is now sinking the whole country.
There was a record withdrawal of $43 billion by foreign investors in the first quarter of 2022 as the interest differentials widened. With the ‘Zero COVID’ policy, the economy will continue to shrink, risking further flight of capital.
Since last week, homeowners have been refusing to pay mortgage EMIs in 91 cities involving more than 300 projects, as developers have failed to deliver homes. China may be heading for an encore of the 2008 subprime crisis.
Local governments are broke. They have a borrowing of $7 trillion by way of outstanding bonds and borrowings, in addition to a funding gap of $1 trillion.
China’s total debt is bursting through the seams, standing at 264% of its GDP (corporate and individual debt included).
How Real Estate Has Crushed the Economy
Last year, China’s largest real estate company, Evergrande, with a debt of nearly $300 bn, defaulted on its bond repayments. Real estate is now sinking the whole country. The sector contributes more than 25% to the Chinese GDP. Over the years, China has created a structurally imbalanced economy with large exposure to real estate. As much as 78% of household wealth is in the form of real estate holdings. Families pool in resources to buy homes, and thus house ownership has a huge significance for the Chinese people. Since last week, homeowners have been refusing to pay mortgage EMIs in 91 cities involving more than 300 projects, as developers have failed to deliver homes. China may be heading for an encore of the 2008 subprime crisis.
The total banking exposure to real estate stands at a whopping $9.2 trillion. Default by homebuyers and developers will spin up major banking stress in China, which is likely to have a global impact. For a couple of months now, rural banks in Henan have frozen the deposits of the public as they are unable to pay. Local politicians are protecting the defaulting banks amid charges of diversion of funds. Shockingly, the Bank of China has declared these deposits as ‘investment products’ and they can’t be withdrawn.
Local Governments are Broke
China is behaving like a classic socialist economy, where no one owns anything and everything belongs to the state. The People’s Liberation Army (PLA) has deployed tanks on the streets to keep away people whose deposits have been frozen by the defaulting banks. The military and the police are protecting the defaulting banks and developers against citizens, who are now at risk of losing their life savings.
The central government is in no position to help as China’s total debt is bursting through the seams, standing at 264% of its GDP (corporate and individual debt included). Local governments are borrowing funds at 10%, while the bank rate for savings accounts is under 1% as such these 10% interest bonds would qualify for junk bonds.
Trust Issues
China’s ‘Zero Covid’ policy is ruining the mental well-being of individuals and the economic well-being of the nation. Frequent lockdowns have resulted in a GDP growth of only 0.4 % in the last quarter. Entrepreneurs and businesses are suffering on account of supply disruptions and production schedule breakdowns. Post-COVID-19, many global manufacturers have exited China and the world is looking for new suppliers. The global auto industry has had to cut production on account of semiconductor shortages.
.....Sino-Australian trade has taken a hit post the COVID-19 pandemic. And Rishi Sunak, in his manifesto as a candidate in the UK prime ministerial race, has unequivocally stated his anti-China stance. De-globalisation and a growing anti-China sentiment may adversely impact Chinese trade and investments in the medium term.
China Is Doling Out Loans, But Its Own Economy Is Struggling
Chinese entrepreneurs are also growing disillusioned with the communist regime. Many millionaires are in a hurry to leave the country. The Xi Jinping government is gunning for capitalist entrepreneurs. It looks like there is growing confusion over political ideology – should China work towards becoming the numero uno economic power or go back to its hardcore communist practices? The demographics isn’t in favour of China either as the working population is shrinking. In the next 15 years, as much as 45% of the Chinese population will be over 60 years of age, and thus, government spending will increase massively to provide for an ageing population.
To prop up a sagging economy, the Chinese government announced a stimulus package of $200 billion to fund infrastructure and construction activities. The only problem is that China is already reeling under huge debt and the local government debt crises are further stressing the system.
China is pursuing an expansionary monetary policy contrary to the Fed policy. It went for rate cuts while the Fed is and will be raising interest rates. A stronger dollar will also put pressure on the Yuan and the Renminbi. There was a record withdrawal of $43 billion by foreign investors in the first quarter of 2022 as the interest differentials widened. With the ‘Zero COVID’ policy, the economy will continue to shrink, risking further flight of capital.
China has been pursuing a global expansionary policy and is doling out loans to smaller countries and funding international projects, but its own finances back home seem to be in the doldrums. With struggling banks, real estate collapse, supply-side disruptions, flight of capital, rising current account deficit and fiscal deficit, nationwide public outrage and broke local governments, it looks like the Chinese story is over for the time being.
Will China Deal the Death Blow?
Expect China to show below-average growth rates in the next few years. One doesn’t know the exact magnitude of the financial and political stress in China, but it is very evident that it is on the brink of delivering a rude shock to the global economy. The world is likely to slip into a long recession as the top six economies, excluding India, account for 60% of the $100-trillion global economy. With China also getting into a flat or negative growth, things look bleak. Besides, many countries are staring at severe debt crises, which are likely to get worse with rising interest rates and a strong dollar.
******
IMO it is only a matter of time before China implodes due to its debt. Coupled with foreign companies leaving looking for safer “pastures” and an aging population the death nail in globalism is one hammer strike closer to happening.