Posted on 02/10/2013 10:26:58 AM PST by blam
Edited on 02/10/2013 10:35:32 AM PST by Admin Moderator. [history]
The Fed Is Beginning To Remove The Punchbowl
(Excerpt) Read more at marketoracle.co.uk ...
-——when the Fed does eventually tighten up-——
That will happen soon after the next S&P downgrade that will trigger market action.
The DOJ thuggery will not deter the downgrade if things continue. Those with the reins to the markets have more power than the President
the bottom line:
1. uncle sugar is taking away some sugar.
2. uncle sugar will still be spending way more than currenty taken in.
3. commodity prices are increasing.
4. energy prices are increasing.
5. taxes are increasing.
6. obamacare taxes kick in and are increasing over the years.
7. education costs are increasing.
8. jobs in general, and well-paying jobs are not increasing.
9. we are considering amnesty to 11-20 million mexicans here illegally, adding millions to the benefits systems already being told to do more with less.
10. average folks taxes going up through expiring tax policies that helped them, ending deductions and credits/writeoffs.
What is coming is the big squeeze. It’s going to shove what’s left of the shrinking middle class into the poverty class.
The only kink in this scenario is that the largest debt holder of US debt is the Federal Reserve. And they can print their own money ad lib, so no "haircuts" for them.
Yes, and we know that magic funny money is really valuable. The government already paid off the debt with it, because it can do that. ;-)
“We wont default. And bondholders wont pull the plug on us either.
We can and will continue to print (devalue). The plan is to slowly inflate our way out. It will work, but how well it will work is still in doubt.”
I agree we won’t default, that is because our debt is in our own currency.
I agree “the bondholders” won’t pull the plug because the bondholders are two entities, the fed and China.
But I think that IT WILL NOT WORK.
I say that because yes you can rig a market if you are the only participant, but much like the London Whale of JP Morgan, you can never unwind the trades if you are the only participant.
JP Morgan’s London Whale thought he could not lose because he could always rig the game by simply buying more of his underwater positions in an illiquid market. This worked until he could buy no more. Unwinding the positions was a complete disaster.
The federal reserve is thinking that, they can rig the market to zero interest rates and if interest rates tick up a bit, they can deal with that by buying more securities.
However, if they unwind the positions (as they must eventually,) all hell is going to break lose.
The Privately Owned Federal Reserve Bank has a 100 year charter that ends in December 2013. The Fed. Reserve Act is part of a 100 year plan to bankrupt and debt enslave all Americans.
That was repealed about 80 years ago. The Fed has an open ended charter. It is not expiring. Ever.
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