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29 באפר׳ 2023

The changing of the Fed chair is absolutely meaningless as far as policy is concerned. Jerome Powell will continue the same exact initiatives as Yellen; stimulus will be removed, rates will be hiked and the balance sheet will be reduced, leaving the massive market bubble the Fed originally created vulnerable to implosion. Equities in particular display the behavior of an out of control bullet train similar to the 2006/2007 bubble, or even the delusional exuberance prominent before the crash of 1929. All of this optimism is dependent on two things – dumb blind faith that all investors will continue to act in perfect concert to always “buy the dip”, and, continued faith that central banks will forever step in to obstruct and reverse any market correction.

An observant person, however, might have noticed that central banks around the world seem to be acting in a coordinated fashion to remove stimulus support from markets and raise interest rates, cutting off supply lines of easy money that have long been a crutch for our crippled economy. The Bank of England raised rates this past week, as the Federal Reserve indicated yet another rate hike in December. The Europeans Central Bank continues to prep the public for coming rate hikes, while the Bank of Japan has assured the public that “inflation” expectations have been met and no new stimulus is necessary. If all of this appears coordinated, that is because it is.

Fed policy is not dictated by the Fed chair, and it is certainly not dictated by biden. As former chairman Alan Greenspan openly admitted, the central bank does NOT answer to government, it is an autonomous policy making machine. Fed chairs are as easily replaced as lawnmower parts; they are mascots for the banking system, nothing more. Once they are “nominated” by the president, they take their orders from another source entirely, and I would even question the validity of the nomination process and how the original list of candidates is chosen. For the real puppeteers at the Fed, one would need to look to an organization outside the U.S., called the Bank for International Settlements.

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