Chris Hedges | Neoliberalism is a DISASTER
https://www.youtube.com/watch?v=ll3YLuxJ8Mk
Chris Hedges: How Republicans, Democrats, and the Media Have Weakened US Democracy
https://www.youtube.com/watch?v=B2jyzp09_g8
When it comes to Inflation, it’s the Fed, stupid
The Bureau of Labor Statistics just released its latest report on the Consumer Price Index. As expected, the data looks bad. The year-over-year increase in November was 6.8%. Inflation is now at its highest level since 1982 -- that is, in almost four decades.
Cue the blame game as media pundits seek to explain away the inflation. Supply-chain bottlenecks are the culprit, they say, together with a tight labor market, pent-up demand from the pandemic, price gouging, and the latest round of covid variants.
On the surface, these all seem plausible explanations for the recent price hikes. Inflation, after all, is a complex phenomenon; there are many variables that factor into the general price level.
For some strange reason, however, few politicians or media pundits care to point out the 800-pound gorilla in the room.
The culprit behind our current inflationary crisis is manifest. The main culprit is the Federal Reserve and its extreme monetary response to the COVID pandemic.
Since the pandemic, the US money supply has increased by a whopping 37%. M2 (the most common measure of the money supply) was $15.5 trillion at the beginning of March 2020. By November 2021, a mere twenty months later, M2 exceeded $21 trillion.
This is the most rapid acceleration in the money supply since World War II.
The graph below (Figure 1) shows M2 over the last 40 years. While the money supply has drifted consistently upward over the last half century, the line goes almost completely vertical from 2020 to the present day.
[Figure 1]
Figure 2 (below) shows Real M2, adjusted for inflation (with 1982-84 dollars serving as the base), from 1959 to the present day. Here too, we see the line take a vertical turn in 2020.
[Figure 2]
If those graphs do not alarm you, they should.
How did the money supply expand so rapidly?
The federal funds rate returned to zero after the onset of the pandemic, of course. But more importantly, Fed Chairman Jerome Powell went absolutely wild with quantitative easing (QE).
As seen in Figure 3 (below), the Fed’s balance sheet soared from $4.2 trillion at the beginning of March 2020, to $8.66 trillion in December 2021. In other words, the Fed’s total assets (Treasurys and mortgage-backed securities) have more than doubled since the onset of the pandemic. The Fed purchased these assets with newly created (out of thin air) dollars. All this occurred, again, in less than two years’ time.
[Figure 3]
The Fed’s balance sheet has increased exponentially before, as the same graph (Figure 3) exhibits. Former Fed Chairman Ben Bernanke famously embarked on a massive program of quantitative easing in the aftermath of the 2008 financial crisis. The Fed’s balance sheet went from $900 billion in August 2008 to $4.1 trillion by the time Bernanke left the Fed in January 2014.
But during Bernanke’s time as Fed Chair, the vast majority of QE never entered the real economy. Most of it was in the form of reserve balances held by depository institutions at the Federal Reserve. Before the 2008 financial crisis, excess reserve balances were negligible -- on average, some $20 billion at any one time. By the end of 2009 there were over $1 trillion (one thousand billion) in excess reserve balances, and when Bernanke left the Fed in January 2014 the number was $2.5 trillion (see Figure 4).
[Figure 4]
Though the Fed’s balance sheet increased by $3.2 trillion between 2008 and 2014, the excess reserve balances of depository institutions increased by some $2.5 trillion. That money never entered the real economy and did not even count as part of M2.
Therefore, despite Bernanke’s drastic rounds of QE between 2008 and 2014, M2 never increased at anywhere near the pace that we have witnessed in the last two years. M2 was $7.8 trillion at the beginning of October 2008. By the end of Bernanke’s term in January 2014, M2 was $11 trillion. In over five years’ time, the money supply increased 42%.
Powell’s Fed, since March 2020, has superintended a 37% increase in M2 -- in only a third of the time that it took Bernanke’s Fed to witness similar growth. Bernanke never struggled with significant inflation; Powell is staring down the worst inflation in more than a generation.
What accounts for the discrepancy?
First, QE under Powell has been more intense and more concentrated than Bernanke’s QE. The Fed under Bernanke grew its balance sheet by $3.2 trillion in a little less than six years; Powell’s Fed has grown its balance sheet by $4.5 trillion in less than two years.
Moreover, unlike the QE under Bernanke, a significant amount of Powell’s quantitative easing has entered the real economy. Reserve balances are up since the beginning of the pandemic struck (Figure 4), but only by $2.5 trillion. The Fed’s balance sheet, meanwhile, grew by more than $4.5 trillion.
Translation: M2 has risen a lot faster under Powell than it ever did under Bernanke (see Figure 1).
Powell finds himself in an extraordinarily difficult predicament. Though the Dow is at an all-time high and the official rate of unemployment rate remains low, economic growth has been sluggish. The economy grew at an annualized pace of only 2% in the third quarter, far below expectations. If the Fed raises interest rates -- even if only a little -- it would undoubtedly risk bringing the economy into recession. However, to bring inflation under control, the Fed must raise rates in 2022, and the rate hike must be far more than a quarter of a percent here or there. During the last inflation crisis, 40 years ago, Fed Chairman Paul Volcker sent the federal funds rate above 20% (Figure 5). The rate today is less than a quarter of a percent. Clearly this is not sustainable. Yet even a mild hike in interest rates has the real potential to wreak havoc in asset values, the mortgage market, the bond market, and the government’s ability to finance its enormously unsustainable debt. But if Powell doesn’t act -- if QE doesn’t rapidly end and interest rates do not move significantly upward -- the Fed risks inflation heading into double digits in 2022, just as Americans saw in the 1970s.
[Figure 5]
The chickens, in other words, will soon come home to roost -- whether in the form of a new economic recession or via double-digit inflation. Either outcome is a disaster for the Biden administration, which will assuredly (and not entirely unfairly) receive the bulk of the blame from the voting public. But Trump, if he had won a second term, would have also faced a major inflation problem. Though a healthier supply chain and labor market might have allayed some of the inflationary pressures under a second Trump term, the chief cause of inflation – growth in M2 – would have been unchanged.
Make no mistake, the Fed is the true culprit behind our latest inflationary crisis.
All graphs via Federal Reserve Bank of St. Louis
EVERYTHING IS ABOUT TO GET WORSE, ECONOMIC COLLAPSE, HOMES DESTROYED, SHORTAGES, QE, STOCKS
THE REAL ECONOMY:
Tucker: This is impossible to ignore
https://www.youtube.com/watch?v=oWMAOylxXpw
THIS IS THE STRONGEST ECONOMY EVER, BUY BUY BUY, HOME PRICES 10X INCOMES, WEALTHY TAKING IT ALL
L.A. Detective: ‘Safer to Hang Out with Alec Baldwin on a Movie Set Than to Go Shopping in Los Angeles’
“Our entire crony capitalist system, Democrat and Republican alike, has become a kleptocracy approaching par with third-world hell-holes. This is the way a great country is raided by its elite.” ---- Karen McQuillan AMERICAN THINKER.com
Most recently and dramatically, Biden lied about his knowledge of his son's shady dealings, lied about his own involvement in corruption and bribery, and lied about his current presidential agenda and what he wants to implement in regards to energy, fracking, court-packing, health care, education, and COVID among other issues.
MARK CHRISTIAN
THE BIDEN KLEPTOCRACY
American people deserve to know what China was up to with Joe Biden, especially when Beijing had already shelled out millions of dollars to Biden family members — including millions in set-asides for “the big guy.” What else is on that infamous Hunter Biden laptop? The conflicted Biden Justice Department cannot be trusted to engage in any meaningful oversight on this issue. We need a special counsel now.
TOM FITTON - JUDICIAL WATCH
Joe Biden didn’t do anything wrong? A time-honored method of taking bribes is having them paid to a family member, usually in exchange for nominal or nonexistent services. It is comical to watch “reporters” pretend not to understand this. MONICA SHOWALTER
“Protect and enrich.” This is a perfect encapsulation of the Clinton Foundation and the Obama book and television deals. Then there is the Biden family corruption, followed closely behind by similar abuses of power and office by the Warren and Sanders families, as Peter Schweizer described in his recent book “Profiles in Corruption.” These names just scratch the surface of government corruption. BRIAN C JOONDEPH
There’s also the little problem of Hillary’s incredible corruption (making her and Biden birds of a feather). And of course, the fact that Hillary’s unsecure server damaged national security in a way that would have seen an ordinary, politically unconnected person spend the rest of her life in prison—which, not coincidentally, is where Papa Joe belongs for using his debauched son Hunter as the bagman for decades of anti-American orruption. ANDREA WIDBURG
What’s really baffling is Hunter’s success with women. Despite being a total loser with a terrible drug habit and some weird sexual perversions, Hunter managed to seduce his brother’s widow, her sister, a stripper, and the woman he married, all over the course of four years. It’s enough to make one think that Hunter’s charm had less to do with the man himself and more with the benefits flowing from the Biden family cartel. ANDREA WIDBERG
Biden lied about his undergraduate degree and his majors, lied about his rank in law school, lied aboutscholarships and educational aid he had received, lied about his stance toward the Vietnam war while in college, lied about his plagiarism of other politician's writings and speeches, lied about the circumstances around his first wife's fatal accident, lied about how he met his second and current wife, and lied about the affair they were having when they were both married. MARK CHRISTIAN
Most recently and dramatically, Biden lied about his knowledge of his son's shady dealings, lied about his own involvement in corruption and bribery, and lied about his current presidential agenda and what he wants to implement in regards to energy, fracking, court-packing, health care, education, and COVID among other issues.
MARK CHRISTIAN
Biden Megadonor Scores $500 Million Federal Loan for Solar Company
Politically connected First Solar also secured $3 billion in loan guarantees from Obama administration
A solar energy company owned by a Biden megadonor received a $500 million government loan to build a manufacturing facility in India, the Biden administration announced this week, raising questions about whether the company's political clout played any role in the financing decision.
The U.S. International Development Finance Corporation granted the loan to First Solar, which is owned by billionaire Walmart heir Lukas Walton, to build a solar module plant in India. Walton contributed over $300,000 to President Joe Biden's campaign last year, and over $100,000 to the Democratic National Committee, according to campaign finance records.
The loan to First Solar is the "largest single debt financing transaction" issued by the DFC, the agency announced this week. The DFC said the investment in the India project will "promote DFC's commitment to diversifying supply chains," following demands from lawmakers that the agency avoid funding any solar projects connected to forced labor in China.
Ethics watchdogs said the loan raises questions about whether First Solar's political connections played a role in the DFC's decision. The federal financing agency, which was formerly known as the Overseas Private Investment Corporation, has faced criticism in the past for funding projects linked to political donors. The loan also comes nine years after the Obama administration came under fire for approving $3 billion in loan guarantees to the same company—funding that Republican lawmakers alleged the company wasn't qualified to receive.
"The United States International Development Finance Corporation, formerly known as OPIC, has a history of deals gone bad when mixing taxpayer dollars with politically connected entities like First Solar," said Tom Anderson, director of the Government Integrity Project at the National Legal and Policy Center. "This agency has a history of favoring entities backed by huge political contributors, like First Solar, by giving them less scrutiny while prioritizing politically connected projects above entities and individuals who are not politically active."
A DFC spokesperson, asking to speak on background, said the deal was carefully assessed and unrelated to politics but declined to say if the White House had any input in the decision.
"This deal is a milestone in the U.S. effort to drive alternative supply chains that do not utilize forced labor, and absolutely nothing to do with politics," the spokesperson told the Washington Free Beacon. "DFC-supported projects undergo a rigorous due diligence process and are assessed based on their creditworthiness, development outcomes, and foreign policy impact. The agency is governed by a public-private board of directors with bipartisan membership."
In 2010, OPIC expedited a $10 million loan to a Hillary Clinton donor while Clinton was serving as secretary of state. The donor was supposed to use the loan to fund a Haiti housing relief project, but instead pocketed the money. He was sentenced to 12 years in prison for the scam.
First Solar came under scrutiny in 2012, when the GOP-led House Oversight Committee investigated a series of Department of Energy loans issued to solar companies by the Obama administration. The investigation was prompted by a scandal involving another politically connected solar energy company, Solyndra, which had declared bankruptcy and defaulted on a $500 million federal loan.
A House investigation turned up internal DOE emails that indicated First Solar's technology was not considered "innovative" by the loan program's technical director, which was a requirement for receiving the financing.
"The information currently accessible to the public raises the question of whether these companies received approval to use federal lands and taxpayer monies based not on the best value for the American people but the political clout of the recipients," then-senator Jeff Sessions (R., Ala.), ranking member of the Senate Budget Committee, said at the time.
Although First Solar's chairman testified to Congress that the company was "financially strong," the business was forced to furlough half of its employees at its solar plant near Los Angeles weeks later.
Last year, First Solar paid $350 million to settle a shareholder lawsuit brought by two United Kingdom pension funds, which claimed the company inflated its stock price and misled investors about its finances.
Rep. Jason Smith: Build Back Better Act Will ‘Bankrupt the Economy’
Rep. Jason Smith (R-MO), the ranking member of the House Budget Committee, said in a statement on Friday that the $4.9 trillion Build Back Better Act will “bankrupt the economy” while Americans continue to suffer from soaring inflation.
The Congressional Budget Office (CBO) found that the Build Back Better Act would add $3 trillion to the deficit over ten years and the true cost of the bill would be $4.9 trillion, which is more than double the bill’s $1.75 trillion official price tag.
Smith contended that the bill would devastate the American economy while consumer prices rise at levels not seen since 1982. He said:
This analysis from the nonpartisan Congressional Budget Office confirms that Washington Democrats are misleading the public about the true cost and impact of their tax and spending agenda. For weeks, Democrats have ignored independent analyses that showed what CBO today has now confirmed – their reckless reconciliation bill will ultimately cost $4.9 trillion and add $3 trillion to the debt. In the past, Democrats heralded the CBO as the ‘gold standard.’ It is irresponsible and disrespectful to American taxpayers that Democrats remain in denial about the true impact of their agenda while at the same time they are doing nothing to tackle the highest spike in consumer prices since 1982, as confirmed by the Department of Labor this morning. In fact, their proposal will only make the recent spike in prices worse. Democrats are wasting precious time attempting to ram through an agenda that will bankrupt the economy, benefit the wealthy, and build the Washington bureaucracy.
The CBO found that the bill would cost far more than the bill’s projected cost if the nonpartisan were to assume that if many of the bill’s programs were made permanent. Democrats set arbitrary policy sunsets for many of the bill’s most expensive programs to make the bill appear less expensive.
Senate Budget Committee Ranking Member Lindsey Graham (R-SC) said in a statement Friday:
CBO has provided a true cost of the bill over ten years – assuming the programs never go away – which they will not. Their analysis is stunning. The true cost of the bill has more than doubled and the effect on the deficit is eightfold. This score should stop the effort to pass Build Back Better in its tracks because it will dramatically expand government and do great harm to energy production. We’re calling on the Democratic Party to shelve Build Back Better to give the American consumer and economy breathing room to recover.
He added, “I very much appreciate CBO scoring Build Back Better without budget gimmicks. We all know that the new provisions will not sunset – they never do.”
Sean Moran is a congressional reporter for Breitbart News. Follow him on Twitter @SeanMoran3.
No comments:
Post a Comment