Here’s a joke without a punchline from the Stansberry Morning Market Preview:
‘Democrats called on President Joe Biden to replace former President Donald Trump’s Federal Reserve picks when their terms expire later this year, potentially reshaping the central bank.’
The only plausible reason for replacing the Trump picks with Biden picks would be to make the Federal Reserve more responsive to the Democratic agenda — that is, even more ready to print money to cover the cost of programs we can’t afford.
Someone should tell them…they’re wasting their time. Trump’s picks are some of the biggest get-along, go-along nincompoops to ever join the central bank. Trying to find even bigger dumb heads will be a challenge as unfruitful as a vasectomy.
Jerome Powell is Trump’s man. So is Randal Quarles. And Richard Clarida. And Christopher Waller. And Miki Bowman. Except for Lael Brainard, who was appointed by Barack Obama, they are all Trump’s choices. And they run the Fed.
How could you possibly ‘reshape’ the Fed into a more servile…fully lobotomised…mouth-breathing…knuckle-dragging…confederacy of dunces? It’s hard to imagine.
They’re already printing money on a scale never before seen in the US. They are adding US$120 billion per month — more money every six months than was added in the whole period from the beginning of the dollar in 1792…to the year 2000.
And in the last few weeks, almost all of them have gone on record, reciting their unadulterated faith in stimmy spending to raise inflation…and boost the economy.
Yes, Dear Reader, the US is already on the Zombie Highway…tripping lightly over good intentions and stomping down hard on the bad ones…with no exit ramp.
But that last dot is one most dear readers don’t want to connect.
They imagine that there must be some way to change course…some trick that will ‘save’ us…some president — maybe Donald J Trump himself — who could appoint a new slate of Fed governors and put the brakes on…
Readers often accuse us of dereliction…or defeatism. ‘All you do is complain,’ writes the typical kvetcher. ‘How about offering a solution?’
But the remedy is so blindingly obvious, there is surely no need to mention it: Stop printing fake money…allow interest rates to go where they want…and balance the federal budget. There’s no mystery to it.
In seconds, interest rates would shoot up…the stock and bond markets would collapse…the economy would go into a deep depression…
…the president and most of Congress would be impeached or recalled…
…goofy, wealth-destroying bailouts, boondoggles, and giveaways would have to be abandoned (there would be no further talk of a Green New Deal…or reparations…or another round of stimmy cheques)…
…and millions of businesses and households would go broke.
We’ve had the gain, you might say, here’s the pain!
And while this sharp correction would set the stage for a long period of real prosperity, there is no chance — none — that the deciders would permit it.
Alas, we live in the big, wide world. We only control a tiny little part of it. And in the big, wide world, stuff happens. Not always good stuff.
And it happens regardless of what we want…or even what we think — following patterns scrawled in blood and bile, not carefully drafted by the brain.
What Roman wished for the destruction of the empire? What Irishman wanted to see his island invaded by Vikings…then Normans…then Cromwell…his crops burned…his family starved…his language, religion, and culture demonised or demoted?
What American in the 1920s wanted a 10-year depression that would only end in a catastrophic world war? Who even wanted 10% inflation in the US in the 1970s?
Yesterday, we saw the Zombie Index — a measure of the percentage of Americans contributing a big, fat zero to the economy — at 52%. Slightly more than half the country now shuffles from one handout to the next.
But you don’t need a majority to get to Zombie Hell. No vote is necessary.
Monetary and fiscal policies are decided, of course, by the deciders. They are the elite, who actually control government. The Zombie Index merely tells us how far up the leg the gangrene has gone.
Every one of the zombie programs now in action…or under consideration…is an opportunity for the deciders to gain power, status, and wealth.
Money is printed by the Fed (there’s no other way to support these programs) and then distributed as the deciders see fit.
Cut off the money, and you also cut off the deciders’ source of power and loot.
Normally, this perverse system is held in check by money itself. There’s only so much of it…and people are reluctant to hand over their own good money to be squandered on the feds’ bad programs.
That’s why fake money is the linchpin of the whole corrupt system.
It allows the deciders to shift more and more money to themselves…without appearing to take it from anyone else — neither in taxes nor even by borrowing it (which would drive interest rates up and create an unfortunate feedback loop).
The only restraint…as the Modern Monetary Theorists tell us…is inflation.
Eventually, prices rise. And when they do, the theorists tell us that the government will raise taxes to remove money from the system, squelch inflation, and keep things running on an even keel, all the way to paradise.
Never gonna happen
But that ain’t gonna happen.
This month, we got a brief glimpse of the future…
When the latest figures showed inflation rising at the fastest pace in 40 years, the deciders did not decide to raise taxes or interest rates…nor to withdraw their trillion-dollar programs…cut back on spending…or stop printing money.
Instead, Trump’s Fed governors gave us all the reasons why this inflation is ‘transitory’…and why we shouldn’t worry about it.
This is the only subject on which both Democrats and Republicans are steadfastly united. They are all the ‘deciders’ — all members of the elite.
And while they may jostle each other, trying to get their snouts in the trough, none has any intention of cutting off the slop.
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