'Thank you for your attention to this matter.'
The Fed almost always favors more credit at lower interest rates, resulting in more debt. The need to service the debt subtracts from the amount of money available for other things.
Wednesday, September 18th, 2024
Bill Bonner, writing today from Dublin, Ireland
The big news — the rate cut expected from the Fed — will come to light in a few hours.
But what a circus. Here’s the Financial Times:
Wall Street has raised its wager on the Federal Reserve making an aggressive half-point cut to US interest rates when it meets this week, with traders now putting the odds of a jumbo cut at about 64 per cent. Since late last week, investors in the futures market have steadily ramped up expectations of a bigger cut from central bank officials at this week’s meeting concluding on Wednesday — rather than the more traditional 0.25 percentage point change. The increased expectations come in the wake of US economic data that has shown the labour market slowing and inflation cooling. The Financial Times and The Wall Street Journal reported last week that the Fed was facing a close call on whether to cut rates by a quarter point or half point.
All up and down the internet, people are making predictions... making bets... and making fools of themselves over the Fed’s next move.
Anticipating more ‘money printing,’ both gold and bitcoin are on the rise, MarketWatch:
The largest cryptocurrency was up more than 5% on Tuesday to around $60,945, the highest level since Aug. 27, according to Dow Jones Market Data. Bitcoin is up 45% year-to-date, while it is still 17.6% lower than its record high of $73,798 reached in March.
And here’s Elizabeth Warren asking the Fed not for just a 25 basis point cut... nor even a 50 point cut... but a whopping three-quarter of a percent cut.
Her letter to Powell warns:
If the Fed is too cautious in cutting rates, it would needlessly risk our economy heading towards a recession. A number of economists have warned of this risk since July. Former president of the Federal Reserve Bank of New York, Bill Dudley, wrote, “dawdling now unnecessarily increases the risk.” The Committee must consider implementing rate cuts more aggressively upfront to mitigate potential risks to the labor market.
Thank you for your attention to this matter.
Poor thing... she sounds like an economist! But a real economist would know better.
It is absurd for the Fed’s Federal Open Market Committee to think it knows exactly what interest rate millions of savers, borrowers, spenders and manufacturers need.
It is even more absurd for Ms. Warren to butt in. Should the key rate be higher... or lower? How would she know? And if she knows how much credit should cost. How about eggs? How about houses?
Of course, she doesn’t know. And neither does anyone else. Prices are information. And the information is only useful if it comes to you untainted... unbent... and un-suborned. You can’t force it. You just have to listen... and discover it, from the voluntary bid and ask in the debt markets. The market tells us how much credit is available... and how much demand there is for it. No group of arrogant economists... nor grandstanding politicians…can possibly know better.
As we have seen, the Fed almost always favors more credit at lower interest rates, resulting in more debt. The need to service the debt subtracts from the amount of money available for other things. Then, the feds then are forced to cut back... or ‘print’ more money.
The real problem in America, as we suggested yesterday, is that there is too much [fake] money... lent at [fake] rates that are almost always too low. People borrow money to buy things they don’t really need and can’t really afford. Companies borrow money to buy back their own shares... figuring, correctly, that they will get more in dividends from their own earnings than they will pay in interest. The US government borrows too — nearly $2 trillion per year. Yes, they’re adding to the nation’s debt at an alarming rate; but maybe that will be someone else’s problem?
The deluge of money pollutes the wells... swamps the fields... and soaks carpets throughout the country. Bright, ambitious young people go to Wall Street, rather than into useful careers... because that’s where the money is. Mega-rich donors aim for control of the nation’s politics — because it is politics that controls the flow of money. Manufacturing gets shipped overseas, simply because when you are loaded up with EZ, printing press money — it is easier to buy things from the foreigners than make them ourselves.
And now... today... the Fed will add more ‘liquidity’ to a saturated, rotting system.
Regards,
Bill Bonner
Research Note, by Dan Denning
With financial market near all-time highs, valuations off the charts, and inflation above target, the Federal Reserve looks set to cut interest rates later today. One effect: lower borrowing costs for a US government already over $35 trillion in debt. The chart below from The Daily Shot shows the correlation between US public debt and the inflation-adjusted gold price. Conclusion: the higher the debt goes, the higher the gold price goes. But as our natural resources expert Rick Rule reveals later today in our upcoming Private Briefing for paying subscribers, higher gold prices may not be entirely what they seem. Stay tuned for more later today (and thanks for the questions you submitted via email and through the comments yesterday).
All smoke and mirrors Bill. All meaningless BS to keep the herd in line for slaughter. America is a declining country that has been purposely divided for decades just for this moment in history to break her apart. We have half of the country that work everyday, and are semi responsible people who just try to do their part for the benefit of themselves, family and community. We have another half who suck off government, and even multiply without being married just for a few extra fake dollars monthly. Totally irresponsible and only care about themselves and nothing/nobody else. With 20+million illegals amongst us now, the scales have been purposely weighted with the useful idiots and now America will pay its price for allowing it. Still have time to prepare, and this fact is what we should all be working towards. Like the poor Jews who stayed in Germany during the rise of Hitler, who didn’t want to leave their wealth and businesses could tell you, all the gold in the world couldn’t help them….
"And now... today... the Fed will add more ‘liquidity’ to a saturated, rotting system. "
Hiya Bill -
Your line so reminded me of an unavoidable fact in the Horticulture world. While water is essential, too much on ANY growing plant (tree, palm, shrub, grass) results in chlorotic foliage, rotting roots and a Fungal invasion. That's a bit like where we are now - the people are yellowing (cowards) and curling up, the "roots" (shared Culture) of what makes us the Greatest Country in the world are inarguably rotting and we have an invasion of a Fungus that has no idea what it means to be an American and seem to not care (based on their misplaced Faith in the dim party and ready acceptance of all the goodies our "government" showers them with before their feet are even dry.)
Most times cutting the water WAY back, removing mulch and turning over the soil around/above the root ball to speed drying, and the application of a Broad-spectrum Fungicide are enough to save a plant - different species and environmental conditions directly affect the results.
Sadly, it is usually too late to save the plant if the condition is not recognized and treated early in the process, particularly in regard to the Fungus...