Print!!!! Fed Jamming Up Money Creation > Markets

For months we have been waiting to see how the suspected all-time-high in markets will work out for the final third of August.  Now, things are slowly resolving into focus.

The stock market continues to fight something of a losing battle on an aggregated basis (which as you know is all we really care about) and was turned back at the 9-day moving average Thursday.

But the REAL news Thursday was the weekly Federal Reserve H.6 Money Stocks report

(Continues below)

 

So how big is this story?  REALLY DAMN BIG.

Well, it sure as hell is bigger than the Trump witch hunt, the democrats and their government in exile, and the nonsense about Uber’s future.  These are footnotes of history especially for the man reprising Hoover’s run from Inauguration (March 4, 1929) to crash.

I would put the Fed story right up with the coming (decades-long) rollover of humans out of the “work force” as robots are coming for virtually all of those jobs.  Eventually, you will be replaced by an expert system…but I digress.

There are two “windows” that the Fed publishes weekly in the H.6 report.

The first one is more historical in nature.  This report says “TO May.”  But in the slippery (yet refreshingly precise) lingo of the Money Masters, what this means is “Here’s how fast we were really printing money…” 

You may need a nitro pill as you look at the Table 1 summary because is screams that the ONLY reason there is even a stock market today is that the Fed was goosing money supplies at a 16% annualized rate TO MAY – the February, March, April timeframe:

Over the past 20 years, we have held to the view that when we got to this part of the Economic Long Wave (those 48-90 year cycles in economic matters) we would see the Fed trying to drive by simultaneously jamming their foot on the (money creation) gas while at the same time stomping on the (rate increasing) brakes.  Under modern monetary theory, MMT, what could go wrong?

Except, of course, when you do this with your car, you are either going to b low out the transmission or smoke the brakes at some point…but it might take a while.

So now onto the second part of the Fed slider…

Wow, huh?

This demonstrated the Fed still has an 11.7% annualized “print rate.”

In a perfect (remember the word “transparent” lol?) world, the Fed would just come out and say:  “We are going to print like hell, try to avoid sliding into negative rates and get consumers spending again… and then, after a bunch of stimulus, we will switch over into selling off the MBS trash we have on the books and this way will have room on the balance sheet to intervene again when the market tanks this fall.”

But, of course, they can’t say that because that would out the Fed as a private bankster cabal that stole the Congressional duty to control the creation of “money” in this country and they manipulate it for the very rich who understand their gig.

Most people don’t.  Even professionals are stymied.

People at the C-level of investment companies write to us questioning the Fed Statement gibberish this week.  (“Whatthehelldoesthatmean?)  No, not kidding – here’s an example:

“If the Fed raises rates it’s hawkish

If the Fed leaves rates unchanged it is presently neutral

If the Fed lowers rates it’s dovish

You can’t raise rates and make a dovish statement, nor can you lower rates and make a hawkish statement – it is just talk

The Fed has talked about normalizing the balance sheet – unless and until they do – it doesn’t mean chit. They will not sell securities………. It’s a fairy tale

OF COURSE they can’t sell the MBS crap.  If they do, it would compete with bonds (much of which includes their own government’s bonds) and that just would never do.

But no worries…yet.  As long as the Fed window shows the 3-month rates are running ahead of the 12-month rates, life here in Financial Wonderland will be “steady as she goes…”   Up.

It’s like of like the old joke about the man jumping off the (1,454-foot high) Sears  Tower with a cell phone.

On the way down he was being interviewed by one of the Chicago all-news stations.

I’m just passing the 20th floor now and everything is going fine…”

So that dear reader, is where we are this morning.  Down to the 7th…no make that sixth floor.  And everything is STILL going fine.

Until the second half of August.

(Let me pause to huff some china board marker….there, better now…)

Economics is very similar to the study of free-fall.  We have been in a long-term cyclical bond market decline since 1981/1982.  Apparently, you didn’t get the memo.  Or, if you did, you didn’t pay attention to the fine pint.

Understand this:

It’s not the rate declines that kill economies.  But, like our hypothetical Sears Tower jumper, it’s the sudden stops that kill.

We are witnessing the oddest damn phenomena ever:  Tap-dancing on policy while trying to tap both the gas pedal and the brakes.

You can work out the odds of “performance success” from here, without too much coaching, I trust?

Which is why war on the Korean Peninsula looms as a bait-an d-switch along with “domestic terrorism” this fall…

We now return you to the usual crap for the NTP (non-thinking public).

Housing Starts – Miss You a Million

Pictorially, first:

Now the press release:

Building Permits Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,168,000. This is 4.9 percent (±0.9 percent) below the revised April rate of 1,228,000 and is 0.8 percent (±1.1 percent)* below the May 2016 rate of 1,178,000. Single-family authorizations in May were at a rate of 779,000; this is 1.9 percent (±1.0 percent) below the revised April figure of 794,000. Authorizations of units in buildings with five units or more were at a rate of 358,000 in May.

Housing Starts Privately-owned housing starts in May were at a seasonally adjusted annual rate of 1,092,000. This is 5.5 percent (±11.9 percent)* below the revised April estimate of 1,156,000 and is 2.4 percent (±11.4 percent)* below the May 2016 rate of 1,119,000. Single-family housing starts in May were at a rate of 794,000; this is 3.9 percent (±10.4 percent)* below the revised April figure of 826,000. The May rate for units in buildings with five units or more was 284,000.

Housing Completions Privately-owned housing completions in May were at a seasonally adjusted annual rate of 1,164,000. This is 5.6 percent (±9.2 percent)* above the revised April estimate of 1,102,000 and is 14.6 percent (±10.9 percent) above the May 2016 rate of 1,016,000. Single-family housing completions in May were at a rate of 817,000; this is 4.9 percent (±11.6 percent)* above the revised April rate of 779,000. The May rate for units in buildings with five units or more was 335,000.

Yes, living/renting in those convenient in-city human coops is running tough competition to owning your own.

Dow and S&P flat, NASDAQ down 11…

And In Other Snews

Washington Post Takes Another Leak:  This as The Hill writes: “Trump’s backers are furious about a story that appeared Wednesday in the Washington Post, in which five anonymous sources alleged that the president is the target of an obstruction of justice investigation for allegedly trying to bury an FBI probe into his former national security adviser, Michael Flynn….”

Even one of the Justice Department types is warning on unnamed sources

But Mueller investigating Kushner’s business dealings, Washington Post reports…

But, as usual, the public is figuring out the left wing witch hunt with Trump approval up, not down.

Also on the dance card:

Google Said to Be Facing Record E.U. Fine.

Serbia to have first gay prime minister as Ana Brnabic is chosen.

Russia Claims Airstrike May Have Killed ISIS Leader Abu Bakr al-Baghdadi.

U.S. Accuses Chinese Company of Money Laundering for North Korea.

An d the New Hunt for ET May Be Coming

Ring, Ring: ‘Earth? It’s space calling, on the quantum line’

Comments

Print!!!! Fed Jamming Up Money Creation > Markets — 17 Comments

  1. If it is an “anonymous” source, then it is most likely a lie or at a minimum, a misrepresentation of facts.

    Do you protest your property tax assessment anonymously?

    Do you complain to your city council anonymously?

    The only reason for people to be anonymous in making these kind of statements is that they are not verified, not true or twisted. Otherwise, stand there in your pants/skirt and shoes and just tell the truth.

    It’s really hard for the truth to hurt you excessively, even in business. In politics, it seems telling the truth is something one gets penalized for, whereas lying and obfuscating are rewarded.

    In fact, in business, discovering people who are honest is more the exception than the rule. I hang on to people who shoot straight in the business world, because most of them are slinging BS, putting lipstick on pigs or trying to make a million dollars look like 50 million…

    If nobody in government will put their name next to a statement, then you can bet that statement is likely to make the Bovine Excrement Meter peg out.

    Two careers are available to accomplished liars – acting and politics. Lawyers don’t lie, mostly, they just drown the truth.

    Why is it that people so desperately want to trust liars??

    • I think you missed at least one reason. I think a big reason for anonymous leaks is because the leaker is ideologically opposed to the government in power, and they are trying to get data out that the government is trying to keep from getting out (due to it not supporting their position). This happens regardless if left or right is in power.
      They don’t step forward because it could mean a loss of their job or prosecution.

    • Several decades ago, I worked in customer service at a car insurance company, where everyone had an ‘official’ anonymous name – so that anyone could work on any account,at any time.

      Fast forward twenty years – and I was working in security as an operator, but now as a ‘number’ – until I basically said, ‘Enough’, and would give out my first name so that I could be a person to whomever was calling in – sometimes frightened . . . I had a co-worker who asked if I wasn’t worried that I could get ‘harassed’? I said, No!

      People are anonymous because they are frightened, whether for their jobs, or for their safety . . .

  2. George, do you suppose the money printing is meant to gin up global liquidity in the wake of the recent Spanish Banco Popular failure? I keep thinking of the dominoes that are lined up, just ready for the right trigger event to set them off.

  3. George, Kindest regards and thanks for this informative alert; in descending money sequence Jim Rogers, you and me have looked at the history, data and probable outcomes and reached the same conclusion albeit for different reasons.

    My reason is two fold: if you project a straight line long enough and far enough the outcomes of an event will never vary i.e. fiat money printing AND
    more significantly,if all fiscal events are viewed within the parameters of political desires,the libertard desires to oust Pres. Trump and his “outsider” plans must be defeated ( ahem ); therefore, causing a fiscal correction of major proportions fits within the overriding political desires of the insiders and CFR/ one world groups/ progressive/ socialist order idiots who can
    never show us one place where their idealistic dreams are working.
    Churchill was right in his comments about those who refuse to learn from history.

    • Like I wrote, ‘I won’t waste my time trying to convince someone that water is wet.’

      What I would caution against though is that ignoring information because it conflicts with one’s opinion is not a good survival mechanism.

      • Oh Wavecrave, if only you had introduced another left-bashing Pizzagate-type story, the contortions to “connect the dots” (as this crowd always preaches) would boggle the mind.

  4. You saw that Bezos bought Whole Foods?
    “Alexa, buy me Whole Foods”
    “Jeff, you just bought Whole Foods for $13 and a half Billion.”

  5. I think whitewater was more of a witch hunt than what republicans now whine about. Whitewater pales, pales, pales in comparison to the allegations made about Russian meddling and Trump. It started as an investigation into a land deal and republicans morphed it into something else. Ditto for Benghazi. It started as one thing, republicans morphed it into something else and kept it alive through an election cycle.

    Re: Clintons/Lynch. Fake news?
    The Russian document cited a supposed email describing how then-Attorney General Loretta E. Lynch had privately assured someone in the Clinton campaign that the email investigation would not push too deeply into the matter. But according to the FBI’s own assessment, the document was bad intelligence — and according to people familiar with its contents, possibly even a fake sent to confuse the bureau.
    https://www.washingtonpost.com/world/national-security/how-a-dubious-russian-document-influenced-the-fbis-handling-of-the-clinton-probe/2017/05/24/f375c07c-3a95-11e7-9e48-c4f199710b69_story.html?utm_term=.95108e56404a

    • Since you are so tuned in to these “Allegations” can you actually cite a SOURCE?
      You see, once again, this is unattributable rumor and innuendo – and much coming from embeds like the clown posse that ran domestic surveillance for Ohbummer.
      So please, share with us who – specifically WHAT PERSON leaked stuff which may not be true to we can find out who to send to Leavenworth?

      • George – if by now someone can’t accept that Russia tried to influence the 2016 US elections I’m not going to waste my time trying to convince that person that water is wet or the sky is blue.

        Yesterday the senate in an almost unanimous vote (98-2) voted to impose new sanctions against Russia and limited Trump’s ability to repeal the sanctions. When the senate votes en bloc like this you can be certain that there is hard evidence of Russian meddling. For some reason they haven’t briefed me on it so I’m not privy.

        Very few people refuse to accept what Russia did – Trump, you and some others. Why is that?

      • In othjer words you can’t cite original source, roflol…my god man, more Kool-Aid for this gent

        get him of Rachel’s show

      • Maybe the new sanctions on Russia are designed to shut off their Natural Gas sales to Europe and allow Qatar, and the western producers that run the Compressed Natural Gas concession there to take over sales to Europe?

        I think that reports of Trump losing the popular vote by 2.3 million is clear evidence the election was tampered with. Just not by the Russians. This looks like the same thing the DNC did to Bernie. Why isn’t the DNC being investigated?

        Pretty sure WaveCrave missed the news that Mueller has had to move on to looking for Obstruction of Justice because there is no evidence of Russian Hacking.

    • BS, wavecrave, there is NO PROOF that Russia interfered in our elections! The reason the senate voted for more sanctions against Russia, is because the elite (EU/Globalists/NATO et al ad infinitum) are trying to take down Russia. Sanctions are already in place and have hurt the Russian economy, surely YOU know this! Their vote is NO indication of hard evidence against Russia, what UTTER BS! Haven’t you been reading along on this blog for the last few years? Amazing, unbelievable, the level of ignorance of who owns our elected leaders and how they take OUR country into war after war after war! Didn’t you see the full meghan kelly interviews with Putin? Can you ignore that? I guess you can! These sanctions have hurt many in the UK/Europe due to restrictions on exports to Russia. This is a preliminary to war! Sanctions ALWAYS lead to war! We should be pushing back from this! This country acts like it is in KINDERGARTEN!!!!

      • Wave may not have read WikiLeaks Vault 7, either. It conclusively with code snippets explains how with the right *foreign language comments) in cod

          e you can make a hack from oh, the UAS look like something from Russia, china, or you have your pick…
          Just saying evidence in terms of the Russian hack is only as good as the ip traceroute back to source and anyone who doesn’t understand what is involved there needs to stfu and let the grown ups deal with reality