Zero Hedge: One week ago, when we discussed that as a result of the accelerated rebuild of cash by the US Treasury, first Bank of America, then JPMorgan suggested that the Fed may be forced to restart QE soon as a result of the upcoming sharp drop in liquidity, we said that “apparently this is something that the Fed, which until recently was engaging in additional liquidity draining via QT, was unaware about, and since a return of QE – something that Trump has yet to demand – would cause all sorts of political problems and demand lengthy congressional explanations.”
Fast forward to today, when what we expected would happen, happened as Trump made his first official demand for “some quantitative easing” (even if Congress may choose to eventually stay out of this as both political parties are now desperate for the Fed to resume monetizing the US deficit on the road to helicopter money, i.e. MMT).
To wit, despite the “strongest economy in the world,” it appears President Trump is not satisfied.
“Our Economy is very strong, despite the horrendous lack of vision by Jay Powell and the Fed, but the Democrats are trying to “will” the Economy to be bad for purposes of the 2020 Election. Very Selfish! Our dollar is so strong that it is sadly hurting other parts of the world…”
Opinion: He, Trump is correct, but wrong. The Democrats are definitely wishing for and hoping a recession will hit before the 2020 election. But more debt that QE causes is just plain wrong.
Definition QE: A central bank buys predetermined amounts of government bonds or other financial assets in order to inject liquidity directly into the economy.
Problem: When a government buys massive amounts of bonds from banks with newly created dollars (QE), interest rates are driven down but the debt that the printed money creates may never get paid back as evidenced by the last 3 rounds of QE, $4 trillion in debt is still on the Fed’s books.
Debasing the dollar: New money reduces the value of money in circulation which is why counterfeiting is illegal.
QE causes higher asset prices: What do banks do with all that new money? Buy stocks and other assets driving a bigger and bigger gap between rich and poor and causing future generations to burden the debt.
All roads lead to prophecy. Matthew 24:38-39
“For as in the days before the flood, they were eating and drinking, marrying and giving in marriage…
How lovely. Bull markets provide the rich with all the oil and wine (Rev. 13:17) they could possible want,
… until the day that Noah entered the ark, and did not know until the flood came and took them all away, so also will the coming of the Son of Man be.
Somebody Call Somebody!