Powell Admits “Low Rates Are Not A Choice Any More”, Says QE Will Be Used In Next Downturn


Zero Hedge: Instead of Powell bloviating before Congress for hours every six or so months while discussing his social life and avoiding answers to questions that really matter, it would be a much better use of everyone’s time if C-SPAN and Congress just showed two charts which explain everything one needs to know about what really matters to the Federal Reserve, and why it can never again allow price discovery to take place.

The first chart (above) is the following: it shows that private US financial assets (i.e., the stock market) is now 5.6 times US GDP and any sizable drop in the stock market would lead to an almost instantaneous depression.

The second chart is the latest CBO long-term debt forecast: while it needs no explanation, SocGen’s Albert Edwards did “explain it” calling it a “ticking timebomb“, because as the notional amount of debt set to explode in coming years, any sharp increase in the interest rate will lead to an almost instant financial crisis and potentially the loss of the dollar’s reserve currency state.

Alas, none of this was discussed, although when testifying before the Senate today, Powell did come close to admitting the dire conclusion these two charts suggest when he unexpected admitted that “low rates are not really a choice any more”.

Opinion: Bingo. If you want proof that the US economy is in peril watch this 50 second interview as Rashida Tlaib from the House Finance Committee tries to sound like she knows something about the economy when questioning the current Fed Chairman Powell, and doesn’t seem to know who former Fed Chairman Bernanke is.

So now the cat is out of the bag. The Federal Reserve and every other central bank on the planet is set to create new money to pump into any economic weakness. It does not take a financial wizard to know that paying off a bunch of credit cards with new credit cards will lead to big financial trouble.

What began in 2009 as a means to make the first black president a hero, will one day be the nation’s undoing. Quantitative easing, printing money to buy bonds to force interest rates down, has now become the economic policy of the global economy.

The proof came in the 4th quarter of 2018 when Powell announced that the Fed would raise interest rates 3-4 times in order to pay off the 4 trillion of debt created from the last three rounds of money printing. The global market cratered until Powell capitulated and lowered interest rates.

The Fed is now powerless and that is why when the dam breaks it will take every nation with as perfectly prophesied in Revelation 6:5-6.

Thanks to Vason for sending in the article