Article Image
IPFS News Link • Federal Reserve

Fed Will Be Embarking On A Tightening Cycle Like No Other In Its History"

From Brian P. Sack, Executive Vice President. Recall that Brian is the de-facto head of the Fed's "markets group" operation located on the 9th Floor of Liberty 33. If there is indeed a Plunge Protection Team, Brian is likely the PM who runs it.

2 Comments in Response to

Comment by Anonymous
Entered on:

 It's pretty sad you need an econ degree to decipher.

If you just read the first 3 paragraphs all he is saying is the same ol' shi* another way.

I don't know how else to get people to understand this:

Keynsian economists on have 4 tools at their disposal.

1) taxes

2) spending

3) interest rates

4) money supply


What this guy is trying to do is bolster the purchase of sovereign debt.  To make people more confident about purchasing soveriegn debt.  To do this he is saying nothing more than: "Hey guys, remember TOOL #3 (see list above), we still got it and if shtf we'll use it."

In other words, if people stop buying our shi*, then we'll make it irresistable in terms of payback for buying our shi* by increasing the returns you get from buying our shi* if you do buy our shi*.

Naturally, this will tank the sovereign debt other nations issue unless they match suit.  Then, if all nations go to 10% on their debt or 20% on their debt, we're back into a massive recessionary/depression style equivalent of 1929/1930 shutdown of international trade via tariffs.

So, from a libertarian perspective, I wouldn't worry about it too much.  If you are already preparing for possible deflation and possible inflation, and you're reducing your debt or refinancing to lower interest rates now, you're fine.  Just understand all of the above so you know when to move if you have to.

The last thing, from a libertarian perspective, rather than getting all tied up in knots about the machinations of a basis point change, look at it more wholistically.

The IMF/Bretton Woods/Sovereign Debt/Keynsian socialistic system (i.e. fiat currency) we live under now is based on one thing.  Read the following carefully:


In other words sharecropping for the fedgov.

If you want to focus on something, focus on that.


Comment by Found Zero
Entered on:

OK I spent 20 minutes reading it and 45 minutes sitting here trying to figure out what it means for us.

So policy will be used to drive up interest rates, thus tightening credit access which one would think would be counter-inflationary (great) BUT the big banks DON'T have to mark to market anytime soon, but rather leak junk into the market slowly over time. Thus drawing down the reserves that don't actually exist slowly so they can still be used as reserves for a while. A good long while. HOWEVER this means that while the larger banks remain capitalized and solvent (which they in fact are not), basically, small business can GO GET SCREWED when it comes to obtaining credit. But don't worry, our level of "accommodation" insures we won't get screwed, after all, we determine "policy" and "policy" can be "expected" to determine market conditions.

Am I hearing an admission here? Is this not the Fed saying "forget the organic economy, we're the government now"?

They aren't saying monetary policy is going to tighten FOR THEM folks. They are saying they are going to tighten it ON US while they enjoy our bailouts and control market shell games to their own advantage forever anon.

Small businessmen, this is focussed right at you.

Free Talk Live