“The Fed Is Courting Disaster by Leaving Interest Rates Too Low“

Nichole Gelinas is a senior fellow at the Manhattan Institute. She writes on urban economics and finance. She is an author of After the Fall: Saving Capitalism from Wall Street—and Washington.

Miss Gelinas tells us what she believes in a quotable story in the N.Y. Post on July 29.  She seems to have sneaked out a bit of truth between the lines that big city paper’s usually censors. These are untruths we get every day from the White House and the Federal Reserve System (FED).

Her method is a few well-placed quotation marks that let us know what needs to be exposed!  We add our interpretation.

She writes: “Yet the Fed has created a trap for itself. If it doesn’t keep the debt coming, it will ruin the illusion. It’s also under outside strain.”

Here Miss Gelinas tells us the truth; the FED is committed to ever-increasing dollar debt. Our President’s lies covers for it. For the White House to say, “the FED doesn’t have a clue” is a pretense that the FED’s crimes are those of dumb innocent. The President is covering for its deliberate acts, while pretending to oppose them.  A big lie quote from White House, without a grain of truth is: “Our Federal Reserve doesn’t have a clue!”

Our nation’s best-kept secret may be that our elected Congress and President have little or no control over the Federal Reserve Bank! Both the Trumpeter and the FED know it can buy and pay for the President before the sun comes up!

The truth rarely exposed is that the FED has near-perfect control over both press and President. I think Miss Gelinas knows it and wants us to suspect it. She goes on to expose the FED and Trump lies with more clever little quote marks. She writes: ‘The Post agrees, noting that the Fed “should demonstrate its independence” by doing what Trump wants, “because the economy needs the help.”‘ Gelinas asks, “What is the economy going to need when the recession comes? Rates of negative-10?”

Gelinas suggests (between the quote marks) that the FED uses what the President blurts.  It inflate us and pretends its Trump’s idea. Her suggestion of sub-zero interest rates, coupled with a deep and hungry recession are a real threat! The truth is the FED knows what it is doing. It has plans that the President shields from us, we don’t catch on to the FED because the President proudly asserts he is running the money machine!

Gelinas is a rare news writer who understands this and is telling us the truth, the combined action of a big spending, war-making President, coupled with forced, low-interest rates, leave us with no way out of financial disaster. Galinas seems to suggest we not believe what either source tells us.

Our President tells us the FED does not know its business, and that he is smarter than they. And he has publicly demanded inflated dollars. Last week he has gone so far as to say he wants the FED to “Cheapen the Dollar,” which means destroy it a little at a time. In practice, this means flooding the market with printed dollars, lots of printed Treasury Bonds, Bills, and Notes, all of which the FED will gleefully issue. Never mind inflation of most things we need to live on! President Trump wants us to believe the FED must keep creating dollars to pump up economic allies!

Miss Gelinas discloses irony in quote marks that bear repeating; She quotes Trump, The Fed should “demonstrate its independence” by doing what Trump wants, “because the economy needs the help.

The money issue is a vast lie supported both by a willing President, who thinks only of himself, and the world power, the FED. In fact, the FED thinks far beyond all of us, and has a plan for our lives that we certainly would not like! I conclude Gelinas knows it, and I thank her.

She tells it straight, she states: “This week, the Federal Reserve likely will vote to cut interest rates — when it should be raising them. If the economy is so dependent on low interest rates that a near-record-low rate of 2.4 percent isn’t low enough, there is something wrong with the economy, and piling on more cheap debt will make the crash that much harder,” and “Since the financial crisis of more than a decade ago, America and the world have gotten dangerously addicted to debt. The Fed has fed the addiction.”

She concludes: “The Fed (roughly speaking) sets the interest rate at which banks can borrow. The lower the rate, the lower the rate at which banks will lend to homeowners, credit-card borrowers, car buyers, and the like…In 2008, as the financial system was failing, the Fed pushed its key interest rate down to zero and kept it there for seven years. The point was to get people spending again. Since they had little discretionary income, they couldn’t spend more unless they could borrow more.”

“The more significant problem created is that cheap debt got the economy into trouble in the first place. By 2008, after a decade during which interest rates were also low, people had already borrowed so much that they couldn’t borrow any more. Household debt had nearly doubled between 2000 and 2007, to $14.2 trillion from $7.2 trillion. Choking on mortgage debt, in particular, Americans cut off their spending.”

“The United States has sacrificed one of the tenets of free markets: ­rational valuation of assets. When people and companies can borrow an unlimited amount of money to buy stuff — houses, stocks, bonds, other companies…”  Gelinas’ full story in the Manhattan institute

Editor CEC returns: What should we individually do to protect ourselves? Why not get rid of both the FED and start over like it was 1776 all over again? I hope you are ready for it, I am!