The Federal Reserve Is Increasing The Pace Of Interest Rate Hikes Just In Time For The 2018 Mid-Term Elections - Michael Snyder THE ECONOMIC COLLAPSE BLOG

The Federal Reserve Is Increasing The Pace Of Interest Rate Hikes Just In Time For The 2018 Mid-Term Elections

Posted: 13 Jun 2018 Michael Snyder  THE ECONOMIC COLLAPSE BLOG

If the Federal Reserve really wanted to hurt the U.S. economy, the quickest way that it could do that would be by aggressively raising interest rates.  Lower interest rates make it less expensive to borrow money, and therefore economic activity tends to expand in a low interest rate environment.  Alternatively, higher interest rates make it more expensive to borrow money, and economic activity tends to slow down in a high interest rate environment. 

Since 1913, the Federal Reserve has engaged in 18 previous rate hiking cycles, and every single one of them resulted in a huge stock market decline and/or a recession.  It will be the same this time around as well, and the “experts” at the Federal Reserve know exactly what they are doing.  Interest rates are being aggressively jacked up just in time for the 2018 mid-term elections, and that is very bad news for the Republican Party and the Trump administration.

On Wednesday, the Federal Reserve announced an interest rate hike for the 2nd time this year…

The Federal Reserve increased a key interest rate again Wednesday, which will trigger higher rates on credit cards, home equity lines and other kinds of borrowing.
Wednesday’s action, which was widely expected, was the second Fed rate hike this year — and the seventh since it began boosting them in 2015. The latest increase puts the federal funds rate in a range between 1.75 and 2 percent. The Fed previously nudged rates up in March.

Because so much is based on what the Federal Reserve does, now interest rates will be going up throughout our economy.

For example, we should expect the average rate on a 30-year fixed mortgage to surpass the 4.66 percent mark that we witnessed earlier this year…

Mortgage rates have been climbing. The average rate on a 30-year fixed rate mortgage climbed to 4.66% this year in May, the highest in seven years, before falling slightly in recent weeks.
Home mortgage rates tend to move with the bond market, but rates can also rise because of a higher federal funds rate. A higher rate makes it more expensive for banks to borrow money, which can translate into higher borrowing rates for consumers.

Needless to say, this is going to have a huge impact on the housing market.

Interest rates will also be going up on credit cards, auto loans and just about every other kind of debt that you can imagine.

This will inevitably slow down economic activity, and it will make the party that is in power in Washington (the Republicans) look bad.

Originally, it was anticipated that the Federal Reserve would raise rates only three times in 2018, but now they are indicating that rates will be raised a total of four times this year.  The following comes from NPR…

The Fed also signaled that it will raise rates more this year than previously expected — four times rather than three.

This is economic sabotage, but nobody in the mainstream media will ever admit this.

Most people do not understand that the Federal Reserve has far more power over the performance of the U.S. economy than anyone else does.  It was the Fed’s ultra-low interest rates and easy money policies that fueled the relative economic improvement that we have witnessed early in Trump’s presidency, and it will be the Fed’s policy of aggressively raising rates that will inevitably cause huge economic turmoil in the coming months.

So why would the Federal Reserve do this?

According to Federal Reserve Chair Jerome Powell, the Fed decided to raise interest rates to keep the economy from overheating…

The decision reflected an economy that’s getting even stronger. Unemployment is 3.8%, the lowest since 2000, and inflation is creeping higher. The Fed is raising rates gradually to keep the economy from overheating.
“The main takeaway is that the economy is doing very well,” Fed Chairman Jerome Powell said at a news conference. “Most people who want to find jobs are finding them, and unemployment and inflation are low.”

Of course that is a load of nonsense.

As I discussed yesterday, if honest numbers were being used our unemployment rate would be at 21.5 percent, inflation would be at about 10 percent, and GDP growth would be negative.

The U.S. economy is definitely not “overheating”.  In fact, it needs as much help as possible to pull out of the deep slump that it has been in for many, many years.

Fed Chair Jerome Powell is supposed to be a Republican, and I suppose that it is possible that he actually believes that he is doing the right thing for the country by aggressively raising interest rates.

But any sort of an economic slowdown will be extremely favorable for the Democrats.

American voters are notorious for “voting their pocketbooks”, and when things get bad they always blame whoever is in power at the time.

In this case, it will be Donald Trump and the Republicans in Congress that get the blame for what the Federal Reserve has done.

We know that some among the elite are already discussing the possibility of “a crashing economy” as a way to “get rid of Trump”.  In the short-term, however, the best way to neuter Trump politically would be to have Democrats do extremely well in the 2018 mid-term elections.

If the Democrats take back control of either the House or the Senate in November, Trump’s agenda will come to a crashing halt, and thanks to the Federal Reserve that scenario has just become much more likely.

Michael Snyder is a nationally syndicated writer, media personality and political activist. He is the author of four books including The Beginning Of The End and Living A Life That Really Matters.

Federal Reserve: More Than 4 Out Of 10 Americans Do Not Even Have Enough Money To Cover An Unexpected $400 Expense - Michael Snyder THE ECONOMIC COLLAPSE BLOG

Federal Reserve: More Than 4 Out Of 10 Americans Do Not Even Have Enough Money To Cover An Unexpected $400 Expense

Posted: 22 May 2018 Michael Snyder  THE ECONOMIC COLLAPSE BLOG

The U.S. economy is not doing nearly as well as the mainstream media would have you believe.  A few days ago I wrote about a new study that discovered that nearly 51 million U.S. households “can’t afford basics like rent and food”, and just yesterday I discussed the fact that we are on pace for the worst year for retail store closings ever.  Now we have just gotten new numbers from the Federal Reserve which are absolutely staggering.  According to the Fed’s latest study, more than 4 out of every 10 Americans do not even have enough money to cover an unexpected $400 expense without borrowing the funds or selling something.  In essence, nearly half the country has no significant financial cushion whatsoever.  So what are all of those people going to do when the next economic crisis hits?

Sadly, living on the edge has become a daily reality for tens of millions of Americans.  The following is from a CNN article about the Fed’s new report…

Can you cover an unexpected $400 expense?
Four in ten Americans can’t, according to a new report from the Federal Reserve Board. Those who don’t have the cash on hand say they’d have to cover it by borrowing or selling something.

According to the report, the exact figure is 41 percent. 41 percent of all U.S. adults cannot cover an unexpected $400 expense. Let that number sink in for a moment.

I am sorry – if you can’t come up with $400 right now without borrowing it, you are broke.  And as of right now that is the financial condition of 41 percent of all Americans.
Amazingly, the Federal Reserve is actually trying to spin this report as good news…

“This year’s survey finds that rising levels of employment are translating into improved financial conditions for many but not all Americans,” Fed Governor Lael Brainard said.

Really?

Fortunately, there are others that are seeing right through the spin and are telling it like it is…

“The finding that four-in-ten adults couldn’t cover an unexpected $400 expense without selling something or borrowing money is troubling,” said Greg McBride, chief financial analyst at Bankrate.com. “Nothing is more fundamental to achieving financial stability than having savings that can be drawn upon when the unexpected occurs.”

And that wasn’t the only bad news in the report.

Here are some more incredible facts from the report as summarized by Zero Hedge…

• One-third of those with varying income, or 10 percent of all adults, say they struggled to pay their bills at least once in the past year due to varying income
• Over three-fourths of whites were at least doing okay financially in 2017 versus less than two-thirds of blacks and Hispanics.
• Over a quarter of young adults ages 25 to 29, and slightly more than 1 in 10 in their 30s, live with their parents.
• Over two-fifths of young adults in their late 20s provide financial assistance to their parents
• Nearly 25 percent of young adults under age 30, and 10 percent of all adults, receive some form of financial support from someone living outside their home.
• While 8 in 10 adults living in middle- and upper-income neighborhoods are satisfied with the overall quality of their community, only 6 in 10 living in low- and moderate-income neighborhoods are satisfied
• Seven in 10 low-income renters spend more than 30 percent of their monthly income on rent

And on top of all of that, here is one more really alarming number to chew on…

Even without an unexpected expense, the report reveals, 22% of adults expected to forgo payment on some of their bills in the month of the survey. “One-third of those who are not able to pay all their bills say that their rent, mortgage, or utility bills will be left at least partially unpaid.”

When 22 percent of the people in your country cannot pay their bills this month, that is called a crisis.

Yes, we are hopeful for better things for the U.S. economy under President Trump.  But the current blind optimism that we are witnessing out there right now is simply absurd…

A new poll shows an overwhelming number of Americans believe President Trump is playing a positive role in the current state of the economy.
The CBS survey reveals almost 70% of respondents think the president is –either mostly or somewhat– responsible for the current economic climate.
Additionally, around 65% of Americans believe the economy is doing well, compared to under 10% who think it’s doing ‘very poorly.’

Ladies and gentlemen, the U.S. economy has not had a full year of 3 percent GDP growth since the middle of the Bush administration. This is the longest stretch of below 3 percent growth in all of U.S. history by a very wide margin. So please don’t try to tell me that the U.S. economy is “doing well” until we can get back above that 3 percent number.

The sad truth is that we have been in a very long period of economic stagnation, and during this period wealth is being increasingly concentrated at the very top of the pyramid and the middle class is being systematically eviscerated.

Tens of millions of families are just barely scraping by from month to month, and when an unexpected emergency happens that is often enough to push a lot of families completely over the edge.

In fact, my good friend Daisy Luther recently wrote about how this actually happened to her own family…

Before my daughter’s illness, I was doing everything “right.”

• I had enough money in my emergency fund to carry me through 3 lean months
• I had numerous credit cards with zero balances
• My only debt was my car
• My kids are going to school without student loans
• I opted out of health insurance because it was more financially practical to pay cash (and I still agree with that decision)

Everything was great. Until it wasn’t.

I am sure that many of you can identify with Daisy.

Most of us have had a life-altering event cause serious financial stress at some point.  And close to half the country is completely unprepared for such an event.

For years, I have been strongly encouraging my readers to build up their emergency funds, because one thing that you can count on in life is that the unexpected will happen.  Having a good financial cushion is one of the best things that you can possibly do for yourself and your family financially, and if you haven’t gotten started on that yet, I would urge you to do so as soon as possible.

Michael Snyder is a nationally syndicated writer, media personality and political activist.  He is the author of four books including The Beginning Of The End and Living A Life That Really Matters.

The Federal Reserve Has Just Given Financial Markets The Greatest Sell Signal In Modern American History - Michael Snyder THE ECONOMIC COLLAPSE BLOG

The Federal Reserve Has Just Given Financial Markets The Greatest Sell Signal In Modern American History Posted: 05 Nov 2017  Michael Snyder  THE ECONOMIC COLLAPSE BLOG Why have stock prices risen so dramatically since the last financial crisis?  There are certainly many factors involved, but the primary one is the fact that the Federal Reserve has been creating trillions of dollars out of thin air and has been injecting all of that hot money into the financial markets.   But now the Federal Reserve is starting to reverse course, and this has got to be the greatest sell signal for financial markets in modern American history.  Without the artificial support of the Federal Reserve and other global central banks, there is no possible way that the massively inflated asset prices that we are witnessing right now can continue. The chart below comes from Sven Henrich, and it does a great job of demonstrating the relationship between the Fed’s quantitative easing program and the rise in stock prices.  During the last financial crisis the Fed began to dramatically increase the size of our money supply, and they kept on doing it all the way through the end of October 2017… Unfortunately for stock traders, the Federal Reserve has now decided to change course, and that means that the process that has created these ridiculous stock prices is beginning to go in reverse.  In fact, according to Wolf Richter this reversal just started to go into motion within the past few days… On October 31, $8.5 billion of Treasuries that the Fed had been holding matured. If the Fed stuck to its announcement, it would have reinvested $2.5 billion and let $6 billion (the cap for the month of October) “roll off.” The amount of Treasuries on the balance sheet should then have decreased by $6 billion. And that’s what happened. This chart of the Fed’s Treasury holdings shows that the balance dropped by $5.9 billion, from an all-time record 2,465.7 billion on October 25 to $2,459.8 billion on November 1, the lowest since April 15, 2015 Does anyone out there actually believe that the immensely bloated balance sheet that the Fed has accumulated can be unwound without having an enormous negative impact on Wall Street? And even more frightening is the fact that central banks all over the planet appear to be acting in coordinated fashion.  I really like how Brandon Smith made this point… An observant person, however, might have noticed that central banks around the world seem to be acting in a coordinated fashion to remove stimulus support from markets and raise interest rates, cutting off supply lines of easy money that have long been a crutch for our crippled economy.  The Bank of England raised rates this past week, as the Federal Reserve indicated yet another rate hike in December.  The Europeans Central Bank continues to prep the public for coming rate hikes, while the Bank of Japan has assured the public that “inflation” expectations have been met and no new stimulus is necessary.  If all of this appears coordinated, that is because it is. When interest rates are low and central banks are injecting money directly into the financial system, that tends to promote economic activity. But when they raise interest rates and pull money out of the financial system, the exact opposite is true. At this point Americans are more optimistic about the stock market than they have ever been before, and it is at this exact moment that the Fed is pulling the financial markets off of life support. And it isn’t as if the “real economy” ever recovered in any meaningful way.  Most American families are still living paycheck to paycheck, and a new economic crisis would push millions more out of the middle class. For a long time I have been warning that the only reason why stock prices ever got this high was because of the central banks, and I have also been warning that they could crash the markets if they wanted to do so. Hopefully there is nothing nefarious going on, but I do find it very strange that all of the major global central banks are moving toward tightening at the exact same time. If things go south for the global economy in the months ahead, we will know exactly where to point the blame… Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

Mass Shooting At Texas Church Shows Why Every Church In America Needs To Have Armed Security Posted: 05 Nov 2017 02:37 PM PST The mass shooting at the First Baptist Church in Sutherland Springs, Texas on Sunday morning is already being called the deadliest church shooting in modern U.S. history, and we need to be in prayer for the victims and for their families.  At about 11:30 AM, a heavily armed man entered the sanctuary and began shooting.  At this point it is being reported that “at least 27 people have been killed” and at least another 30 have been injured.  Tragically, reports indicate that several small children are among those that were murdered. As I write this, we are still waiting to hear from authorities about a motive.  We do know that the gunman is dead, but we haven’t been given any information about his identity. But whatever the motive was, this just goes to show that something like this could literally happen anywhere.  Only about 400 people live in Sutherland Springs, and I am sure that nobody ever expected something like this to happen on a Sunday morning… At least 27 people have been killed and 30 people have been injured in a mass shooting at a church in Sutherland Springs, Texas. A witness reported seeing the as-yet unidentified man walk into First Baptist Church and began shooting around 11:30 a.m. Sunday. Wilson County commissioner Albert Gamez Jr. told a CNN reporter that the gunman fled in a vehicle after the shooting and is now dead after a brief pursuit. Of course Democrats were already calling for gun control within minutes of this being reported by the national news. But gun control won’t stop tragedies such as this.  The bad guys are always going to find ways to get guns, and so disarming the rest of the population is a really, really bad idea. What we really need to do is to make sure that there is armed security at every church in America from now on.  If there had been armed security at the First Baptist Church in Sutherland Springs on Sunday morning, a whole lot of lives could have potentially been saved. Instead, the gunman was able to murder innocent people at will, and at one point he even stopped to reload his gun… The gunman was said to have fired a semi-automatic weapon into the packed congregation of about 50 during the middle of the service – stopping only to reload his gun, before fleeing. So many of us are victims of “normalcy bias” when it comes to tragedies such as this.  Since we grew up in an America where things like this rarely ever happened, we just assume that we don’t need armed security at churches, schools and other public events. But times have changed, and so must we.  Islamic terror is on the rise, Republican members of Congress are being attacked, anti-Christian hate is at unprecedented levels, and the number of mentally unstable people running around in our society has never been higher. So let’s do a couple of things. Number one, like President Trump let us grieve with the people of Sutherland Springs.  The following comes from Fox News… President Trump, who’s currently traveling in Asia, tweeted: “May God be w/ the people of Sutherland Springs, Texas. The FBI & law enforcement are on the scene. I am monitoring the situation from Japan.” Number two, let us push for armed security at all of our churches from now on.  Someday it may be your church that is attacked, and when that happens having armed security on hand will make all the difference. Personally, I am promising all of you that when I go to Congress I will never back down even a single inch when it comes to defending the 2nd Amendment. The left wants to take away all of our guns so that the bad guys with weapons can have free reign like they currently do in major cities such as Chicago. But the truth is that an armed society is a polite society, and we need to greatly resist any efforts by the left to take our guns away. Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

The World Is Now $217,000,000,000,000 In Debt And The Global Elite Like It That Way - Michael Snyder THE ECONOMIC COLLAPSE BLOG

The World Is Now $217,000,000,000,000 In Debt And The Global Elite Like It That Way

Posted: 29 Jun 2017  Michael Snyder  THE ECONOMIC COLLAPSE BLOG

The borrower is the servant of the lender, and through the mechanism of government debt virtually the entire planet has become the servants of the global money changers.  Politicians love to borrow money, but over time government debt slowly but surely impoverishes a nation.

As the elite get governments around the globe in increasing amounts of debt, those governments must raise taxes in order to keep servicing those debts.  In the end, it is all about taking money from us and transferring it into government pockets, and then taking money from government pockets and transferring it into the hands of the elite.  It is a game that has been going on for generations, and it is time for humanity to say that enough is enough.

According to the Institute of International Finance, global debt has now reached a new all-time record high of 217 trillion dollars…

Global debt levels have surged to a record $217 trillion in the first quarter of the year. This is 327 percent of the world’s annual economic output (GDP), reports the Institute of International Finance (IIF).
The surging debt was driven by emerging economies, which have increased borrowing by $3 trillion to $56 trillion. This amounts to 218 percent of their combined economic output, five percentage points greater year on year.

Never before in human history has our world been so saturated with debt.

And what all of this debt does is that it funnels wealth to the very top of the global wealth pyramid.  In other words, it makes global wealth inequality far worse because this system is designed to make the rich even richer and the poor even poorer.

Every year the gap between the wealthy and the poor grows, and it has gotten to the point that eight men have as much wealth as the poorest 3.6 billion people on this planet combined…

Eight men own the same wealth as the 3.6 billion people who make up the poorest half of humanity, according to a new report published by Oxfam today to mark the annual meeting of political and business leaders in Davos.

This didn’t happen by accident.  Sadly, most people don’t even understand that this is literally what our system was designed to do.

Today, more than 99 percent of the population of the planet lives in a country that has a central bank.  And debt-based central banking is designed to get national governments trapped in endless debt spirals from which they can never possibly escape.

For example, just consider the Federal Reserve.  During the four decades before the Federal Reserve was created, our country enjoyed the best period of economic growth in U.S. history.  But since the Fed was established in 1913, the value of the U.S. dollar has fallen by approximately 98 percent and the size of our national debt has gotten more than 5000 times larger.

It isn’t an accident that we are 20 trillion dollars in debt.  The truth is that the debt-based Federal Reserve is doing exactly what it was originally designed to do.  And no matter what politicians will tell you, we will never have a permanent solution to our debt problem until we get rid of the Federal Reserve.

In 2017, interest on the national debt will be nearly half a trillion dollars.

That means that close to 500 billion of our tax dollars will go out the door before our government spends a single penny on the military, on roads, on health care or on anything else.

And we continue to pile up debt at a rate of more than 100 million dollars an hour.  According to the Congressional Budget Office, the federal government will add more than a trillion dollars to the national debt once again in 2018…

Unless current laws are changed, federal individual income tax collections will increase by 9.5 percent in fiscal 2018, which begins on Oct. 1, according to data released today by the Congressional Budget Office.
At the same time, however, the federal debt will increase by more than $1 trillion.

We shouldn’t be doing this, but we just can’t seem to stop.

Let me try to put this into perspective.  If you could somehow borrow a million dollars today and obligate your children to pay it off for you, would you do it?

Maybe if you really hate your children you would, but most loving parents would never do such a thing.

But that is precisely what we are doing on a national level.

Thomas Jefferson was strongly against government debt because he believed that it was a way for one generation to steal from another generation.  And he actually wished that he could have added another amendment to the U.S. Constitution which would have banned government borrowing…

“I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.”

And the really big secret that none of us are supposed to know is that governments don’t actually have to borrow money.

But if we start saying that too loudly the people that are making trillions of dollars from the current system are going to get very, very upset with us.

Today, we are living in the terminal phase of the biggest debt bubble in the history of the planet.  Every debt bubble eventually ends tragically, and this one will too.

Bill Gross recently noted that “our highly levered financial system is like a truckload of nitro glycerin on a bumpy road”.  One wrong move and the whole thing could blow sky high.
When everything comes crashing down and a great crisis happens, we are going to have a choice.

We could try to rebuild the fundamentally flawed old system, or we could scrap it and start over with something much better.

My hope is that we will finally learn our lesson and discard the debt-based central banking model for good.

The reason why I am writing about this so much ahead of time is so that people will actually understand why the coming crisis is happening as it unfolds.

If we can get everyone to understand how we are being systematically robbed and cheated, perhaps people will finally get mad enough to do something about it.

House Of Cards: Netflix Is One Of The Poster Children For Tech Bubble 2.0 - Posted: 30 May 2017 Michael Snyder

House Of Cards: Netflix Is One Of The Poster Children For Tech Bubble 2.0

Posted: 30 May 2017 Michael Snyder

How can a company that is going to generate $2,000,000,000 in negative free cash flow in 2017 be worth 70 billion dollars?  Netflix has soared in popularity in recent years, but so have their financial losses.  Just like during the original tech bubble, investors are ignoring basic fundamentals and are greatly rewarding firms that are bleeding giant mountains of cash year after year just because they are trendy “tech companies”.  

But somewhere along the line you actually have to quit losing money if you are going to survive.  Just ask tech bubble 1.0 victims Pets.com, Webvan and Etoys.com.  The investors that poured enormous amounts of money into those companies ended up losing everything, and similar tragedies will play out as tech bubble 2.0 bursts.

So far in 2017, the S&P 500 is up about 8 percent, but FANG stocks (Facebook, Amazon, Netflix and Google) are up a whopping 30 percent.

But at least Facebook, Amazon and Google are making money.

Netflix is not.

So why in the world has the stock shot up by more than 30 percent so far this year?  It just doesn’t make any sense at all.  According to CNBC, during the first quarter Netflix had $423 million in negative free cash flow, and for the entire year it is being projected that it will have $2 billion in negative free cash flow…

The California-based company is now dumping cash into original content to maintain its dominance over its growing field of rivals. The company’s had $423 million negative free cash flow during the quarter, wider than the $261 million negative free cash flow a year ago. Netflix expects to have $2 billion in negative free cash flow this year.

The bleeding of cash at Netflix only seems to be accelerating.  The number for the first quarter of 2017 was 62 percent worse than the number for the first quarter of 2016, and it was more than twice as bad as the number for the first quarter of 2015.

It is hard to imagine that Netflix will ever be more popular than it is right now.

So if Netflix is not making a profit at this point, when will it ever make a profit?

Similar things could be said about Twitter.  This is a company that has never made a yearly profit and that is actually starting to see revenues decline.  But somehow the stock just continues to go up.  Since the last time I wrote about Twitter, the market cap has shot up another 1.5 billion dollars.

At this point, the market values Twitter at 13 billion dollars, but in the entire history of the company it has actually lost 2 billion dollars.

What we are witnessing is a modern day version of “tulip mania”, and at some point this irrational euphoria will come to a sudden end.  In fact, there are already some signs that tech bubble 2.0 may be in a significant amount of trouble.  The following is an excerpt from a Bloomberg article entitled “Investors Go All-In on Tech Giants”…

The tech-powered rally has catapulted the sector to a price-to-earnings ratio of 24.4, or 41 percent above the 10-year average. But as Google and Amazon stretch to nearly $1,000 a share, not everyone is comfortable with the valuations. Investors pulled more than $716 million from the most popular technology exchange-traded fund last week — the $17.4 billion Technology Select Sector SPDR Fund, or XLK — its largest weekly outflow in over a year, data compiled by Bloomberg show.
“Most everybody remembers 2000, so they might be getting a little nervous with this development,” said Maley. “I just wonder how many people have said to themselves, ‘If AMZN gets to $1,000, I’m going to take at least some profits.’”

All over the financial world, prominent voices are warning that the enormous financial bubbles that we see all around us are not sustainable and that a major crisis is heading our way.  I wrote about some of these voices yesterday, and today we can add Paul Singer to the list…

Given groupthink and the determination of policy makers to do ‘whatever it takes’ to prevent the next market ‘crash,’ we think that the low-volatility levitation magic act of stocks and bonds will exist until the disenchanting moment when it does not. And then all hell will break loose (don’t ask us what hell looks like…), a lamentable scenario that will nevertheless present opportunities that are likely to be both extraordinary and ephemeral. The only way to take advantage of those opportunities is to have ready access to capital.

When the financial markets collapse, Donald Trump will likely get most of the blame.

But Donald Trump did not create the stock market bubble, and he will not be responsible for ending it either.

Since the Federal Reserve was created in 1913, we have seen this same story play out over and over again.  There have been 18 distinct recessions or depressions since the Fed was established, and the more the Fed interferes in the marketplace the larger the booms and busts tend to be.

And it could be argued that this time around the Fed has manipulated financial markets more than ever before.  Interest rates were pushed as low as possible and trillions of dollars were pumped into the financial system during the Fed’s quantitative easing programs.  Of course those actions were going to create a huge bubble, and of course that bubble is going to inevitably burst.

Unfortunately, this is not just a game.  Real people with real hopes and real dreams are going to be absolutely devastated.  Millions of Americans that were carefully saving for retirement are going to be financially crippled, and pension funds all over the nation are going to be wiped out.

I don’t know why we can’t seem to learn from history.  And I am not talking about events that happened decades ago.  The build up to this coming crisis is so similar to what we witnessed just before the crashes of 2000 and 2008, but we just keep getting fooled over and over again.

But once things fall apart this time, I think that the American people will finally be fed up.  I think that they will be sick and tired of an unelected, unaccountable central bank that creates endless booms and busts, and I think that they will finally be ready to push Congress to shut the Federal Reserve down for good.

Love For His People Editor's Note: I believe in what Michael Snyder says. Being an accountant by trade, I can see it as he has truthfully and accurately written it out so often before.

I don't leave much cash in the bank; I am not letting my 401(K) build up too far without drawing out the cash (even with the penalties. Some is better than none.)

October 2017 seems to be a critical month to be prepared for in your financial situation.

I am encouraging you to listen, learn and act, as the Lord leads you to do in obedience.

Steve Martin

Founder/President

Love For His People, Inc.

The Federal Reserve Must Go - Michael Snyder THE ECONOMIC COLLAPSE BLOG

The Federal Reserve Must Go Posted: 14 May 2017   Michael Snyder  THE ECONOMIC COLLAPSE BLOG If you want to permanently fix America’s economy, there really is no other choice.  Even before Ron Paul’s rallying cry of “End The Fed” shook America during the peak of the Tea Party movement, I was a huge advocate of shutting down the Federal Reserve.  Because no matter how hard we try to patch it up otherwise, the truth is that our debt-based financial system has been fundamentally flawed from the very beginning, and the Federal Reserve is the very heart of that system.  The following is a free preview of an upcoming book that I am working on about how to turn this country is a more positive direction… ***** As the publisher of The Economic Collapse Blog, there have been times when I have been criticized for focusing too much on our economic problems and not enough on the solutions.  But I believe that in order to be willing to accept the solutions that are necessary, people need to have a full understanding of the true severity of our problems.  It isn’t by accident that we ended up 20 trillion dollars in debt.  In 1913, a bill was rushed through Congress right before Christmas that was based on a plan that had been secretly developed by very powerful Wall Street bankers.   G. Edward Griffin did an amazing job of documenting the development of this plan in his groundbreaking book “The Creature from Jekyll Island: A Second Look at the Federal Reserve”.  At that time, most Americans had no idea what a central bank does or what one would mean for the U.S. economy.  Sadly, even though more than a century has passed since that time, most Americans still do not understand the Federal Reserve. The Federal Reserve was designed to create debt, and of course the Wall Street bankers were very excited about such a system because it would make them even wealthier.  Since the Fed was created in 1913, the U.S. national debt has gotten more than 5000 times larger and the value of the U.S. dollar has declined by about 98 percent.  So the Federal Reserve is doing what it was originally designed to do.  In fact, it has probably worked better than the original designers ever dreamed possible. There is often a lot of confusion about the Federal Reserve, because a lot of people think that it is simply an agency of the federal government.  But of course that is not true at all.  In fact, as Ron Paul likes to say, the Federal Reserve is about as “federal” as Federal Express is. The Fed is an independent central bank that has even argued in court that it is not an agency of the federal government.  Yes, the president appoints the leadership of the Fed, but the Fed and other central banks around the world have always fiercely guarded their “independence”.  On the official Fed website, it is admitted that the 12 regional Federal Reserve banks are organized “much like private corporations”, and they very much operate like private entities.  They even issue shares of stock to the private banks that own them. In case you were wondering, the federal government has zero shares. The American people are constantly being told that Fed decisions must be “above politics” because they are “too important” to be politicized.  So even though everything else in our society is up for political debate, somehow we have become convinced that the Federal Reserve should be off limits. Today, the Federal Reserve has more power over the performance of the U.S. economy than anyone else does, and that includes the president.  The Fed has become known as “the fourth branch of government”, and a single statement from the chairman of the Fed can send global financial markets soaring or tumbling. So even though presidents tend to get most of the credit or most of the blame for how the U.S. economy is doing, the truth is that the Fed is actually the one pulling most of the strings.  In conjunction with Congress, presidents can monkey around with regulations and tax rates, but at the end of the day their influence over the economy pales in comparison to what the Fed is able to do. For those that have never encountered this material before, this can be difficult to grasp at first, so let’s start with something very simple. Go to your wallet or purse and pull out a dollar bill. At the very top, you will notice that it says “Federal Reserve Note” in big, bold letters. If you ask 99 percent of the people in the United States where money comes from, they will not be able to tell you.  Our money is actually created and issued by the Federal Reserve, but that is not what our founders intended.  According to Article I, Section 8 of the U.S. Constitution, Congress was expressly given the authority to “coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”. So why is the Federal Reserve doing it? Many Americans are still operating under the assumption that the federal government has a “printing press” and that if we ever get into too much debt trouble the government could simply create and spend lots more money into circulation. But that is not the way that our system currently operates. Instead, it is the Federal Reserve that creates all new money.  Once that new money is created, the federal government then borrows it and spends it into circulation. Previously, I have written about how this works… When the U.S. government decides that it wants to spend another billion dollars that it does not have, it does not print up a billion dollars. Rather, the U.S. government creates a bunch of U.S. Treasury bonds (debt) and takes them over to the Federal Reserve. The Federal Reserve creates a billion dollars out of thin air and exchanges them for the U.S. Treasury bonds. (http://theeconomiccollapseblog.com/archives/why-donald-trump-must-shut-down-the-federal-reserve-and-start-issuing-debt-free-money) This doesn’t seem to make any sense at all. Why does the U.S. government have to borrow money that the Federal Reserve creates?   Why can’t they just create the money themselves? This is the big secret that nobody is supposed to know about. Theoretically, the federal government doesn’t have to borrow a penny.  Instead of borrowing money the Federal Reserve creates, it could just create money directly and spend it into circulation. But then we wouldn’t be 20 trillion dollars in debt. Once the Federal Reserve has received U.S. Treasury bonds in exchange for the “Federal Reserve Notes” that the federal government has requested, the Fed auctions off those bonds to the highest bidder.  But as I have noted so many times before, this process always creates more debt than it does money… The U.S. Treasury bonds that the Federal Reserve receives in exchange for the money it has created out of nothing are auctioned off through the Federal Reserve system. But wait. There is a problem. Because the U.S. government must pay interest on the Treasury bonds, the amount of debt that has been created by this transaction is greater than the amount of money that has been created. So where will the U.S. government get the money to pay that debt? Well, the theory is that we can get money to circulate through the economy really, really fast and tax it at a high enough rate that the government will be able to collect enough taxes to pay the debt. But that never actually happens, does it? And the creators of the Federal Reserve understood this as well. They understood that the U.S. government would not have enough money to both run the government and service the national debt. They knew that the U.S. government would have to keep borrowing even more money in an attempt to keep up with the game. (http://theeconomiccollapseblog.com/archives/why-donald-trump-must-shut-down-the-federal-reserve-and-start-issuing-debt-free-money) Beginning in 1913, this process has created an endless debt spiral that has resulted in the U.S. being 20 trillion dollars in debt.  It is the biggest mountain of debt in the history of the world, and it didn’t have to happen. In fact, if we had been using debt-free money all this time we could theoretically be completely out of debt. A lot of conservatives out there are still under the illusion that if we could just grow the economy fast enough that we could possibly pay back all of this debt someday, but as I have demonstrated in a previous article, this is mathematically impossible.  (http://theeconomiccollapseblog.com/archives/it-is-mathematically-impossible-to-pay-off-all-of-our-debt) All of this debt threatens to destroy the bright future that our children and our grandchildren were supposed to have.  It is absolutely immoral to pass such a large debt on to future generations, but we are doing it anyway. Of course the United States is far from alone in this regard.  Today, more than 99.9% of the population of the world lives in a country that has a central bank. There is literally nothing else that the entire planet agrees upon almost unanimously, and yet somehow virtually the whole globe has chosen to adopt debt-based central banking. Do you think that this is just a coincidence? A handful of extremely small nations such as the Federated States of Micronesia still do not have a central bank, but the only large country not to have one is North Korea. I don’t understand why more people are not talking about this.  If we really want to reform how things are done economically, it should start with central banking. The truth is that we do not need a central bank. Let me say that again. We do not need a central bank. The greatest period of economic growth in all of U.S. history was when there was no income tax and no central bank. (http://theeconomiccollapseblog.com/archives/during-the-best-period-of-economic-growth-in-u-s-history-there-was-no-income-tax-and-no-federal-reserve) Such a system would be unimaginable to many people today, but it is entirely possible. Instead of a central bank creating debt-based currency for us, the federal government could create debt-free money directly. And instead of socialist central planners setting our interest rates for us, we could allow the free market to set our interest rates. We are supposed to be a free market nation with a free market economy, and so we don’t need Fed bureaucrats to run it for us. The free market will always do a better job in the long run then bureaucrats will.  As I noted earlier, the greatest period of economic growth in U.S. history was right before the Federal Reserve was created in 1913, but since that time there have been 18 distinct recessions or depressions: 1918, 1920, 1923, 1926, 1929, 1937, 1945, 1949, 1953, 1958, 1960, 1969, 1973, 1980, 1981, 1990, 2001, 2008. Now we stand poised on the brink of another major downturn, and people still aren’t getting it. As long as the Federal Reserve exists, there will be “booms” and “busts” like this. It is time for a change. During the good times, criticism of the Fed tends to subside.  And without a doubt, the bubble following the end of the last recession lasted much longer than a lot of people initially would have thought, but all Fed-created bubbles eventually end. We desperately need to get free from this system, and a huge step in that direction would be a rejection of debt-based currency. If you don’t think that this can happen, you should consider what happened in 1963.  President John F. Kennedy signed Executive Order 11110 which authorized the U.S. Treasury to issue debt-free “United States Notes” which were directly created by the federal government. Unfortunately, he was assassinated shortly after that executive order was signed. You can still find debt-free “United States Notes” in circulation today, and they are often for sale on auction sites such as eBay because people like to collect them. At any time, the White House could do something similar today. All it takes is the willingness to do so. The borrower is the servant of the lender, and the debt-based Federal Reserve system has turned all of us into debt slaves. If we do not want future generations of Americans to be enslaved to debt, we need to shut down the Federal Reserve and start using debt-free currency.  Any essential functions that the Fed is currently performing can ultimately be taken over by the U.S. Treasury, and of course we can make the transition gradual so that we don’t completely panic global financial markets. The global elite are using central banking and debt-based currencies to dominate the planet.  Today, the total amount of debt in the world has shot past 150 trillion dollars, and it will only continue to grow until humanity wakes up and realizes the insanity of using a debt-based financial system. Here in the United States, we need people in government that understand these things and that are willing to do something about it. The Federal Reserve must go, and I will never make any apologies for saying that.