Tag: federal reserve

Man In Charge of Inflicting Pain on U.S. Economy Indicates He Might Finally Be Satisfied

The chairman of the Federal Reserve announced Wednesday that he was satisfied by what he had seen. At the latest Federal Open Market Committee meeting, Jerome Powell effectively said that he believes the worst of the country’s inflation crisis is likely over, meaning that he was ready to end the era of simultaneous rising prices and interest rates, which has made buying everything from food to homes more expensive while also encouraging mass layoffs.

Prices aren’t likely to return to pre-pandemic levels ever again, at least across the board. But Wall Street doesn’t care much about that, and it pulled out the champagne and started celebrating like it was the 1980s. The Dow Jones Industrial Average hit a record high, and so many other numbers went up that Bloomberg described it as the “the best Fed day across assets in almost 15 years.” Treasuries, currencies, bonds, you name it, it probably went up. 

The vibe on CNBC is being described as “giddy.”  “We’re having a party,” Charles Schwab’s chief fixed-income strategist told Bloomberg. “JEROME’S IN THE HOUSE,” one giddy member of the Wall Street Bets community posted alongside a meme of the Fed chair printing cash. 

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Federal Reserve: desire for cash-like anonymity for digital assets based on ignorance

The Federal Reserve published a paper that explores various privacy strategies in digital asset ecosystems. A key point is that cash like anonymity is very unlikely in digital systems. Confidentiality from certain parties is the best to hope for.

It asserts the desire for cash-like anonymity is based on a misunderstanding of how digital systems work. Even with encryption, activity logs and audit trails leak small pieces of information. Of course, current versions of most public blockchains reveal an enormous amount of data which is easy to link to an identity by tracing wallets back to exchange onramps.

Although it may be true that anonymity is almost impossible to achieve in the digital realm, people desire it. While comparing digital systems to cash at a practical level, the paper doesn’t acknowledge the broad recognition that digital money will accelerate the crowding out of cash.

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Federal Reserve head is questioned on controversial “debanking of disfavored individuals”

During a recent House Committee hearing, Chair of the Federal Reserve Jerome Powell was grilled on “Operation Choke Point 2.0” — an alleged Biden administration effort that Rep. Warren Davidson (R-OH) described as being “particularly focused on debanking people that are disfavored by…the current…executive branch.”

Rep. Warren Davidson (R-OH) told Powell that he’d spoken with multiple bankers who said “they’ve never seen a higher degree of regulatory burden, steering guidance, shaping activities in the market from regulators.”

He attributed this heightened scrutiny to Operation Choke Point 2.0 — a reference to an alleged extension of Operation Choke Point 1.0. The first Operation Choke Point was an Obama-era debanking effort that began in 2013 and attempted to prevent gun dealers, payday lenders, and other companies that were deemed to be “high risk” from accessing banking services. Some people in the cryptocurrency industry claim that Operation Choke Point 2.0 is now being carried out by the Biden adminsitration and is primarily focused on deterring banks from doing business with cryptocurrency firms.

“When people really feel like some third party is going to steer or shape their money, they don’t trust it,” Davidson added. “I mean the unbanked and the underbanked fundamentally that’s lack of trust is part of why they don’t use our banking system today. In fact, that’s part of the appeal of the digital asset space…the permissionless nature of it.”

Davidson continued by suggesting that lots of people working in the financial services space “feel threatened by the prospect of change” and are attempting to restrict access to services such as cryptocurrency.

“They’ve maybe reluctantly concluded that you can’t ban crypto,” Davidson said. “They at least want to keep it account based so some third party can actually control the assets which is a polite way of saying, ‘We don’t actually trust our citizens to control their money or their assets, we’ll let somebody else do it for them because we can control those third parties.’”

Davidson then pressed Powell on whether financial regulators use their powers to control third parties.

“If you don’t comply with the regulatory regime, you don’t get to operate a financial services business, right?” Davidson asked Powell.

“That’s right,” Powell confirmed.

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FedNow Instant Payments Are Coming and CBDCs Will Follow

There’s absolutely no doubt that our financial system is in flux right now. We’re watching a storm approach, and it’s about to envelop the entire nation in chaotic conditions. If you think things are crazy now, just hang on to your halo…it’s about to get a whole lot worse.

Remember how we talked about CBDCs a few weeks ago, and lots of people in the comments said never, no way, and heck no? Well, unfortunately, it’s being rolled out and soon.

Of course, they’re not calling it CBDCs. Not yet.

It’s under another name, and it’s not quite a federal digital currency. I’m sure this, too, will be called a conspiracy theory, but the Federal Reserve is launching FedNow, an instant digital payment system. This in itself is not a Central Bank Digital Currency, but it puts into place the framework needed to make the idea a reality.

FedNew will be launched in July, according to a press release from the Federal Reserve.

What is FedNow?

On March 15th, in the midst of the banking collapses, the Federal Reserve issued a press release detailing a new instant payment system that will be launched in July. That system is called FedNow. Here’s what they said about it.

The first week of April, the Federal Reserve will begin the formal certification of participants for launch of the service. Early adopters will complete a customer testing and certification program, informed by feedback from the FedNow Pilot Program, to prepare for sending live transactions through the system.

Certification encompasses a comprehensive testing curriculum with defined expectations for operational readiness and network experience. In June, the Federal Reserve and certified participants will conduct production validation activities to confirm readiness for the July launch.

“We couldn’t be more excited about the forthcoming FedNow launch, which will enable every participating financial institution, the smallest to the largest and from all corners of the country, to offer a modern instant payment solution,” said Ken Montgomery, first vice president of the Federal Reserve Bank of Boston and FedNow program executive. “With the launch drawing near, we urge financial institutions and their industry partners to move full steam ahead with preparations to join the FedNow Service.”

Many early adopters have declared their intent to begin using the service in July, including a diverse mix of financial institutions of all sizes, the largest processors, and the U.S. Treasury.

This has all the hallmarks of a government strategy. First, they offer it as a “convenience” or a “safety measure.” Lots of people will jump on board in order to take advantage of this.

Of course, we’ve heard this song before.

Next, it will be pushed harder, and those who don’t adopt it will be mocked, thought of as backward, and treated with suspicion. After that, it’ll be darn near impossible to do anything without it. Sound familiar?

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IN CONFIDENTIAL MEMO, TREASURY SECRETARY JANET YELLEN CELEBRATED UNEMPLOYMENT AS A “WORKER-DISCIPLINE DEVICE”

Yellen wanted this to be the best of all possible worlds, but the best world she could conceive of was terrible.

In June 1996, Janet Yellen — then a member of the Federal Reserve Board of Governors, later chair of the Fed herself, and currently secretary of the Treasury — wrote an extraordinary memo to then-Fed Chair Alan Greenspan. Anyone who wants to understand how the world works should read it, and thank Tim Barker, a historian who obtained it via the Freedom of Information Act.

What makes the memo so telling is threefold.

First, while expressed in abstruse technical language, it shares a perspective with the most radical left-wing critiques of capitalism. Yellen goes 90 percent of the way to proclaiming, “The history of all hitherto existing society is the history of class struggles.”

Second, Yellen is not, of course, calling for a proletarian revolution. Rather, as Noam Chomsky has pointed out, “vulgar Marxist rhetoric is not untypical of internal documents in the government,” just “with values reversed.” In Yellen’s case, she is making the case for, as she writes, the positive “impact of heightened job insecurity.” A rise in worker insecurity in the mid-1990s meant everyone was too scared to ask for raises, which meant businesses wouldn’t need to hike prices, which meant even with the falling unemployment at the time, the Fed didn’t need to raise interest rates to slow the economy and throw people out of work.

Third, Yellen is not a monster. Indeed, from the perspective of regular Americans, she’s about as good as it gets at the summit of power. The problem, for those of us down here on the ground, is her overall worldview. She might personally want things to be nicer but is certain the science of economics places incredibly sharp limits on the possible, and all we can do is try to make small improvements within those limits.

The memo is titled “Job Insecurity, the Natural Rate of Unemployment, and the Phillips Curve.” Barker learned of it from references in the books “Maestro” by Bob Woodward and “Empathy Economics” by Owen Ullmann. Greenspan distributed the memo to the entire Federal Open Market Committee, or FOMC — the group that decides interest rates — and it worked. As Ullmann puts it, “Yellen rescued Greenspan from his tight spot.”

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FED Chairman Jerome Powell Met with FTX’s SBF in February 2022 When the FED Was Examining a Federal Digital Currency

The FED’s Jerome Powell met with then CEO and founder of FTX, Sam Bankman-Fried (SBF) in February 2022.  This was the same time that the FED was examining the implementation of a federal digital currency. 

FTX’s founder SBF is sleeping in his parents’ basement after being rated one of the youngest billionaires in the world.  The former crypto king is now facing nine counts by the DOJ in the Southern District of New York related to defrauding its customers.

During his incredible rise, SBF was meeting some of the world’s top financial operatives.  In February of 2022, SBF met with FED Chairman Jerome Powell.

It’s unknown what was shared at this meeting but a short time later in June 2022, the FED announced its plans to develop a central bank digital currency.

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Fed Blames Inflation on Americans ‘Splurging’ on Goods — Not the Trillions of Dollars they Printed

A few weeks ago, US Secretary of the Treasury Janet Yellen appeared on the Late Show With Stephen Colbert to discuss a range of issues both political and personal.

The most widely reported moment in the interview came when Yellen talked about practicing her signature (don’t ask me why this is newsworthy, I have no idea). However, a significantly more important moment has not gotten the attention it deserves.

When asked by Colbert to explain the reasons behind the worst inflation the US has experienced in 40 years, the former Federal Reserve chair blamed it primarily on rising consumer spending—Americans “splurging” on goods—at the start of 2021 once the Covid-19 lockdowns were lifted. This, compounded with supply chain issues and the war in Ukraine can sufficiently explain inflation, Yellen claims.

But can it really? Let’s take a closer look.

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