The true aim and nature of the federal reserve

Michael Pento is finally starting to get it – the fed is destroying the people of america…en masse. No one is speaking out about it. The best they can muster is a weak, “moral hazard”…or complain of some such policy. No, it is utter destruction, writ large and it is good to see someone, in this case Mr. Pento, start to come out against it. Here is his latest weekly letter:

“In a recent interview, I referred to the Fed as a disgusting institution. I want to explain why I believe that to be the case, as I do not like to disparage anyone or any entity indiscriminately or capriciously—only when absolutely necessary. To be clear, central bankers may not be nefarious in nature, but their product is iniquitous.

Any entity whose very purpose for existence is to destroy markets is inherently disgusting and, in the end, one that ends up being evil.  At its core, the Fed is Robin-Hood in reverse, stealing from the poor by destroying their purchasing power to give to the rich by inflating their asset prices. The Fed, along with all central banks, are inherently freedom killers, middle-class eviscerators, and economic destabilizers, regardless of stated intentions. If that wasn’t bad enough, the problem now is that the Fed has usurped markets to the point of no return.

The Fed’s very mandate encompasses the unholy operation of obliterating price discovery in its paramount function of determining what money actually costs. This process should only be the purview of the free market.  Of course, the level of interest rates does indeed affect all other asset prices. But the Fed wasn’t content with just an indirect influence on asset prices. It eventually morphed from its initial focus on rescuing troubled banks to ensuring stable prices and full employment and then turning to its ultimate purpose of promoting perpetual bull markets in stocks, bonds, and real estate. But the Fed isn’t even satisfied with that, it is now actually also in the business of ensuring the U.S. embraces a government that promotes egalitarian socialist principles and rejects its capitalist roots.

This function is by no means exclusive to America. In fact, such views originated in socialist Europe and are clearly manifest in the European Central Bank.

How far from reality and embracing free markets is the ECB?

The President of the ECB, Madame Lagarde, is now claiming that financial conditions are tightening and putting the nascent recovery from the pandemic in jeopardy. The reason for her concern is interest rates…they are simply rising too quickly and are now too high, in her opinion. And the level of interest rates is of so much concern that the ECB wants to stem that rise in bond yields. What is the level of sovereign borrowing costs that are now being deemed detrimental to the European economy? Well, for examples, the Spanish 10-year note is 0.3%, and the German 10-year note is negative 0.35%. And, because of these “excessively-high” and “frightening” borrowing costs, the ECB is now front-end loading its 1.8-trillion-euro money-printing scheme. In other words, stepping up the pace of its short-term bond-buying, so more bonds are bought presently rather towards the proposed end of its QE program in March 2022.

This is a perfect example of how warped our fiat monetary system has become. Only in the delusional mind of a socialist central banker could negative borrowing costs be excessive. That’s negative in nominal terms; forget about after adjusting for inflation, which sends those already negative yields much lower.

What about Jerome Powell? For now, rising yields are just representative of a healthy economy. This view was reiterated to at the March FOMC meeting and press conference. We have a 1.7% 10-year Note today. But what about once that yield hits 2%+ later this spring or early summer? Will the credit markets continue to function normally; what about the crowded Emerging Markets and short dollar trades? My guess is they will falter as rates breach 2% and lead to an extreme tightening of financial conditions. This is shocking for investors to grasp: if the economy and markets can’t function with benchmark Treasury rates at 2%, what will happen once they normalize to 6-7%?

However, here’s the point: tight financial conditions are coming regardless of what the Fed does. It is unavoidable precisely because of the humongous extent and duration these borrowing costs have been manipulated.

There’s no end in sight for the trap our central bank is in. For without the massive and indiscriminate purchases of the Fed, our Treasury auctions would fail. Meaning, private buyers would only show up after a super spike in yields; but that would render the government insolvent, along with bonds across the entire fixed-income spectrum. To this point, the federal budget gap widened 68% in the first five months of the fiscal year. For the 12 months that ended in February, the deficit totaled $3.5 trillion, or 16.5% of GDP. This, I remind you, is while debt service costs are at a record low and some 500 bps below average. Under a free-market interest rate regime, the deficit would be closer to 35% of GDP! Hence, my conclusion regarding the nefarious trade of central banking is irrefutable.

Our bond market is now in revolt. The conundrum now is that the Fed must continue to print money at a record pace to keep asset bubbles from crashing. However, if central bankers keep monetizing debt in its reckless pursuit of higher inflation, the disruptive move higher in bond yields could become absolutely intractable and catastrophic for these same asset bubbles.

Later on this year, and into 2022, we will be looking at an economy and stock market that will be suffering from higher taxes, higher interest rates on a massively increased corporate and government debt burden, and much higher inflation. In addition, there will be a fiscal and monetary cliff of record proportions—the Fed’s announcement to end the record $120b per month QE program and the wearing off of $6 trillion worth of government stimulus handed out y/y from March 2020-March 2021. Also, the efficacy of the vaccines on COVID-19 variants will become manifest. We may be faced with the fact that we will be living with this virus, along with various restrictions and lockdowns even after the vaccines have been fully administered. God forbid this to happen, but we must remain vigilant.

Hence, even if the market survives this late spring early summer’s interest rate spike, we will still have to deal with the eventual reconciliation of these asset bubbles once the record-breaking fiscal and monetary cliff arrives. Investors would be wise to avoid the Deep State of Wall Street’s set-it-and-forget-it portfolios and instead actively manage these wild swings between inflation/growth and deflation/depression.”

“What will Prevail? – Freedom or Tyranny?…”

By Clive Maund. Long read, but worth it:

2020 will go down as the year that the New World Order (NWO for short), after many years of building up to it, declared full on war against the rest of humanity, and since this war kicked off with an unprecedented “shock and awe” campaign it definitely got off to a flying start.

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Barge Movie Review – Mr. Friday Night

I grew up watching the barges ply the waters by my home. They were always mysterious…ships from a distant land, just passing through. Each with different colors and designs, carrying different loads. Coal, rock, liquid containers. So this movie fascinated me. Finally getting a glimpse into what it is like to live and work on a barge. Barge shows that they weren’t foreigners from distant lands but local guys “slipping and sliding” down the Mississippi.

**** 4 out of 4 stars

Free on Amazon Prime

How to Live the Nomad Lifestyle

“Off-road, off-grid: the modern nomads wandering America’s back country…”

Here is an interesting article about a new movie coming out Feb 19th called Nomadland, which shows the lifestyles of those who live out of their cars and travel around, on the cheap. Cancel your rent, buy a van and set up your home.

“If you look closely on city streets, campgrounds and stretches of desert run by the Bureau of Land Management, you’ll see more Americans living in vehicles than ever before. It was never their plan.

“If the Great Recession was a crack in the system, Covid and climate change will be the chasm,” says Bob Wells, 65, the nomad who plays himself in the film Nomadland, an early Oscar contender starring Frances McDormand. Bob helped April to adopt the nomad way of life and change her life in the process…

“Today, he lives exclusively on public lands in his GMC Savana fitted with 400 watts of solar power and a 12-volt refrigerator. His life mission is to promote nomadic tribalism in a car, van or RV as a way to prevent homelessness and live more sustainably.”

How Corporate Stores Impoverish Cities

Corporate is building one of the chain tire stores in my town, which was allowed of course by the great overseers on the building committee or zoning dept or whatever hideous name they use. Besides already having many tire shops in town, we needed more. Especially a corporate chain store. What they don’t understand is that corporate chain businesses impoverish an area by hoovering the money out of the local economy and sending it off to NYC, Charlotte or some other banker town. The zoning dept thinks that they get a nice looking, new building for the town…increased property taxes…and a few low paying service jobs. They don’t see that the business doesn’t add to a community…no one goes there to hang out and meet with others, talk, have coffee.

I once was going to write a travel book of america. In it I would document the areas and businesses of american towns. I could go to Des Moines and photograph the mcdonalds, wendys, wal marts, chain hotels and tire shops in the town. Then go to Tulsa and document the same. The same blandness, squatted across the land. Giving nothing back but a few low paid jobs…sucking the money from the local economy and sending it to corporate, impoverishing a people.

But such is life in a centrally planned economy…where those closest to power get access to virtually free money…and the little folk get access to a few thousand in credit card debt at 20+% interest…while their civilization is wiped out.

How to Become Rich…and Why It’s the Last Thing to Want

Nothing is sacred for a businessman. Everyday is a good day to acquire more money. It is their god – to get more money. All other values are below that of acquiring more money.

I’ve known a few wealthy people throughout my life…and to a man…they were uninteresting…plain…dull. There was nothing to separate them from anyone else, except they had acquired more money. None of them could play sweet music…or sing…or philosophize.

Why you don’t want to be rich

You have to have certain values and principles to become rich in the corrupted american society. You have to be like the rich. So what are they like? Let’s look:

Musk – owns a company that makes money getting handouts from the government…a’la carbon credits. A pure legalese scam. A man who has 6 kids with his wife and then abandons them.

Bezos – the richest man in the world, has a lovely family, abandons them for a plastic looking woman.

Zuckerberg – helping to destroy communities and friendship by moving it online. He moves to Hawaii and is detested by his neighbors. Now he has graduated up to limiting speech and the free expression thereof

Buffett – a doddering old man who spent his life accumulating money. When he dies he wants to give it all away. So what was the point then?

Bill Gross – a man who sprayed fart spray around his house in order to infuriate his ex wife. Clever I suppose for a child…but for an american billionaire tycoon?

In order to be rich in america you must be a moral infant. Don’t be like them. Money enough to be comfortable? Sure. But to make wads of lucre in a corrupt society you too must be a bland, easily corrupted weakling.

I remember reading about one of the richest men in American history…J.P. Morgan. If I recall correctly, he owned a large house in New York City. As he grew older he and his wife traveled the world, buying knickknacks everywhere they went. When he died they went to clean out his beautiful, ornate home and found that it was stuffed with doodads and other trash collected from all over the world. Much of it was thrown out, some went to museums.

This man, J.P. Morgan, helped to create the Federal Reserve…which to this day continues to enslave americans en masse. He did this so he could grow richer and in his retirement travel around and buy garbage the world over. The idea is almost unfathomable to me. To gain all the power money can buy…to be the highest ideal of an american one can be in being fabulously wealthy…so that you can stuff your house with garbage. This is what it is to be rich.

Tony Rice’s Advice to Musicians and all Artists

Beautiful…

One of the great guitarists of all time, Tony Rice, offers advice to artists at the 29:50 mark in the video below. He talks about not being a copycat, be original, play what is in your heart and be who you are called to be. My bold.

“Personally speaking there’s a world of Doc Watson clones out there, there’s a world of tony rice clones, and the unfortunate thing about those clones is no matter how technically proficient they are, and there are some of them out there that are virtual monsters of technical proficiency that could blow me away. But what that does when they do that is they have become a copy of someone else and they haven’t gone beyond that. So the way I look at all this scheme of things is not only am I a musician but I’m a spectator. That’s what gets me off the most. I don’t care about hearing me playing this dam thing near as much as I care about hearing your playing. What can you show me, what can you run by my ears that’s so good, that I love so much that I want to hear it again. And how you create that. Well I tell you what you ain’t gonna create by doing it like I do because I’ve already beat you to it. That’s what this forum is about.

Its what I’d like to see more of out of aspiring musicians or aspiring artists in general. It’s that ‘give that to me’, give me your heart give me your soul. Show me the uniqueness of yourself. How do you do this? How do you make this chord? What’s the tone you have coming out of this? And you know how you do that? You do it like working a Rubix cube. That’s the way you do it. You do it with trial and error, and mistakes. But then again I’m a product of everything that I’ve ever done, we all are. That would be my advice to you. Play from your heart and soul. Think of every time you pick up an instrument and play it or whatever you do with it, think of that as an extension of yourself, with the goal in mind that you have something to express, to be shared with somebody else and you hope that they dig it.

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