The Fed Says, “Let Me Squeeze Your Dollars…5 Basis Points at a Time”
I still maintain no one will mark June 16th, 2021 as the day the world changed. Watching the dollar surge into this weekend thanks to a breakdown in the euro only validates that conclusion in my mind.
Remember, on June 16th Presidents Biden and Putin met for a summit which altered the course of geopolitics forever, agreeing to disagree about Nordstream 2 and reversing the worst of U.S./Russian relations among other things.
While that was happening the FOMC met and reversed the flow of dollars globally.
I told my Patrons something was up on June 18th. Then I did 2 hours worth of podcasts on it (here, here, and here) after thinking it through. Finally, after fully digesting it I wrapped it all up in a lengthy post on July 3rd.
The Fed’s decision to pay 5 basis point on Reverse Repos was the subtlest but most effective way to taper without tapering, tighten without tightening and undermine the WEF’s Great Reset while seemingly still supporting it.
I can hear the howls from the gallery who think otherwise so I’ll address them first.
Yes, normie macro-guys, the bond market has been screaming at the Fed that inflation is soaring and they need to raise rates.
Yes, first year domestic policy students, the Fed looks like it is putting pressure on Republicans to cave to Nancy Pelosi’s hardball over the Infrastructure, Budget and Debt Ceiling deadlock, so far to no avail.
Yes, second year geopolitics students, the Fed is forcing China to respond to soaring commodity prices while simultaneously trying to defend the yuan.
Yes, these are all effects of the Fed’s move in June.
From Wall St. With Love
But none of them are the real reason why the Fed did this. Because the real reasons are still hidden behind the veil of Jerome Powell’s seemingly incoherent Fedspeak on inflation.
Remember, everything in the U.S. politically today is meant to look like the country to a person is incompetent. Biden’s botched withdrawal from Afghanistan is the latest example. The fight over spending on Capitol Hill is another. The multiple diplomatic gaffes by Secretary of State Antony Blinken and his diversity hires are yet another.
It’s all there to reinforce the failing confidence we in Financial Crank-Space like to think ourselves so smart and insouciant to see.
It’s become the norm rather than the exception when a prominent U.S. official acts like a blithering idiot.
So, you can be forgiven if you just thought Powell’s publicly retarded comments about inflation felt like that to you as well.
But this, like so many other things we see, is also part of the psy-op. Because the first rule of Fed Watching is to never listen to what they say, that’s for the algorithms and the momo-monkeys chasing nickels in front of the freight train do.
Smart observers watch what they actually do. And with those 5 basis points the Fed defended itself and the dollar.
Because the Fed, as I’ve said multiple times now, works for Wall St. if it works for anyone other than itself.
So, it scans, strategically, that anything which jeopardizes the Fed’s hegemony over capital markets globally will be ruthlessly opposed by the FOMC when push comes to shove. I’m laying aside for now what the Fed’s longer-term goals are.
What I see, for the first time since Nixon closed the gold window fifty years ago, the Fed was getting hemmed in by outside forces looking to throw its favored sons, Wall St., to the wolves.
And that will not stand.
The world has been begging the Fed for more doll
Article from LewRockwell