COMMENT: A pal watched your interview on USAWatchdog, and his response was that you simply had been incorrect that the FED doesn’t want anybody to purchase the debt. The FED can print as a lot cash as Congress cares to spend. I used to be shocked that he didn’t comprehend that the FED will not be the issuer of the debt—that’s the Treasury. I feel some individuals don’t perceive the fiscal vs. financial system. It would assist the novices in case you elaborated on that.
He stated he by no means heard about that January sixth coup. I instructed him that you simply knowledgeable paying shoppers inside a number of weeks of January sixth about what went down. I’m glad you lastly put that out for most of the people. I do know it was dangerous again then.
Is the pc in a position to forecast Michelle Obama vs. Hillary being drafted?
BTW. Nice interview.
WL
REPLY: I feel you will have a degree. Many individuals have been confused by the fixed pretense that the FED runs all the things. I supposed that emerged due to the Quantitative Easing (QE). If you hear there’s a deficit of $7 trillion or no matter, that’s the FISCAL facet that has nothing to do with the FED. They don’t concern the debt; that’s the Treasury. The Federal Reserve can ONLY set the short-term rate of interest. Lengthy-term charges, reminiscent of mortgages, are set by the personal sector primarily based on provide/demand.
When there’s a monetary panic, individuals run for money – short-term as property and long-term debt declines. You will notice an INVERTED yield curve at instances when the short-term charges go above the long-term. We noticed a rash of financial institution failures when charges went up as a result of the short-term was nearly zero, and so they had been shopping for the long-term. Nevertheless, when short-term charges rose, bonds took a nose-dive since you then should compensate for that enhance within the rate of interest for the total length of the bond.
Now, the query that the federal government CANNOT default as a result of it will possibly print the cash is the everyday lack of know-how, primarily as a result of that was a gross sales pitch to promote gold. Right here is an previous commercial to promote gold from the early Eighties. The issue was gold declined for 19 years whereas the deficits continued to rise. The inflation situation didn’t work!
Look, the battle and default go hand-in-hand. The Treasury will default on overseas holders who they deem to be adversaries – this China is beginning to promote. The notion that the Fed would merely print all the cash to redeem the excellent debt is absurd. That might break the financial system and they’re going to haven’t any a part of that apart from it will bailout the enemy. That is why final December Powell got here out and warned that this debt is “UNSUSTAINABLE.” They could monetize some portion that’s home to stop a panic, however they haven’t any intention of monetizing the nation’s debt as an entire.
A lot of the debt is held inter-agency. They’ll play video games with that bunch. They won’t merely default on ALL the debt with out battle. Then you will have a NEW authorities kind that won’t honor the debt of the earlier.
So far as Hillary vs Obama, that is NOT my opinion. The pc can not forecast Hillary vs Obama with out placing of their private life ECMs. All I can say is that the Neocons are behind Hillary, for they KNOW she’s going to nuke Russia. Some are speaking about Hillary with Obama as VP, in order that they suppose they are going to get the Black Vote.
