Powell: There will be a need for more fiscal support | Metals Mine

  • Powell: There will be a need for more fiscal support

Added at 1:55pm

Added at 2:00pm

Added at 2:01pm

Added at 2:07pm

Comment Options
Jade Gate
Jul 29, 2020 3:56pm
Permalink
Just look at the chart and see what the Fed's helicopter money has done since 2008. Sent the stock market to the moon. At ground level, nothing has changed except for the massive debt burden.

I think it's a case of over-compensating post the Great Depression that followed the 1929 crash. The pendulum has swung from one end of the spectrum to the absolute opposite, but both are equally disastrous.

There was a role for the Fed, but the "too big to fail" argument took hold and now hypnotically mesmerizes the lot of them. There is no brake, and therefore no hope of genuine organic growth that springs from a natural wellspring of economic well-being, vs the current artificially manufactured growth. They are hopelessly addicted to growth at any price (because without growth, they can't service debt).

Less intervention would have allowed the market and the economy to find it's own natural contraction point, from which real growth could then have emerged, more subtly supported by targeted Fed funds instead of the complete overkill we've seen. Viable robust businesses would have thrived, those less viable would fold. The natural way of things.

What we have now is a mind-set that nothing unpleasant should ever happen (aka problem = immediate "solution"), but avoiding pain is just kicking the can down the road, imo. The pain will be so much worse when it all unravels.
Attached Image (click to enlarge)
Click to Enlarge Name: SPX500USDMonthly.png Size: 49 KB
Reply
Jade Gate
Jul 29, 2020 2:57pm
Permalink
Blind Freddie to Powell: The people are starving and have no bread. Powell to Blind Freddie: Let them eat cake.

He just doesn't get it, is never going to get it. The US Fed is the cause of the problem, not the solution. 12 years of QE and what has it achieved for the real economy? Nothing. Except to make the rich richer and shift the debt burden to future generations. Not his problem, he and Wall St are much too busy eating cake.
Reply
fxsport
Jul 29, 2020 3:07pm
Permalink
Quoting Jade Gate
Blind Freddie to Powell: The people are starving and have no bread. Powell to Blind Freddie: Let them eat cake. He just doesn't get it, is never going to get it. The US Fed is the cause of the problem, not the solution. 12 years of QE and what has it achieved for the real economy? Nothing. Except to make the rich richer and shift the debt burden to future generations. Not his problem, he and Wall St are much too busy eating cake.
1. I "agree" with you more than I disagree.

2. You wrote, "The FED is the cause of the problem, not the solution." I thought that the problem with Cov19 which caused a world-wide economic closure. Millions of people were suddenly without any income and forced to fend for themselves. The passage of the CARES act was quick and effective - it got the $ to the individuals quickly; nevertheless programs like PPP were nothing more than boondogales for big business and a curse for smaller business'es like mine.

3. What the FED is doing now is NOT QE, not even close! They are just throwing money at a problem that no one can quantify - how long will it last, how bad will it be, how much will it cost....

Can I ask a question without sounding too crude?

What the hell was the FED supposed to do? I don't like the PPP and airlines bailout and other things but frankly I don't have a better answer. Is this the point where we start Universal Income? I'm against that personally but can we at least talk about solutions, even if they aren't?

I'm just sick and tired....first the virus, then the protests, then the riots, then more lockdowns, now school's on, wait school's off, wait it's on again, vaccine's coming along fine, oh wait that's in 2021....

What's the solution?
Reply
Jade Gate
Jul 29, 2020 8:45pm
Permalink
Quoting fxsport
{quote} Jade, Again I agree with you on what you wrote up to the ending...again I ask, what should the FED do? In your scenario, which is something that I would/could have written 5 years ago, a painful end awaits and is inevitable; that is something I referred to as the doom and gloom world. Let me ask you this - why does it have to end? Why can't this continue forever? .
Because debt has to be repaid. Because the US issues bonds that have interest needing to be paid. Because the global economy we once lived in is changing forever. Because growth is driven by consumers, consumers without money and no inclination to spend is bad for business (no matter how much Fed or Treasury lipstick on the pig). Because the USD is in short supply thanks to excess liquidity, it will eventually come back to bite them.

But I hear you.
Reply
Jade Gate
Jul 29, 2020 9:13pm
Permalink
Quoting LDFX
{quote} Don’t get me wrong, I did find your comments interesting. But it’s all about being the Alpha, such as in trading. We might all comment as much as we want but in the end we just have no clue what is it to run the FED and that is why it’s all what we are doing, running comments, instead of sitting in those sooo cozy chairs.
No worries . I did think about flicking Jerome an email yesterday just to say "oi, you! stop playing with it, you're embarrassing yourself" (helicopter money of course).
Reply
wlthbuilder
Jul 29, 2020 3:48pm
Permalink
Quoting fxsport
{quote} 1. I "agree" with you more than I disagree. 2. You wrote, "The FED is the cause of the problem, not the solution." I thought that the problem with Cov19 which caused a world-wide economic closure. Millions of people were suddenly without any income and forced to fend for themselves. The passage of the CARES act was quick and effective - it got the $ to the individuals quickly; nevertheless programs like PPP were nothing more than boondogales for big business and a curse for smaller business'es like mine. 3. What the FED...

Aside from too many Chinese imports for far too long, the problem is now US ! Initially, it was COVID-19, and shutting down the economy and having people stay sheltered started to solve the problem. Then, we opened back up and there was not an equivalent to sheltering while being open. Wearing a mask, washing your hands and not touching your face until you do is the best answer to a microscopic problem - trouble is, we aren't following it.

We need to wear masks -- all of us at all times when out to work, grocery shopping, getting gas, exercising -- shelter otherwise. Easier said than done but if we buckle down and be fanatically diligent, it's solved in 30-45 days. We are going in 4 months ... way too long if we do what is necessary.
Reply
Jade Gate
Jul 29, 2020 8:30pm
Permalink
Quoting mnwind
Jade, I like your analysis and comment. The question is when will this end? How to get through this? What is the appropriate action to take? I'm from USA. .
Suspect it's too late to invest in this bubble. It's nearing it's end. You can either buy some Sept/Oct index put options, or short the indexes on your CFD platform, just gotta pick the right moment for the latter.
Reply
Jade Gate
Jul 29, 2020 8:49pm
Permalink
Quoting LDFX
{quote} Yes of course, the fed’s executives are in their chairs because they have no clue and haven't read some forexfactory posts
Actually, I've been quite surprised in the last week re the number of articles coming out from analysts and finance journo's all saying the same thing..... critical of the disconnect the Fed has with the real economy.

And yeah, those cushy office chairs are sooo cosy.
Reply
fxsport
Jul 29, 2020 8:32pm
Permalink
Quoting Jade Gate
Just look at the chart and see what the Fed's helicopter money has done since 2008. Sent the stock market to the moon. At ground level, nothing has changed except for the massive debt burden. I think it's a case of over-compensating post the Great Depression that followed the 1929 crash. The pendulum has swung from one end of the spectrum to the absolute opposite, but both are equally disastrous. There was a role for the Fed, but the "too big to fail" argument took hold and now hypnotically mesmerizes the lot of them. There is no brake,...
Jade, Again I agree with you on what you wrote up to the ending...again I ask, what should the FED do?

In your scenario, which is something that I would/could have written 5 years ago, a painful end awaits and is ineviatable; that is something I referred to as the doom and gloom world.

Let me ask you this - why does it have to end? Why can't this continue forever?

I used to be a big USA debt hawk; an advocate of the Contract with America. Then one day I realized why bother? With the USA debt what happens when the debtors come calling, will they repo New York or LA? How many bonds do you need to hold for a B52?

My point is what if all we were taught and believed about economics was wrong?

Scary ....or just the rambling of a mad man.....?
Reply
LDFX
Jul 29, 2020 8:35pm
Permalink
Quoting C7harry
{quote} The fed should read this...

Yes of course, the fed’s executives are in their chairs because they have no clue and haven't read some forexfactory posts
Reply
LDFX
Jul 29, 2020 8:54pm
Permalink
Quoting Jade Gate
{quote} Actually, I've been quite surprised in the last week re the number of articles coming out from analysts and finance journo's all saying the same thing..... critical of the disconnect the Fed has with the real economy. And yeah, those cushy office chairs are sooo cosy.
Don’t get me wrong, I did find your comments interesting.

But it’s all about being the Alpha, such as in trading. We might all comment as much as we want but in the end we just have no clue what is it to run the FED and that is why it’s all what we are doing, running comments, instead of sitting in those sooo cozy chairs.
Reply
Nico05
Jul 29, 2020 3:35pm
Permalink
Dovish..Save & Invest your money in Gold safehaven
Reply
Jade Gate
Jul 29, 2020 8:35pm
Permalink
Quoting C7harry
{quote} The fed should read this...
I wish.
Reply
LDFX
Jul 29, 2020 9:18pm
Permalink


And don’t forget to send him a link to this thread .
Reply
Compulsive
Jul 29, 2020 2:06pm
Permalink
"FED CHAIR POWELL SAYS FED WILLING TO DO WHAT WE CAN FOR AS LONG AS IT TAKES"
at what cost -
Reply
mnwind
Jul 29, 2020 5:18pm
Permalink
Jade, I like your analysis and comment. The question is when will this end? How to get through this? What is the appropriate action to take?

I'm from USA. If I don't participate in this "bubble", my saving will lose value comparing to other people. There is ~"0" interest rate currently. Savers get punished. And excessive speculation is rewarded.

My company uses kind of traditional operation model, no debt, lots of cash in banking account, pay tax, less growth. Our stock price gets stuck at low level. Our competitors borrow money like crazy, no profit, no net income, no tax, borrow new money to pay back old debt, huge debt (may never be able to cover), but more active in the news. Wall Street loves it. Their company value is twice as much as ours.

This is the world we are in today. New Reality! Not the capitalism I used to know




Quoting Jade Gate
Just look at the chart and see what the Fed's helicopter money has done since 2008. Sent the stock market to the moon. At ground level, nothing has changed except for the massive debt burden. I think it's a case of over-compensating post the Great Depression that followed the 1929 crash. The pendulum has swung from one end of the spectrum to the absolute opposite, but both are equally disastrous. There was a role for the Fed, but the "too big to fail" argument took hold and now hypnotically mesmerizes the lot of them. There is no brake,...
Reply
C7harry
Jul 29, 2020 5:59pm
Permalink
Quoting Jade Gate
Just look at the chart and see what the Fed's helicopter money has done since 2008. Sent the stock market to the moon. At ground level, nothing has changed except for the massive debt burden. I think it's a case of over-compensating post the Great Depression that followed the 1929 crash. The pendulum has swung from one end of the spectrum to the absolute opposite, but both are equally disastrous. There was a role for the Fed, but the "too big to fail" argument took hold and now hypnotically mesmerizes the lot of them. There is no brake,...
The fed should read this...
Reply
Nico05
Jul 29, 2020 2:17pm
Permalink
Yeah Will collapse weak $$
Reply
silecy
Jul 29, 2020 2:10pm
Permalink
lol
Reply
  • Story Stats