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The Fed's Latest Welfare Payout to the Crooked Wall Street Banks
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On Thursday, the Federal Reserve announced its biggest market intervention to date, a massive $1.5 trillion injection into the short-term funding markets (“repo”) aimed at preventing grossly-inflated stock valuations from resetting at lower prices. There should be no misunderstanding about the Fed’s real intention or whether its meddling will work. When financial assets are purchased in bulk, prices rise, that is the immutable law of the market. Stocks and bonds do not differentiate between day-traders and Central Bankers. What matters is the amount of money and what securities are purchased. What we know from 3 iterations of Quantitative Easing (QE) is that, when the Fed buys financial assets (USTs or MBS) stock prices climb higher. Friday’s trading will undoubtedly produce the same result.

We also know that the Fed’s circuitous blabbering never explains their real objectives. The Fed is not trying to ease “ominous trading conditions” or “counter signs of market dysfunction ” or “address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak.” That’s all diversionary mumbo-jumbo. The Fed’s real goal is to prevent the markets from working the way they are supposed to work, to prevent basic price discovery, because price discovery will dramatically reduce valuations leaving banks and other financial institutions deep underwater.

Price discovery is the means through which an asset’s price is set by matching buyers and sellers according to a price that both sides find acceptable. It is largely driven by supply and demand. It is a useful mechanism to gauge whether an asset is currently overbought or oversold. Price discovery is the central function of a marketplace and is the process of finding out the price of a given asset or commodity. (Investopedia)

When an outside actor, like the Fed, intervenes in the market and creates fake demand for financial assets that investors have shunned, it is destroying the “central function” of the free market. It is asserting power over the market to set prices and, by doing so, assumes the role of Central Planner. That is what the Fed is doing by stopping the market from clearing. It is “price setting”. It is pushing stock prices higher than their true market value by loading up on mainly US Treasuries which dramatically distort rates while inflating the price of government bonds. We can only guess what the yield on the benchmark 10-year Treasury would be if the Fed had not purchased $2 trillion of them to save the insolvent banks from bankruptcy in 2008? And, in case there is any doubt about that matter, here is a straightforward admission by former-Fed chairman Ben Bernanke during the post-Lehman congressional hearings:

“As a scholar of the Great Depression, I honestly believe that September and October of 2008 was the worst financial crisis in global history, including the Great Depression. If you look at the firms that came under pressure in that period. . . only one . . . was not at serious risk of failure. So out of maybe the 13 of the most important financial institutions in the United States, 12 were at risk of failure within a period of a week or two.

Think about that. They were all broke, all the biggest banks on Wall Street were completely busted. But they were brought back to life by Lazarus Bernanke’s emergency rates, giveaway loan programs and lavish liquidity injections. At the same time, the American people were deliberately misled about the process that was underway, just as they are being misled about today’s intervention. What is actually taking place is another multi-trillion dollar bailout that is going to seriously undermine confidence in US Treasuries as a reliable barometer of financial asset value. Here’s an excerpt from an article by Bernanke’s right-hand man during the last crisis, Kevin Warsh, who underscores the risks the Fed is taking by intervening in the markets:

“The Fed’s increased presence in the market for long-term Treasury securities also poses nontrivial risks. The Treasury market is special. It plays a unique role in the global financial system. It is a corollary to the dollar’s role as the world’s reserve currency. The prices assigned to Treasury securities–the risk-free rate–are the foundation from which the price of virtually every asset in the world is calculated. As the Fed’s balance sheet expands, it becomes more of a price maker than a price taker in the Treasury market. And if market participants come to doubt these prices–or their reliance on these prices proves fleeting–risk premiums across asset classes and geographies could move unexpectedly. The shock that hit the financial markets in 2008 upon the imminent failures of Fannie Mae and Freddie Mac gives some indication of the harm that can be done when assets perceived to be relatively riskless turn out not to be.” (“The New Malaise”, Kevin Warsh, Wall Street Journal.)

Here’s more from Warsh on the unintended consequences of the Fed’s interventions that create powerful incentives for risky behavior that undermine investment, inflate asset values, and damage the real economy.

“Extremely accommodative monetary policy, including the purchase of about $3 trillion in Treasurys and mortgage-backed securities during three rounds of “quantitative easing” (QE), pushed down long-term yields and boosted the value of risk-assets. Higher stock prices were supposed to drive business confidence and higher capital expenditures, which were supposed to result in higher wages and strong consumption. Would it were so.

Business investment in the real economy is weak … In 2014, S&P 500 companies spent considerably more of their operating cash flow on financially engineered buybacks than real capital expenditures for the first time since 2007 … We believe that QE has redirected capital from the real domestic economy to financial assets at home and abroad. In this environment, it is hard to criticize companies that choose “shareholder friendly” share buybacks over investment in a new factory. But public policy shouldn’t bias investments to paper assets over investments in the real economy.” (The Fed Has Hurt Business Investment, Michael Spence And Kevin Warsh, Wall Street Journal)

The Fed is destroying the system it is entrusted to safeguard. It’s acting as a stooge for the banks instead of an impartial referee whose job is to oversee and regulate the financial system so capital is efficiently deployed to productive investments that benefit the American people. Does anyone think the Fed is acting within its mandate by pumping the system with liquidity so crooked banks can cream bigger profits off their casino operations?

No one, and yet it continues.

There’s no way to know the true value of the benchmark 10-year Treasury (which is the “the foundation from which the price of virtually every asset in the world is calculated”) because the Fed’s relentless mucking-around has distorted prices beyond recognition. Imagine for a minute if the central banks had not purchased trillions of dollars in sovereign bonds during the financial crisis? Imagine where rates would be today?

Rates would not only be positive, they’d also be “normalized” which was the Fed’s stated goal when it tried to reduce its $4 trillion dollar balance sheet last year but then suddenly slammed on the brakes when stocks fell and the crybaby banks began howling. So now the Fed has abandoned normalization altogether while its balance sheet remains permanently submerged in red ink.

But how is capitalism supposed to work if rates are stuck at zero or go negative? Interest rates are the jet-fuel that energize capitalism. The “marginal efficiency of capital” refers to the returns that are expected from a capital asset during the time it is held by an investor. If those expected returns are reduced to zero, then the incentive to invest vanishes, the system is stood on its head, and capitalism no longer works. What is left is not productive investment, innovation or socially-beneficial development. What’s left is rampant speculation, asset prices that are completely divorced from reality, and the endless build-up of paper claims on imaginary wealth. Isn’t this an apt description of today’s Fed-generated market?

And now the Fed is at it again, tilting the system so the bulk of the nation’s wealth continues to flow upwards. Here are some of the shocking details about this latest bank bailout:

The New York Fed said it will offer its primary dealers another $500 billion in a 3-month loan and another $500 billion in a one-month loan….Both 3-month and 1-month loans will be offered weekly “for the remainder of the monthly schedule.” That means $1 trillion a week will be available at below-market interest rates until the middle of April.

That will be on top of the $175 billion the Fed is offering daily in one-day loans and the $45 billion it is offering each Tuesday and Thursday in 14-day loans. This is a dramatic expansion of the Fed’s balance sheet to support Wall Street — all without one vote, or debate, or hearing occurring in Congress.” (“Federal Reserve Announces Unprecedented $1.5 Trillion in Loans to Wall Street Today and Tomorrow” Wall Street on Parade)

In one fell swoop, the Fed has become the market, the whole market and nothing but the market. This new bailout is not $1.5 trillion, it is more than $1 trillion per week for the remainder of the monthly schedule. This explains why “risk-free” US Treasuries sharply rose during yesterday’s selloff, it’s because the banks moved into cash so they would have the resources they needed to lend to all the desperate businesses (Cruise lines, airlines etc) that have been whacked by the coronavirus.

Wall Street Bankers Visit Trump on Wednesday

Some readers may have noticed that, on Wednesday, the CEOs from Wall Street’s biggest banks visited Trump in the White House to tell the president how well capitalized they were. Why would they do that? Why did they need to visit Trump to tell him how great they were doing?

It’s because they knew that, in less than 24 hours, the Fed was going to announce that it was dumping trillions of dollars in to the repo market and they’d be back on Easy Street. That’s why.

It was all a set-up. The fleecing of the American people is just one big freaking set up after the other. It’s infuriating.

Are the banks in trouble again? Is that why we’re being subjected to this latest sheering?

Of course they’re in trouble. Do you think you can slash $10 trillion off stock valuations and shove oil off a cliff and not have the banks in trouble?? The banks are heavily invested in oil, just as they are in derivatives trades, loans to shaky hedge funds, and stocks that are currently in freefall. Which is why the Fed has wheeled in the heavy artillery.. Check out this excerpt from an article at The Wall Street Journal:

The deepening Wall Street rout is adding to pressure on U.S. banks, as the retreat of investors from risky assets saddles lenders with securities they are struggling to sell at desired prices. The crunch has been evident in the share prices of the largest U.S. financial firms, which have fallen 30% or more in many cases over the past month. Citigroup Inc. dropped 8.6% on Wednesday, extending its decline to 36%, nearly doubling the drop in the S&P 500…

When markets come under duress as they have over the past couple of weeks, asset prices are pushed to levels where you begin to see margin calls and other internal activity that is not always visible on the surface,” said Daniel Deming, a managing director at Chicago-based KKM Financial.

The most surprising development for traders Wednesday: the sharp decline in the price of U.S. Treasury securities, which until this week had consistently risen significantly on days when U.S. stocks were falling. The price declines sent yields higher after dropping to record lows and were fueled in part by banks selling U.S. government securities to reduce inventories and raise cash. Rates are low enough that Wednesday’s action itself didn’t hurt banks, but the unusual nature of the move raised eyebrows.”

People familiar with some of the largest securities-dealing banks said many firms bought corporate bonds as prices fell last week, but those purchases resulted in some banks having balance sheets that executives deemed too large. With prices barely having recovered in many markets, some banks chose to sell Treasuries instead, in part reflecting their significant appreciation in recent weeks.” (“Wall Street Plunge Stresses Banks, Treasury Markets”, Wall Street Journal)

Let’s recap: Why are the banks selling Treasuries?

Because they need the cash.

Why do they need the cash?

Because–according to the author– the banks are stuck with a bunch of stocks “they are struggling to sell at desired prices.”

But that just means stock prices have dropped, it doesn’t explain why the banks need cash?

True, the only reason they would need cash is if they borrowed the money to buy the stocks in the first place, which is what the author suggests when he refers to “margin calls and other internal activity that is not always visible on the surface.” In other words, the banks need cash because their portfolio is underwater and they are leveraged up to their eyeballs.

According to the article: “People familiar with some of the largest securities-dealing banks said many firms bought corporate bonds as prices fell last week, but those purchases resulted in some banks having balance sheets that executives deemed too large.”

Corporate bonds?!? The corporate bond market froze last week, no activity at all, a complete graveyard. If the banks were dabbling in that garbage, then they must’ve gotten burned bigtime which would explain why they want another bailout from Uncle Sugar.

It’s worth noting that none of this has anything to do with the Fed. The banks were playing the stock market and lost their shirts. Who cares? Break ’em up, auction off the good assets, ring-fence the bad, install new management, and start over. That’s how the system is supposed to work. You roll the dice, and if you come up snake-eyes, you go home. End of story. That’s what we should have done in 2008 instead of keeping these parasites on life support so they could take us all over the cliff for a second time in 10 years. It’s ridiculous!

Keep in mind, the Trump administration has only allocated a lousy $8 billion to fund its response to coronavirus. So the American people –all 330 million of them– will get a whopping $8 billion while the crooked Wall Street banks get regular multi-trillion dollar infusions that allow them to swap their crappy, dog-eared securities for cold-hard cash. The banks will then roll over these 3-month loans indefinitely turning their short-term debts into perennial welfare payouts. Does that sound fair to you?

This is why people despise the Federal Reserve. They don’t see the Fed as an impartial arbiter fulfilling its mandate of price stability and full employment but an evil puppetmaster that wants to rule the world. That, of course, is a gross exaggeration. In truth, the Fed is no different than the FAA, a thoroughly corrupt and unreformable “rubber stamp” agency that is entirely controlled by the corporations it’s supposed to regulate. This latest multi-trillion dollar travesty just proves what we’ve known for a long time, that the Fed always operates in the exclusive interests of its reprobate constituents, the crooked Wall Street banks.

 
• Category: Economics • Tags: Donald Trump, Federal Reserve, Wall Street 
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  1. anon[228] • Disclaimer says:

    What asset is Fed buying when it gives money to bank either for repo market ( when bank cant buy because it doesn’t have the cash ) or for bail out like it did in 2008 and like it plans now with 1 trillion injections? Is it buying at current prices or previous higher prices?

    Are the buying the building or buying the stocks owned by Bank or buying bonds or even derivatives ?

    Is bank buying the same stuff back later in same or higher or lower prices later ?

    Now the Fed has it . Who is going to to buy it? How does Fed unload it ?

  2. Great article, cuts right to the heart of the matter.

  3. Svevlad says:

    Yes, but what’s important is will it work?

    It does make me sound devilish, but I hope this coronavirus thing lasts extra long, just so that all measures aimply don’t work anymore and the entire thing simply dies in horrible unimaginable pain and suffering. Then shoot the usurers too for good measure

    • Replies: @whattheduck
  4. Yahya K. says:

    I know this is an unpopular thing to say in this forum, but the Fed is right on doing this. They are taking proactive steps to mitigate a financial panic that could be as severe as any we’ve seen. The correct response to a panic is to inject money into the money markets. It’s been proven to have worked during panics in South Korea, Mexico, and the US during the Great Recession.

    But don’t just take it from me. Walter Bagehot, a sagacious Victorian-era financial commentator, is known for his dictum that “to avert panic, central banks should lend early and freely, to solvent firms, against good collateral, and at high rates”. He wrote an excellent book called Lombard street (I highly recorded reading all his books, particularly ‘Biographical Studies’. He was an excellent writer and a wise observer of subjects ranging from literature to politics to financial markets), where he outlined this philosophy, drawing lessons from the Bank of England’s response to the Overend-Gurney crisis:

    Lending by the central bank in order to stop a banking panic should follow two rules:

    First. That these loans should only be made at a very high rate of interest. This will operate as a heavy fine on unreasonable timidity, and will prevent the greatest number of applications by persons who do not require it. The rate should be raised early in the panic, so that the fine may be paid early; that no one may borrow out of idle precaution without paying well for it; that the Banking reserve may be protected as far as possible.

    Secondly. That at this rate these advances should be made on all good banking securities, and as largely as the public ask for them. The reason is plain. The object is to stay alarm, and nothing therefore should be done to cause alarm. But the way to cause alarm is to refuse some one who has good security to offer… No advances indeed need be made by which the Bank will ultimately lose. The amount of bad business in commercial countries is an infinitesimally small fraction of the whole business… The great majority, the majority to be protected, are the ‘sound’ people, the people who have good security to offer. If it is known that the Bank of England is freely advancing on what in ordinary times is reckoned a good security—on what is then commonly pledged and easily convertible—the alarm of the solvent merchants and bankers will be stayed. But if securities, really good and usually convertible, are refused by the Bank, the alarm will not abate, the other loans made will fail in obtaining their end, and the panic will become worse and worse.

    Furthermore, Jerome Powell is the most capable, level-headed and honest public servant in the US – and possibly the only one at high levels. You should have faith in him.

    • Replies: @Daniel H
  5. Yahya K. says:

    OT: President Trump just announced that he’s directed the U.S. Department of Energy to purchase crude oil for the Strategic Petroleum Reserve. The move was made in an effort to assist U.S. energy producers, which have been battered this week amid an oil price war between OPEC and Russia.

    This is an incredibly good move by Trump. Hydrocarbons are going to get scarcer and more expensive over the long run. World demand for oil is increasing, and supply is not infinite. Purchasing and storing large quarantines of oil for future use is the prudent and strategic thing to do. However, like most of his good decisions, he seems to have stumbled into it by accident. He’s doing it because he wants to save his oil company donors’ short term profits. Its a good decision nonetheless – probably the most important one he’s taken thus far.

    Furthermore, for the US to achieve true energy independence, they need to have a large store of oil, not just drill every last ounce out of the ground. Charlie Munger, the wisest living person of our age, had this to say about the topic:

    At a recent conference he explains:

    If energy independence was such a good thing, let’s just imagine that we go back to 1930 or something like that and we were hell bent to have total energy independence from all the foreigners. And we just drill and use every technique we can and we produce our hydrocarbon reserves which are absolutely certain to be limited.

    Well, by now have way less in reserve and are way less energy independent. In trying to get energy independence we would have destroyed our safety stock of oil within our own borders.

    Oil and gas are absolutely certain to become incredibly short and very high priced. And of course the United States has a problem and China has a worse problem. And China has the correct solution. Imported oil is not your enemy it’s your friend.

    Every barrel that you use up that comes from somebody else is (one less) barrel of your precious oil which you’re going to need to feed your people and maintain your civilization.

    And what responsible people do with a Confucius ethos is they suffer now to benefit themselves, their families, and their countrymen later. And the way to do that is to go very slow on producing your own (domestic) oil. You want to produce just enough so that you keep up on all of the technology. And don’t mind at all paying prices that look ruinous for foreign oil. It’s going to get way worse later.

    Every barrel of foreign oil that you use up instead of using up your own — you’re going to eventually realize you were doing the right thing.

    And another good quote:

    Economists are Part of the Problem

    Why are the policy makers in both countries so stupid on this single issue because they are not stupid generally?

    I think that it’s partly the economists who have caused the problem. Because they have this theory that if people react in a free market that it’s much better than any type of government planning but there is a small class of problems where it’s better to think the things through in terms of the basic science and ignore these signals from the market.

    Now if I’m right in this, there are a whole lot of lessons that logically follow: (1) Foreign oil is your friend not your enemy; (2) You want to produce your own assets slow; … (3) The oil in the ground you’re not producing is a national treasure;

    … running out of hydrocarbons is like running out of civilization. All this trade, all these drugs, fertilizers, fungicides, etc. … which China needs to eat with a population so much, they all come from hydrocarbons. And it is not at all clear that there is any substitute.

    When the hydrocarbons are gone, I don’t think the chemists will be able to simply mix up a vat and there will be more hydrocarbons. It’s conceivable, of course, that they could but it’s not the way to bet. I think we should all be quite conservative and we should pay no attention to these silly economics and politicians that tell us to become energy independent.

    Here is another good snippet from the recent Daily Journal annual shareholders meeting (https://junto.investments/worldly-lessons/daily-journal-2020-transcript/):

    When I came to California, we had Petroleum Club, and we had wildcatters. A little like texas. I don’t think we found any new oil to speak of in California in decades. I think it’s dangerous to rely on hydrocarbons for energy. Of course, we’ve got to take more directly from the sun.

    I think that Texas will eventually get to be like California.

    • Replies: @animalogic
  6. HotWater says:

    It should be noted that $1.5 trillion to wall street is the same as $4400 to every man, woman and child in this country (340 million).

    Instead of giving that money to wall street for rampant speculation, provide the $1.5 trillion to Main Street and watch what a bottom led recovery can do.

    If this money is to be given away, give it to the masses of people that don’t have access to wall street’s corrupt game with the Fed. The people who provide the food, energy, water, and goods that support the arrogant elites and in return are debt enserfed.

  7. Some say the “free market” is in itself an illusion. The market operates the way it does because of government regulation, in our case the refusal of government to regulate and tax appropriately those who own and control our economy – which is hardly surprising, because it was on their behalf that the present regime was imposed on the American people way back in 1789.

  8. Yahya K.

    Excellent comments, and I don’t necessarily disagree with you.
    Can we have a civil conversation about this critical topic??

    Yes, Trump was right to protect the US oil industry, but what price is he paying per barrel? Is it above market price?

    The reason I ask is because the US always touts the free market when it works for their industries but abandons it altogether when American companies are hurt. If Trump is paying above-market prices, he is providing a free subsidy to an industry that many Americans oppose for environmental reasons. Should he be allowed to arbitrarily pick the winners and losers according to his own discretion or should congress have a say-so in this matter?

    Besides, Trump might be able to easily resolve this issue by talking to Putin and working out a deal to lift sanctions which (once again) were arbitrarily imposed on Russia in violation of strict WTO rules. These matters should be settled between the two countries so the US does not continue to act unilaterally whenever it chooses.

    • Replies: @Yahya K.
  9. Yahya K.

    As far as Bagehot, I completely agree, “Lend freely to companies with good collateral”, but that’s the sticking point, right? Good collateral….

    As I quoted in the article, Bernanke admitted in sworn testimony that 12 of the 13 biggest banks were busted. Totally insolvent.

    The Fed did not stuff them full of cash in exchange for good collateral, they exchanged mortgage backed garbage that –at the time– had stopped trading in the secondary market because prices were falling so fast, no one knew what they were really worth.

    What should have happened, and what the best economists like Stiglitz and Galbraith recommended, was that Bernanke nationalize the banks, remove management, clean up the bad assets and start over.

    Had Bernanke followed this advice, WE WOULD NOT BE EXPERIENCING THIS CRASH TODAY.

    That’s the important thing, the way they pumped up the banks balance sheets by inflating assets is directly connected to today’s crisis., in fact, it is phase 2 of the GFC.

    So is the Fed exchanging cash for good collateral today in the repo market?

    Well, we don’t know do we. In theory, one can only exchange Triple A rated collateral (USTs or agency MBS) but, if that’s the case, then why is Powell dumping over a trillion in the system when demand has never exceeded $200 billion?

    The only conclusion I can draw is that he plans to use repo as an emergency lending facility that accepts equities (that are currently crashing in value and destroying bank balance sheets) for cash, thus, creating a bottom for stocks and a path to salvation for the banks.

    Anyway, I am not opposed to the Fed acting as lender of last resort to businesses that are simply victims of this terrible outbreak. I only oppose bailouts for crooked, underwater banks who are destroying our country to enrich themselves.

    • Replies: @animalogic
  10. MGM says:

    Yahya K,

    You quoted Bagehot that “to avert panic, central banks should lend early and freely, to solvent firms, against good collateral, and at high rates.” Help me here by sharing a recent example of the FED lending “to a solvent firm (please name a firm), against good collateral (please describe this firm’s good collateral), and at a high interest rate (please quote the interest rate and then explain how this interest rate could reasonably be called ‘high’ in Bagehot’s sense of the term or even in ours)?”

    I believe the author of this piece is decrying the FED’s practice of once again ‘averting’ with risk-free money the ‘panic’ (ie, break up) of the very firms whose unsound practices have left them insolvent and poorly collateralized yet again.

    Thank you so much, Mark

  11. Daniel H says:
    @Yahya K.

    First. That these loans should only be made at a very high rate of interest

    This is not what the Fed is doing. They are practically giving the money away. To offer loans at high rate of interest would likely imperil the reign of the current gang of kleptos who rule the banks. They would be held accountable for steering the ship onto the shoals. Questions would be asked. Investigations commenced. They would be found wanting. They can’t abide this. They would rather forego the loans and destroy the banks than give up their power and wealth.

    • Replies: @animalogic
  12. Yahya K. says:
    @Mike Whitney

    Mike,

    Thank you for the reply.

    Trump didn’t specify what price he would be purchasing at. And no, he shouldn’t be purchasing above market price. In a way, he already is because oil prices jumped 5% after his announcement, before he even started purchasing.

    Clearly he is doing this to prop up the short-term prospects of his oil corporate donors, and maybe even his oil worker voters. And this is where he is wrong. The real strategic value of having large oil reserves is in the long term, when they become scarce and expensive a-la Munger. So purchasing massive quantities at low prices today, and storing them for later should be the idea. Not just trying to push prices up for short-sighted reasons.

  13. @Daniel H

    Good answer.
    And lets not forget that all these Fed shenanigans have been caused by a desperately corrupt financial system.
    What the Fed is doing is keeping this zombie on life support so that it can rise again to cause further havoc.
    Give them the bare minimum (ie a mere breathing space) prior to organising nationalisation of most of the them. Followed by genuine legislative change that would make FDR look like a piker. (yes….dream on)

  14. @Yahya K.

    Interesting.
    I wonder what price the Fed Gov is
    paying ?
    Could it be they’re paying over the market ? Way over ? Is this another stealth bail out ? I don’t know, but past behaviour as a predictor of current behaviour….etc ?

  15. @Mike Whitney

    “What is actually taking place is another multi-trillion dollar bailout that is going to seriously undermine confidence in US Treasuries as a reliable barometer of financial asset value.”
    I found this quote interesting — ie this question of confidence.
    To me the issue revolves around how far the Fed & other Gov institutions can effectively divorce the financial sector from the productive sector.
    Since (at least) 2008 we have seen that such a divorce can be successfully carried out. QE & interest rates have almost become a closed loop. The Fed/Gov pumps in or fails to pump out (ie tax cuts) dollars & this money perculates thru’ ending up in the hands of Co’s, executives, share/bond holders & Oligarchs. These trillions seem to have had little/no affect on inflation, GDP, production, wages or (arguably) real unemployment.
    Closed Loop.
    So, one may wonder how far does the real world economy have to crash before it really affects the “closed loop” or the “confidence” of those within the loop ?

  16. @Svevlad

    It does sound devilish but at the same time even I have the same views. Let the financial system die a horrible death then we can start from scratch.

    If we hit rock bottom, only way to go is up!

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