The Fed is reopening its most controversial and despised crisis-era bailout facility, the Primary Dealer Credit Facility. The Wall Street Journal describes the PDCF as "an overnight loan facility for primary dealers (that) provides round-the-clock backup source of funding to banks." The WSJ's description grossly understates the facility's real purpose which is to transfer the... Read More

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... Read More

Last week, the Federal Reserve responded to Wall Street’s coronavirus panic with an “emergency” interest rate cut. This emergency cut failed to revive the stock market, leading to predictions that the Fed will again cut rates later this month. More rate cuts would drive interest rates to near, or even below, zero. Lowering interest rates... Read More

Last week's violent gyrations in the stock market are the result of a tug-of-war between two well-represented groups of investors. One group thinks the Coronavirus will severely impact the global economy pushing stocks further into the red, while the other group believes the Fed will intervene in the market once more and save the day.... Read More

Imagine if stock prices decoupled from the real economy and steadily rose on the back of central bank policy. Imagine if a decade of historic low rates, perennially-optimistic forward guidance and trillions of dollars in bond purchases triggered the longest rally in Wall Street history. Imagine if investors shrugged off bad news, (flagging GDP, poor... Read More

The 1978 Humphrey-Hawkins Act requires the Federal Reserve to “promote” stable prices and full employment. Of course, the Fed’s steady erosion of the dollar’s purchasing power has made prices anything but stable, while the boom-and-bust cycle created by the Fed ensures that periods of low unemployment will not last for long. Despite the difficulties the... Read More

There's a chance that the coronavirus will be contained in the United States and that fewer people will be infected than in China or Iran. But there's also a possibility that the highly-contagious virus will spread and that there will be sporadic outbreaks across the country. If this latter scenario takes place, then the ructions... Read More

When investors buy stocks, stock prices rise. That is the immutable law of the market. It doesn't matter if the money comes from big financial institutions, Mom and Pop day-traders or Central Banks. The same rule applies: Buy more stocks and prices go higher. So when the Federal Reserve launched its recent "repo rescue" operation,... Read More

The bickering over impeachment did not stop the president and Congress from coming together last week to avert a government shutdown by passing a 1.4 trillion dollar spending package. The bipartisan agreement has something for everyone — a 22 billion dollars increase to bring total spending on militarism to 738 billion dollars, and a 27... Read More

Lost in the media’s obsession with the impeachment circus last week was Federal Reserve Chairman Jerome Powell’s testimony on the state of the economy before the Joint Economic Committee. In his testimony, Chairman Powell warned that when the next recession inevitably occurs, the US Government’s over $23 trillion debt would prevent Congress from increasing spending... Read More

When the New York Federal Reserve began pumping billions of dollars a day into the repurchasing (repo) markets (the market banks use to make short-term loans to each other) in September, they said this would only be necessary for a few weeks. Yet, last Wednesday, almost two months after the Fed’s initial intervention, the New... Read More

Thirty-eight years ago when I was in charge of United States domestic economic policy, the US Treasury and President Reagan believed that the purpose of economic policy was to serve the country, not Wall Street and the banks or the corporations or any of the various organized interest groups. Our idea was that policy could... Read More

Since September 17, the Federal Reserve Bank of New York has pumped billions of dollars into the repurchasing (repo) market, the first such intervention since 2009. The Fed has announced that it will continue to inject as much as 75 billion dollars a day into the repo market until November 4. The repo market provides... Read More

Westerners have been for generations infused with a conviction that a nation’s central bank must, under threat of great ‘moral hazard’, be kept separate and independent of that nation’s government. The reasons are unclear, but since this mythology qualifies as a biblical pronouncement, it is by nature not open to question. The proposition is, of... Read More

Former Federal Reserve official Bill Dudley’s recent op-ed calling for the Federal Reserve to implement policies that will damage President Trump’s reelection campaign states that such action would be unprecedented. Dudley claims the Federal Reserve bases its policies solely on an objective evaluation of economic conditions. This is an example of a so-called noble lie... Read More

The US Constitution never granted the federal government authority to create a central bank. The Founders, having lived through hyperinflation themselves, understood that government should never have a printing press at its disposal. But from the very beginning of America’s founding, the desire for a crony central bank was strong. In fact, two attempts were... Read More

Stocks fell last week following news that the yield curve on Treasury notes had inverted. This means that a short-term Treasury note was paying higher interest rates than long-term Treasury note. An inverted yield curve is widely seen as a sign of an impending recession. Some economic commentators reacted to the inverted yield curve by... Read More

The Federal Reserve, responding to concerns about the economy and the stock market, and perhaps to criticisms by President Trump, recently changed course on interest rates by cutting its “benchmark” rate from 2.25 percent to two percent. President Trump responded to the cut in already historically-low rates by attacking the Fed for not committing to... Read More

After years of being kept in the doldrums by orchestrated short selling described on this website by Roberts and Kranzler, gold has lately moved up sharply reaching $1,510 this morning. The gold price has continued to rise despite the continuing practice of dumping large volumes of naked contracts in the futures market. The gold price... Read More