A Recession Is Coming… And the Fed Can’t Stop It

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Is the Fed ready for the next recession?

The answer is no.

Extensive research shows that it takes between 300 and 500 basis points of interest rate cuts by the Fed to pull the U.S. economy out of a recession. (One basis point is 1/100th of 1 percentage point, so 500 basis points of rate reduction means the Fed would have to cut rates 5 percentage points.)

Right now the Fed’s target rate for fed funds, the so-called “policy rate,” is 1.75%. How do you cut rates 3–5% when you’re starting at 1.75%? You can’t.

Schäuble Warns of Coming Economic Crisis

 

In his farewell interview for the Financial Times, Federal Minister of Finance Wolfgang Schäuble warned of a new global financial crisis predicated upon the Quantity of Money theory that the central banks had pumped trillions of dollars into the financial system that is creating a risk of “new bubbles”.  Indeed, many just do not comprehend what is going on and are blaming the new highs in share markets on concerns about the increased risks from the accumulation of more and more liquidity and the growth of public and private debt.

One big, fat, ugly bubble is about to burst… and Donald Trump will be wrongly blamed for it

 

(Natural News) Editor’s note: Donald Trump is officially the president of the United States. But what happens now could change everything…in sudden, unexpected ways.

Today, we’re featuring another important essay from Crisis Investing editor Nick Giambruno on this topic. On Wednesday, Nick said Trump could go down as the worst president…but it won’t be his fault. Today, he gives more reasons why Trump is destined to fail…and what you should be watching closely today.

(Article by  By Nick Giambruno, editor, Crisis Investing from Caseyresearch.com)

The establishment is setting up Donald Trump.

The mainstream media hates him. Hollywood hates him. The “Intellectual Yet Idiot” academia class hates him.

The CIA hates him. So does the rest of the Deep State, or the permanently entrenched “national security” bureaucracy.

They did everything possible to stop Trump from taking office. None of it worked. They fired all of their bullets, but he still wouldn’t go down.

Of course, the Deep State could still try to assassinate Trump. It’s obvious the possibility has crossed his mind. He’s taken the unusual step of supplementing his Secret Service protection with loyal private security.

The Termination of Cash Approaching Rapidly

The hunt for money is intensifying with the aid of banks no less. India was the balloon. They simply canceled the current with no notice and imposed a 90% tax on anyone holding the high denomination notes. This is how the world governments operate. The first bail-in was done in Cyprus. We were even contacted by members of the government trying to push back against the EU. We provided the solution, but the government did what the EU wanted because this was a test. If they got away with it in Cyprus, then the “bail-in” would become a contagion. The politicians lied, as usual, and said that policy would NEVER be applied in Europe. It is now standard around the world. We warned, Cyprus, then Greece – who would be next.

Negative Interest Rates Destroying the World Economy

 

QUESTION: Mr. Armstrong, I think I am starting to see the light you have been shining. Negative interest rates really are completely insane. I also now see that months after you wrote about central banks were trapped, others are not just starting to entertain the idea. Is this distinct difference in your views that eventually become adopted with time because you were a hedge fund manager?

Opinion: How negative interest rates take money out of your pocket

Negative interest rates, which central banks in several countries have implemented as a way to spur economic growth, is a radical move. In the last of a three-part series, ‘Negative Thinking,’ commentator Satyajit Das examines this policy and its risks.

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Low rates are supposed to encourage debt-financed consumption and investment, feeding a virtuous cycle of expansion. They also increase wealth, encouraging spending. Low rates and abundant liquidity should drive inflation.

Instead, these policies since 2008 have brought the global economy a precarious stability at best, and have not created economic growth or inflation.

This Looks Like the 2008 Stock Market Crash All Over Again

U.S. markets logged their fifth straight week of gains last week, pushing the Dow and S&P 500 into positive territory for the first time in 2016. But despite those gains, the fears of a stock market crash are still very real.

In fact, Money Morning Capital Wave Strategist Shah Gilani says this rally reminds him of the one that preceded the 2008 stock market crash…

Leaked Morgan Stanley slide shows bankers want to move quickly toward a “cashless economy” to enact NIRP

¹⁶ It also forced all people, great and small, rich and poor, free and slave, to receive a mark on their right hands or on their foreheads, ¹⁷ so that they could not buy or sell unless they had the mark, which is the name of the beast or the number of its name.

Revelation 13:16, 17

 

This leak through Zerohedge came on the heels of recent Op-ed’s by both Bloomberg and Financial Times, which urged for the banning of cash, a movement documented fully here by TRUNEWS.

JPM: “Things Have Gotten Out Of Control: People Have More Confidence In Gold Than In Paper Money”

Please see the source for the video.

 

Following the biggest one-day surge in the price of gold since 2009, it is understandable that suddenly everyone who until recently was predicting the price of gold in the triple digits, or laughably explaining why “gold is doomed” wants to talk about the “pet rock.” As we showed earlier, already Goldman and Bank of America have opined with new and upwardly mobile “price targets”, while the scramble to obtain gold in a world drowning not only in negative rates but soon, cash bans, has already been unleashed.

Why Is Germany Eliminating Paper Money?

 

 

Getting rid of paper money may help fight terrorism and even help prop up the banks—but is there a more sinister reason for these new financial controls?

Germany is considering abolishing the €500 note and introducing a €5,000 (us$5,600) limit on cash transactions. It is part of a plan proposed by Chancellor Angela Merkel’s partners in the Social Democratic Party to cut off terrorist financing in Europe. Banning the bills will supposedly help make people safer. In reality, it will do the exact opposite.

German Deputy Finance Minister Michael Meister told Deutsche Welle on February 3 that Germany would push these reforms at the European level. “Since money laundering and terrorism financing are cross-border threats,” it makes sense to adopt a European Union-wide “solution,” he said. But “if a European solution isn’t possible, Germany will move ahead on its own” (emphasis added throughout).

Germany Unveils “Cash Controls” Push: Ban Transactions Over €5,000, €500 Euro Note

We’ve documented the cash ban calls on a number of occasions including, most recently, those that emanated from DNB, Norway’s largest bank where executive Trond Bentestuen said that although “there is approximately 50 billion kroner in circulation, the Norges Bank can only account for 40 percent of its use.”

That, Bentestuen figures, “means that 60 percent of money usage is outside of any control.” “We believe,” he continues, “that is due to under-the-table money and laundering.”

DNB goes on to say that after identifying “many dangers and disadvantages” associated with cash, the bank has “concluded that it should be phased out.”

Japan adopts negative interest rate in bid to spur growth

Japanese savers faced the shock of negative interest rates on their bank balances on Friday, as the Bank of Japan’s monetary policy committee took the unprecedented move to get the nation spending.

Five of the nine members of the BOJ Policy Board were in favor of the rate of minus 0.1 percent. The news followed a two-day meeting by the board.

War On Cash Escalates: China Readies Digital Currency, IMF Says “Extremely Beneficial”

Remember when Bitcoin and its digital currency cohorts were slammed by authorities and written off by the elite as worthless? Well now, as the war on cash escalates, officials from The IMF to China are seeing the opportunity to control the world’s money through virtual (cash-less) currencies. Just as we warned most recently here, state wealth control is the goal and, as Bloomberg reports, The PBOC is targeting an early rollout of China’s own digital currency to “boost control of money” and none other than The IMF’s Christine Lagarde added that “virtual currencies are extremely beneficial.”

By way of background, as we explained previously, What exactly does a “war on cash” mean?

It means governments are limiting the use of cash and a variety of official-mouthpiece economists are calling for the outright abolition of cash. Authorities are both restricting the amount of cash that can be withdrawn from banks, and limiting what can be purchased with cash.

These limits are broadly called “capital controls.”

Why Now?

Europe Prepares for the Next Assault in the War on Cash

Europe is perhaps the most centrally controlled political system in the world: a place in which political and economic policies range from socialist (the public sector accounts for 30% of “free market” German’s employment) to extremely socialist (the public sector accounts for 56% of France’s employment).

As such, Europe is where a Central Banker can implement the most insane policy and get away with it.

Bank Of England Economist Calls For Cash Ban, Urges Negative Rates

Just three short years ago, Bank of England chief economist Andy Haldane appeared a lone voice of sanity in a world fanatically-religious Keynesian-esque worshippers. Admissions in 2013 (on blowing bubbles) and 2014 (on Too Big To Fail “problems from hell”) also gave us pause that maybe someone in charge of central planning might actually do something to return the world to some semblance of rational ‘free’ markets. We were wrong! Haldane appears to have fully transitioned to the dark side, as The Telegraph reports, he made the case for the “radical” option of supporting the economy with negative interest rates, and even suggested that cash could have to be abolished.