The Neutered Fed Is Politically Trapped

This is a syndicated repost courtesy of oftwominds-Charles Hugh Smith. To view original, click here. Reposted with permission.

Follow the money. Find the profits!

Liquidity is money. Regardless of where in the world that money originates, eventually it flows to and through Wall Street. So if you want to know the direction of the next big moves in stocks and bonds, just follow the money. Lee Adler's Liquidity Trader tracks and shows you the monetary forces that drive markets, like the daily real time Federal Withholding taxes shown in this chart. Follow the money. Find the profits! Try it for 90 days, risk free!

Everyone now knows that the only meaningful goal of Fed policy is propping up the world’s greatest credit-asset bubble.
In this era of fake news and deep-fake digital recordings and images, it’s important to use unedited images. With this firmly in mind, here is an unedited photo of Federal Reserve Chair Jay Powell and former Fed Chairs Janet Yellen and Ben Bernanke from their recent unprecedented appearance on 60 Minutes:
The purpose of the Fed chiefs’ dog-and-pony show was to promote the notion that the Fed really really really (try not to laugh out loud) “cares” about the average American, even though 85% of the $30 trillion in gains generated by the Fed’s policies flowed to the top 10% and roughly two-thirds of the gains flowed to the top few percent.
The bottom 80% got essentially nothing except a drastic reduction in the purchasing power of their stagnating wages. If this is how the Fed “cares” about average Americans, I wonder what they’d do if they chose to impoverish average Americans. Oh wait a minute, they already did.
I’ve covered this in recent essays:
What triggered the unprecedented propaganda-fest of the three Fed monkeys? The realization that the Fed is evil is seeping into public awareness, and the Fed honchos are awakening to the reality I’ve spoken to here many times: the Fed is now constrained politically in terms of how far it can go to bail out the banks and the super-wealthy again.
Speak no evil (Jay Powell), see no evil (Janet Yellen) and hear no evil (“I saved the fortunes of the super-rich, oops I mean the world” Ben Bernanke) were trotted out to deny the Fed is evil, which only confirms that the Fed is in fact evil. Why else line up the Fed Chairs like school kids giving their book reports?
The Fed is now trapped by three dynamics:
1. It has been neutered by the stock market–nobody believes the Fed is “independent” or that it “cares” about anything but the market and the financial aristocracy who own it.
2. It can’t force people to borrow and spend or lenders to lend to poor credit risks.
3. It is finally being recognized as the key driver of widening wealth and income inequality.
Some may claim the December stock market swoon “tutored” the Fed, but it was actually neutered: Fed credibility is a bad joke as everyone now knows the Fed is the stock market’s slave. And since the top 10% own the vast majority of stocks, the Fed is the slave of the financial aristocracy. Everything else is fancy footwork, obfuscation and propaganda.
Everyone now knows that the only meaningful goal of Fed policy is propping up the world’s greatest credit-asset bubble because the Fed has elevated the stock market to the benchmark for the entire economy. Nothing else matters, and oh, by the way, the trillions created out of thin air by the bubble belong to the already wealthy.
As noted in The Coming Crisis the Fed Can’t Fix: Credit Exhaustion, the Fed can’t force households or corporations to further burden themselves with additional debt, nor can it force lenders to give “free money” to borrowers who are guaranteed to default. Rather than possessing godlike powers, the Fed is toothless. The only power it has is to inflate asset bubbles that benefit the few at the expense of the many.
This chart shows the precise effect of Fed policies since 2008: a vast, unprecedented expansion in the wealth and income of the financial aristocracy at the expense of everyone below.
Any questions about why the Fed is politically trapped? How much more of this will the American public be able to stomach before a populist from the left or right or heck, even the center, publicly call out the Fed’s backstopping of the stock market as the driver of soaring wealth-income inequality and demands the Fed be stripped of its power to protect and reward the banks, financiers and the super-wealthy?

My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format.

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
Thank you, Sam F. ($150), for your outrageously generous contribution to this site — I am greatly honored by your steadfast support and readership.
Thank you, Leslie G. ($10/month), for your outrageously generous subscription to this site — I am greatly honored by your support and readership.

Wall Street Examiner Disclosure:Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. I may receive promotional consideration on a contingent basis, when paid subscriptions result. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. No endorsement of third party content is either expressed or implied by posting the content. Do your own due diligence when considering the offerings of information providers.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Don't want to subscribe? Support the Wall Street Examiner and get 1 or more Lee Adler's Liquidity Trader reports each month. Click the button below to see your options.

Become a Patron!