The Doomsday Prophet

Easing Rules, Money Supply, Record-Low Interest Rates

Photo of job seekers by Getty Images
Image: Job Seekers by Mario Tama/Getty Images
Editorial Cartoon by Mauldin
Editorial Cartoon by Mauldin
Jerome Powell 2018 – present
Janet Yellin 2014–2018
Ben Bernanke 2006-2014
Alan Greenspan 1987–2006

Published: March 3, 2022

Consider This:

COVID-19 created this inflation. Ending COVID will curb it.

Yes, inflation is lasting longer than expected and it is taking a bigger bite out of our paychecks than expected. The cost of gas had started to go down last week but Putin decided our costs should go up (a large chunk of his wealth is derived from oil and gas). The cost of climate change will be more than we can imagine and not just in dollars and cents. The lives of people and animals will be sacrificed to the world’s greed.

But first, the newest inflation fire (pun intended) is described in the book “Learning to Live With Fire” which was released by the United States Forest Service.

The explosion caused by Putin, see my commentary here, may make all of this moot. He wants ALL of the former slave states of the USSR back in his control. NATO cannot and will not let that happen! Who blinks first? This is another gift from Trump. As much as he and other Republicans try to blame Biden, he (and they) were the ones that weakened NATO, blew kisses at Putin, and let Putin think we were weak and disorganized. I am not surprised that Trump didn’t care to learn about the spirit and strength of the American people — just those of a criminal bent.

“By all accounts,” Senator Joseph Manchin has tweeted, “the threat posed by record inflation to the American people is not “transitory” and is instead of getting worse.”

Consider this:

Harvard economist Jason Furman explained to Trevor Noah on his TV program that the Build Back Better plan is not as inflationary as Manchin claims. The benefits won’t kick in until AFTER the budgetary period is over, explains University of Chicago economist Austan Goolsbee.

This article does an excellent job of breaking down the budget of Build Back Better and explaining the impact on inflation.

Federal Reserve Chair Jerome Powell has been ducking charges that he act and do something to reduce inflation because families have been running hard into this wall.

Consider this:

“Corporate Profits Drive 60% of Inflation Increases”

I think businesses have manufactured some of the fear so they can keep prices high to regain some of the profit lost during last year’s pandemic shutdowns. Matt Stoller has an excellent article on his Substack Blog. He writes that he is convinced there is more to the story promulgated by Larry Summers, former Secretary of the Treasury from 1999 to 2001. He also served as Director of the National Economic Council from 2009 to 2010. I have listened to Mr. Summers. It is my opinion that he is not neutral but is influenced by Republican theories. Maybe there is “more to the story?”

Matt Stoller proclaims: Higher prices aren’t just a result of supply chain chaos or government spending. Inflation is being driven by the pricing power and higher profits of corporations, costing $2,126 per American.

Consider this:

What do we common folk know about inflation?

If you read Politico’s Magazine History Section you may be familiar with this article. I will give full credit at the end of this article.

Disclaimer: I am not an economist. I don’t write like one. I am going to tackle a few articles on inflation because that is what I do. If I don’t know much about a subject I will investigate and write about it. It doesn’t lend itself to articles that go viral but that is not why I write. I do think every voting citizen should have a vague idea of how our leaders determine monetary policy. Or maybe, the President wakes up in the morning and says, “Self, I’m going to raise interest rates today.”

Let’s find out.

Photo by Brock Wegner on Unsplash

Consider the man Thomas Hoenig:

Thomas Hoenig, FOMC, governor Federal Reserve
Thomas Hoenig, FOMC, a governor Federal Reserve

This is a link to a speech he gave on January 5, 2011, in which he discusses his views of monetary policy and enlightens his listeners on his reasons for his frequent dissents.

We will be looking at the “Great Inflation.” In 2006 or so we start running into the “Great Moderation.” Did you feel the shake, rumble, and roll? The next phase is well known. “The Great Recession” destroyed a lot of hopes, dreams, and lives.

This article is Federal Reserve History specifically an essay on the Great Recession and its aftermath and is a valuable read. Each industry has a language of its own. Doctors have medical lingo, automotive mechanics have theirs. You will have the opportunity to read bankers’ lingo and decipher what they were saying. A scary image to me was the increase of household mortgage debt from 61% in 1998 to 97% in 2006. It is not a good idea to look at one segment of the economy also because a push in one place results in a pull in another. But when I was ordering inventory for a restaurant it gave me pause to order more than 10% to 20% from one vendor.

Mr. Hoenig retired at the age of 75. I understand this to mean he was dedicated, passionately believed in what he was doing. I think he only put down a project when he considered circumstances settled, or he was told to move on. I don’t have an answer as to the last part.

Consider America and its Finances circa 1970

In the seventies, as I recall, times were tough. A lot of major layoffs. If I remember correctly (yes, I am that old) the term “right-sizing” came into vogue to hide the cruelness of what the action really meant. I spent the first part of that time in the U.S. Army so I was suffering from a major reckoning of my finances.

Gas prices went up, and up, and up. We were driving a Pontiac Starchief at the time (a huge boat akin to Cadillacs). Another name for the model was “Gas Hog.” We were driving back and forth from Alabama to Northern Minnesota. On a trip home for Christmas, we ran out of gas in Wisconsin. I poured it all over my hands trying to get it into the funnel. The result was that I froze my fingers. That made my typist’s job pretty tough when we got back to Alabama.

Mr. Hoenig lived with the very dark side of inflation. We had long gas lines and massive price hikes at the grocery store. He was a bank examiner and, as such, had to close banks that were on shaky ground.

“He spent the seventies watching as the Fed’s policies helped pile on the inflationary tinder” that would soon ignite. These policies were known as “easy money”, meaning the Fed kept interest rates so low borrowing was cheap and easy to get.” “The Fed had kept interest rates so low during the sixties that they were effectively negative, which might be called “super-easy money policy.”

The Seventies became known as the ‘Great Inflation.”

This is called “too many dollars chasing too few goods.” This drives up prices on the things Americans were trying to buy because demand is high.

This is similar to today. When the economy was allowed to re-open, many people had unspent dollars from the government assistance payments they had received. They had no way to spend the money on vacations. There was no gas cost going to work while locked up in the house. In the end, we were happy to start rockin’ again. There weren’t enough goods on the shelves to satisfy Americas’ appetites. Business owners ordered heavily and saw, in my opinion, an opportunity to recoup some of the losses they suffered in the prior 18 months of the pandemic and pumped up their normal margins.

The store shelves are now empty due to pandemic logistics, the assistance money has been spent, and the owners have no incentive to back off prices yet.

Does that sound about right?

Consider Today’s Landscape

I noted that as a bank examiner, Thomas Hoenig had to clean up the messes of failed banks. In 2010, he was president of the Federal Reserve regional bank in Kansas City. As such, he had a seat on the Federal Reserve’s Board of Governors. He was also on the FOMC (Federal Open Market Committee)rotating basis,

The next meeting is on March 15, 2022, and probably will examine a few major themes.

Inflation

The Fed’s policy is to maintain inflation at 2% in the long run. January’s inflation rate was 7.5%, the highest since 1982.

How high will it raise rates?

It is almost a foregone conclusion that it will raise rates. The real question is by how much? Experts think it will raise rates by half a percentage point. That will be the biggest increase since 2000. So Fed watchers are in a “hold-your-breath mode.

Number of rate increases in 2022

Some economists are forecasting 1.5%. They will try to tackle inflation without slowing growth.

Shrinking the bond portfolio

The Fed used its bond program to ease the effects of the pandemic. It had the desired effect of stimulating the economy but now have to decide whether to sell the securities or just let them mature.

What is your thinking on these decisions to be made?

Thomas Hoenig had opportunities to vote against the easy money policies of the eighties and nineties and he took them. That wasn’t popular in banking circles. But he had seen the effects of easy money and the resulting pain during the seventies.

Voting against other Fed Reserve Governors was not popular, but he stayed the course.

The Fed was intervening in the economy to an amazing degree. This was new territory. The Fed was keeping money “too easy for too long.”

A big thing to remember is that when the Fed opens the spigot, reactions take a while to set in as it filters through different markets. It was increasing the monetary supply by printing more and more money.

These money policies caused an increase in the cost of bread and butter. As a bank examiner, he knew there were more problems than that.

“The money also drives up the price of assets, like stocks, bonds, and real estate.”

During the seventies, low-interest rates fueled demand for assets, which eventually inflated asset bubbles across the Midwest, including heavy farming states.” States with extensively planted crops like Kansas and Nebraska and energy-producing Oklahoma were particularly affected. When asset prices skyrocket, the dreaded asset bubbles are created.

Farmers talked themselves into borrowing cheap money to buy more land. Sales of more land boosted demand for land and pushed up land prices. The assumption was higher land prices would cool off demand.

Consider what happened in Real Life

Rising land prices enticed bankers to believe that this collateral would continue to increase in value so farmers would have an easier time repaying the loans.

This is the loop that spins your head. Asset bubbles churn out loops that get stronger with each spin and drive up the cost of assets.

These scenarios, with the reality of today’s higher asset prices, drove up the value of tomorrow’s asset prices even higher, increasing the spin to run faster and faster.

These bubbles didn’t stay out on the farm. Assets in oil and natural gas did the same. “Rising oil prices and cheap debt enticed oil companies to borrow money and drill more wells.”

Banks built new side businesses dedicated to risky energy loans and their mineral leases. Commercial real estate did the same spin. Everybody was happy except consumers who had to pay the higher prices. WIN “Whip Inflation Now” was the slogan under President Gerald Ford (1974 to 1977). Chairman Paul Volcker raised interest rates from 10% in 1979 to 20% in 1981, the highest they’ve ever been.

Economic havoc resulted! The unemployment rate rose to 10% and homeowner’s mortgages went to 17% and in some places even higher. Volcker realized the banking system would not escape the destabilization of the entire financial system.

Hoenig was right and had argued all of these points. He was ignored.

Today we are reaping the benefits and living in the world he warned of.

Consider Now

The Fed is again in a vise.

Inflation is rising than the Fed believed it would just a few months ago.

Now, add in Putin, with his war against Ukraine has blown all projections to pieces. Higher prices for gas, goods, and cars are fueled by the Fed’s earlier unprecedented volume of money printing.

Between 2008 and 2014 the Federal Reserve printed more than $3.5 trillion in crisp bills. This is almost TRIPLE the amount of money created in its first 95 years! Three centuries’ worth of growth in the money supply was crammed into a few years!

Money poured through the veins everywhere — people, banks, and the entire financial system. Stocks, corporate debt, and commercial real estate bonds plowed prices up through all the markets.

Since 2010 Hoenig consistently voted against the plans. He pitted himself against the Fed chair, “golden boy” Ben Bernanke who had formulated the ambitious plans. He also forced their execution.

Hoenig was the one negative voice. He retired in 2011 with a tarnished reputation. The future turned out as he warned. He warned and he warned — about one thing: coming inflation.

Consider the Consequences

Hoenig wasn’t concerned only with inflation. The record, available 5 years after the activities, shows he worried the Fed was on a risky path that would deepen income equality, stoke asset bubbles, and enrich big banks over everyone else.

He had seen it before. The Fed was getting sucked into a money-printing sinkhole. In 2004 Fed economist Edward Nelson wrote “the most likely cause of inflation during the seventies was due to the Fed keeping its foot on the money printing pedal called “monetary policy neglect.”

Another economist wrote a 2,100-page history of the central bank. The author, Allen Meltzer was not as kind as Nelson. “The Great Inflation”, he wrote “resulted from policy choices that placed more weight on maintaining high or full employment than on preventing or reducing inflation. For much of the period political pressures and popular opinion were reflected in the choices.”

The Fed shifted money from one part of the economy to another. The shifts encouraged speculation and shifted money from the poor to the rich since the rich own most of the assets.

I hope you enjoyed learning how other people in high and rich places decide how you should live. I hope and pray the war doesn’t become the conflagration WWII did.

Thank you for stopping.

Craig

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By Craig Martineau Writer

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2022 AD: This is What a Triumvirate of Evil Looks Like — UPDATED 2/25/22

Putin, Xi Xingping, Trump

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Craig Martineau

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I AM GOING TO UPDATE EVERY DAY WITH COMMENTARY

flag of Ukraine prior to 2.24.22 upside down flag is a signal for distress
FlagofUkraine prior to 2/24/22. Flag upside down signals distress
territory of Ukraine prior to 2.24.22
The territory of Ukraine prior to 2.24.22
flag or Ukraine when oit was a Soviet slave state
Flag of Ukraine when it was a Soviet slave state
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UPDATE: Thursday 2/25/2022

Russia is hammering the capital city of Kyiv. Will they collapse & as the oild city is turned into rubble?

Now I have another name to call REPUBLICANS:

DEFINITION OF SEDITION
Sedition-Definition
SEDITION PUNISHMENT
Sedition-Punishment

Dan Rather offered a prayer: “ I pray for all those in harm’s way. I pray for all who desperately yearn for peace. I pray for some way out with a minimal loss of life. I pray for hope, and the wisdom of our leaders in a time of peril.”

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I assume that everyone is aware of the most recent devious action of the tyrant Putin.

One thought struck me. Biden has nullified the common Putin (Russia) ruse. They always lie. He starts with the assumption that they are lying and demands compliance before granting the negotiating point. This is a change from at least the last 50 years. Bravo!

Lies

It is not just the Russians!

Republicans are lying their noses off. Their noses are so long they must be running up their neighbors’ butts.

Pinnochio’s Nose
Look familiar?

5 Key Traits of Trump Supporters

Per Psychology Today by Bobby Azarian Ph.D.

Key Points of Trump Supporters
Psychology Today Image: December 31st, 2017
  1. Authoritarianism

2. Social Dominance Orientation

3. Prejudice

4. Intergroup Contact

5. Relative Orientation

I believe that Putin has bigger goals than Ukraine. He blew past eastern Ukraine everyone is talking about. He is almost through Ukraine in less than a day.

I believe he is re-grouping the USSR states that he so bitterly complained were stolen from Russia.

The U.S. has to fly in troops to match up heavy equipment that was prepositioned in NATO countries after 2014.

Thanks for stopping.

Craig

My graphic signature

“Where have all the flowers gone”?

 

July 19,2018

Have you been following all the news and the news shows?

Trump is increasingly erratic. Saying one thing and then disputing it a few minutes later.

The more pressure Special Counsel Mueller piles on the more people come out of the woodwork bringing more salacious information with them.

If my math is correct the SCORE to date: 5 Trump associates have pleaded guilty, 1 has two trials upcoming, 13 Russians have been implicated in 2016 Election Meddling, 12 Russians have been indicted for meddling, 1 Russian spy is in jail.

tattered flag flying with eagle Google Images

I just want to lay down a few bricks on this path. Total so far: 32 people and over 190 charges.

Trump said he received nothing from Russia. Eric stated that they got all their money from Russia.

Which leads to this point.

All of his life Trump never paid cash for anything.

He billed himself as the ‘King of Debt’.

So how did he get the cash to buy up all the golf courses such as Turnberry in Scotland and pay $81 million to upgrade it?

According to MSNBC a reporter, Tim O’Brien, who has seen Trump’s tax returns says the information in the returns may shed light on Trump’s relationship with Putin.

Fast-paced developments of last week.

A Russian, Maria Butina was arrested on charges of being a Russian Spy and failing to register as a foreign agent.

She was involved with Paul Erickson, 56 years old and a member of the NRA.

She was a hirling of Alexander Torshin a Russian Oligarch, a director of  Russia’s Central Bank and Putin’s close friend.

Maria Butina was heavily involved in the Russian NRA and used NRA ‘language’ to become heavily involved in the American NRA.

She was arrested just after she had packed for a trip with her new, younger male companion.

The NRA just admitted accepting money from 23 Russia-linked donors.

However, they only admitted to $2,500. Which is a laughable sum since she owns

Torshin, a Putin close friend, and a formal Russian politician has also been a ‘life member’ of the NRA since 2012.

As deputy head of the central bank in Russia, he is being investigated for illegally funneling money to help Trump.

He was named last Friday as one of the 12 Russian Conspirators.

Chris Christie the erstwhile head of the Transition Team for Trump said that Jared Kushner ‘deserves’ to be investigated for his involvement in the Russia meetings.

Regarding the Trump Tower meeting, at least two secret meetings were held in the Tower.

This time it as the Crown Prince of Saudi Arabia and George Nader representing the United Arab Emirates looking to curry favor.

The meeting also included, in addition to Trump Jr. and Israeli expert, Joel Zamel a ‘social media manipulator’.

Who arranged this meeting?

The second in the Tower, Erik Prince, an informal Trump advisor.

Oh yes, he is the brother to Betsy DeVos. Does that name seem familiar?

George Nader?

His success at arranging the second Trump Tower meeting catapulted him into Trumpworld and he had further meetings with Trump’s inner circle, including Kushner, Flynn, and Bannon.

This first meeting was on August 3, 2016, after Trump locked up the nomination.

A second meeting was held on December 15, 2016.

The Crown Prince did not notify the Obama administration in advance of this meeting which set off all kinds of “ red blinking lights” as current Director of National Intelligence Dan Coats described in his briefing on Monday.

In January 2018 Mr. Nader returned to the US to travel to Mar-a-Lago. Instead, he was met by a team from the FBI who served him with search warrants and a grand jury subpoena.

Another meeting in the Seychelles Island was arranged by Nader as well.

You may have heard about Erik Prince in another context.

He is a Navy Seal. His company, Blackwater, was a private defense contractor in Iraq and has been under many investigations.

IT MUST BE GETTING HOT! Trump just said that he holds Putin responsible for election interference. Hmmmm.

Fire in wood chips Raquel Raclette 264225 Unsplash!

Rep Eric Swalwell D-California just notified the MSNBC  audience that the House of Representative deleted $330 million from the fund to secure ballot machines for the coming election.

He also called on members of Congress to protect the Mueller Russia investigation.

Former FBI Agent in Charge Frank Montoya Jr. explains what would have happened if any other US official besides the president backed is Russian counterpart the way Trump backed Putin in Helsinki.

Former US Ambassador to Russia Michael McFaul said the Helinski Finland summit was ‘a tragic day’ for US diplomacy.

I heard that Trump finally realized how badly he had screwed up when he heard the statement by Newt Gingrich on Monday afternoon.

Newt said “Trump’s must clarify his statements in Helsinki on our intelligence system and Putin. It is the most serious mistake of his presidency and must be corrected immediately.”

It is now Wednesday, and Trump may have finally closed up his mouth and read the notes written for him. ‘Putin did meddle’

Now that begs the question. Upon hearing Trumps newest ‘spin’ what does Putin think and do?

Is he going to level his guns on Putin’s Poodle? And ask for his money back?

Are we ever going to get a hint of what Trump and Putin discussed during that two-hour private meeting?

Now for the newest aggravations that drive me up a wall.

Trump said Putin offered for Mueller to bring his investigation to Moscow and question the 12 indicted Russians.

Trump seems willing to let Putin’s Russians question US citizens.

37% of Americans polled approve of Trump’s handling of Russia.

68% of Republicans polled approve of Trump’s handling of Russia.

I wonder how many of those are former military personnel who took an oath to uphold the Constitution?

I wonder how many of those are farmers in the Midwest who have lost their income due to Trump’s Tariffs (now that China is buying soybeans from Russia and Brazil).

This is another puzzlement that I am willing to let be chalked up to Trump’s stupidity. By forcing China to buy soybeans from Russian they are putting cash in Putin’s pockets.

Well, maybe it’s part of THE PLAN.

Remember that Republicans are the ones who believe a college education is detrimental to the United States.

Republicans are pro-life but anti-life for children that have already been born.

Republicans are the ones that are racist against any color of skin other than white.

Is the White House on Fire? CNN
Is the White House on Fire?

What is the value of Nato to the US.?

Admiral Stavridis recounted how the nations of NATO have come to the aid of the United States after 9/11 and in the wars in Afghanistan.

Trump gave an interview to Tucker Carlson.

Again, their stupidity arises to the level of amazement.

The United States would not have to go to the aid of Montenegro because their scenario has Montenegro starting a conflict.

Again, they both flippantly ignored that NATO came to aid of the US.

God Bless America with Flag and Eagle Google Images
Just for a minute, let us talk about Pence.

The sycophant that nuzzles Trump’s backside with his nose could not praise Trump enough about the success of Helsinki.

I have often wondered if Pence is that dumb or if he indeed is joined at the hip to Trump.

I read an article several months ago that Trump got wind of Pence setting up his own campaign with the halls of the White House. Who knows?

I know that every day going forward more cracks will open in the facade of mud that Trump built.

I hope that some strong medicine will be delivered before Trump’s Supreme Court nominee comes up for a vote.

https://www.theguardian.com/us-news/2018/jul/17/trump-idiot-google-images-search
Given the facts:

Trump’s true colors have been exposed. Not only is he a Fascist Dictator in the making but he is a TRAITOR!

Trump and Putin Morphed into a single image. Time Magazine Cover 7/21/18

Trump and Putin Morphed. Time Magazine Cover 7.21.18

His minions can be identified by remarks similar to this:

Christian TV host Rick Williams claims Rachel Maddow will lead a bloody coup during which Trump will be decapitated on the White House lawn.

Follow “The Intolerants”

Just a few minutes ago, 3 senior cybersecurity experts have announced their retirement. Now the Russians will have an open door to our family jewels. link

David Brooks, Conservative columnist wrote the Republican Party “has become more of a white ethnic party, ethnic nationalist party,” adding that if the party becomes “aligned with bigotry in some overt way or in any way, you can’t be a Republican and try to be a decent person and be a part of it.”

Thanks for stopping by.

I really had to clear my mind after this post.

One of the best ways for me is to look at outstanding images, created by exceptional photographers.

It especially applies to images that can only be described as awe-inspiring.

 

Images by NASA GEOS 16 SATELLITE

Storm SuperCell Google Images
Storm SuperCell

ANDRAMEDA GALAXY MATTHEW T RUSSELL

 

ACTUAL SHOOTING STAR THIS IS NOT A METEORITIE

Sorry if my posts about the man destroying America Annoy you. Google Images

We the people. Google Images
We the people.

A Christian Cross Google Images

Take What You Want God Said to Man and Pay for it MS Publisher Craig
Spanish Proverb

God Bless America with Flag and Eagle Google Images

Thanks for Stopping by.

Craig

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