BERNY DOHRMANN WHAT IS REALLY GOING ON OUT THERE

THE FED – THE LARGEST RISK IN THE WORLD

 

The FED has gone where no private Non Government Agency has gone before. During the attack on financial markets and the Fed created and allowed SUPER BUBBLE in Mortgage markets – followed with SUPER CRASH the Fed did not understand and was late to appreciate – the Fed protected its private shareholders who own the Fed ( a private stock firm with a contract from 1900 via an 80 page Congressional act – to the US Government ) – by bailing out the shareholder bad bets. The Fed let Lehman go down as a policy mistake which cost tax payers trillions.

No money was invested as in past depressions in work projects and infrastructure development. 10’s of trillions were invested in bad bet bail out. 5 Trillion of this tax payer bail out is from the Fed buying from their own shareholder members – crap investments these members had acquired – bad bets – in bonds and mortgage securities that were non performing – and holding these crap assets at full value as set by the FED and no outside real market value appraisal.

The GNP of the nation is falling. Consumer spending has been off for months. Inventors are rising against falling retail sales this summer. Mortgages and home sales are hitting a price wall as not enough borrowers can qualify for loans at the higher real estate prices. The American market is stalling and not doing well.

The FED like the star ship enterprise has gone where no financial private “in charge of printing money contractor to a government” has ever gone before – following two decades of absolute failed policy making crashing the USA middle class and economy – to the benefit of a few elite members of its shareholder banks and investment banks who actually own and control the FED- a Fed accountable to no one at all – independence means no accountability to anyone. Ever. No one can over rule a failed Fed policy decision.

Today the Fed has attempted having made the membership – banks and investment banks and the entire world economy, dependent on stimulus. Stimulus means FREE MONEY – for a decade – and stimulating bond and stock prices by buying up crap pools of assets over ten years ( which no Fed had ever done before. ) where the FED balance sheet, built upon debts to the USA tax payer – is now 5 trillion dollars of accumulating the crap their members held the worst investments and removing THAT CRAP from the member balance sheets where the FED held it.

Now the Fed is raising interesting rates when the economy is sinking. GNP for the USA has been down graded twice this year by the IMF to 2.1% for 2017. Third worlds like North Korea are growing at 4% even with sanctions by comparison. China at 5.9 %.

USA growth sucks.

Now the Fed is raising interest where the cost of USA debt rises like a space shuttle launch where zero interest becomes MARKET RATE INTEREST. The Bond Market will react to these rapid changes.

Now the Fed against raising interest rates – that make its shareholder members – banks and investment banks enormous new profits as interest rates rise – seek to at the same time – SELL 5 trillion of their crap back into the markets.

The risk?

Where no Fed has gone before?

  1. The markets will not react to the higher cost of everything – cost of money rising rapidly – while trillions of CRAP are sold back into global markets who may or may not absorb these assets. If they win the market consequence of the risk taking worked well. Fed policy worked and they won.
  2. If the markets do not absorb the NEW FED POLICY in 2017 – the bond and stock markets will be disturbed into the biggest upset since the 2008 crash and FED policy will have failed and possibly pushed the world to SUPER CRASH depression and world war. A likely outcome historically.
  3. Economics are unforgiving for manipulation and errors by policy makers seeking to manipulate economics. No firm is too big to fail or too big to jail…none. If you disregard this premise and manipulate continuation of legal theft the deleveraging later is always far more painful then when met at the gate.

The FED has created the worlds largest SUPER BUBBLE – a global DEBT bubble of 100’s of trillions now in BAD NON PERFORMING FAILED DEBT – that will never not ever be repaid. This SUPER DEBT BUBBLE – is global – peaking in the USA – and will be made so much WORSE as interest rates rise and the bond crap that financed so much of the failed debt will rise in cost to the market while the super bubble super bond bubbles contain so much crap that is non performing the entire house of cards wholes to risk of falling over as the failed POLICY unfolds.

Going where no Fed has gone before has become the LARGEST RISK ON EARTH IN HISTORY due to failed 20 year FED POLICY which is WHY we suggest the failed FED be merged back into the US TREASURY by an emergency act of congress that can be completed in a week for the great good of the American People. The US TREASURY needs to repaid the failed policy of the privately owned FED.

So the FED NEW POLICY will introduce we are selling our 5 trillion of CRAP back not global markets – hoping against hope they will just buy our 5 trillion starting in November and say thanks for helping us now we’ll buy or own crap back noting we have to do so at ever rising interest rates.

WOWIE say the banks and investment banks and sovereign nation funds we just can’t wait to buy this FED CRAP back they off loaded from us at highest prices and highest interest WOWIE WOWIE.

Now if the market fails to buy these tranches over time. The risk is the most significant market disintermediation in modern history since the 1927 Depression SUPER CRASH.

THAT is the RISK from todays FED policy shift.

Do we think this is ill timed and a continuation of the WORST FED Chairperson in the history of the FED – Madamn Yellin – making history for this tarnish on her own watch – YOU BET That is what WE THINK. We can’t tell you how awful and misguided her policies have been. All failed.

Now as the market is becoming fully unstable she adds to the instability and uncertainty at the worst possible time.

 

Berny Dohrmann

Chairman