{"id":58417,"date":"2021-06-28T18:06:40","date_gmt":"2021-06-28T23:06:40","guid":{"rendered":"https:\/\/olduvai.ca\/?p=58417"},"modified":"2021-06-28T18:06:40","modified_gmt":"2021-06-28T23:06:40","slug":"when-expedient-saves-become-permanent-ruin-is-assured","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=58417","title":{"rendered":"When Expedient “Saves” Become Permanent, Ruin Is Assured"},"content":{"rendered":"

When Expedient “Saves” Become Permanent, Ruin Is Assured<\/a><\/h3>\n

The Fed’s “choice” is as illusory as the “wealth” the Fed has created with its perfection of moral hazard.<\/i><\/p>\n

The belief that the Federal Reserve possesses god-like powers and wisdom would be comical if it wasn’t so deeply tragic, for the Fed doesn’t even have a plan, much less wisdom.<\/b>\u00a0All the Fed has is an incoherent jumble of expedient, panic-driven “saves” it cobbled together in the 2008-2009 Global Financial Meltdown that it had made inevitable.<\/p>\n

The irony is the only thing that will still be rich when the whole rotten, corrupt, fragile financial system of illusory stability collapses in a heap of runaway instability.<\/b>\u00a0The irony is that the Fed’s leaky grab-bag of expedient “saves” was not designed to ensure systemic stability, though that was the PR cover story.<\/p>\n

The Fed’s leaky grab-bag of expedient “saves” had only one purpose: save the fat-cats, skimmers, scammers, fraudsters and embezzlers who had gotten rich off the Fed’s cloaked transfer of wealth:<\/b>\u00a0the purpose of all the 2008-2009 extremes was not to impose the discipline required to truly stabilize the financial system; the purpose was to elevate\u00a0moral hazard<\/i>— the separation of risk from the consequences of risk–to unprecedented heights, backstopping every skimmer, scammer, fraudster and embezzler from well-deserved losses as the entire pyramid of fraud collapsed under its own enormous weight of risky bets gone bad.<\/p>\n

To save its cronies from the catastrophic losses that should have been taken by those making the bets, the Fed instituted one expedient “save” after another:<\/b>\u00a0backstopped global banks with $16 trillion, dropped interest rates to zero, eliminated truthful reporting by ending mark-to-market pricing of risk, flooded the financial system with\u00a0free money for financiers<\/i>, all designed to signal that\u00a0the Fed will never let its cronies suffer the consequences of their risky bets<\/i>, i.e. the perfection of moral hazard.<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

When Expedient “Saves” Become Permanent, Ruin Is Assured The Fed’s “choice” is as illusory as the “wealth” the Fed has created with its perfection of moral hazard. The belief that the Federal Reserve possesses god-like powers and wisdom would be comical if it wasn’t so deeply tragic, for the Fed doesn’t even have a plan, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[63,24078,303,1849,431,534,587,3650],"class_list":["post-58417","post","type-post","status-publish","format-standard","hentry","category-economics","tag-banks","tag-charles-hugh-smith-2","tag-fed","tag-financial-markets","tag-interest-rates","tag-monetary-policy","tag-of-two-minds","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/58417","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=58417"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/58417\/revisions"}],"predecessor-version":[{"id":58418,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/58417\/revisions\/58418"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=58417"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=58417"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=58417"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}