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Global market data

Cryptocurrencies: 5,999
Markets: 542
Marketcap: $ 398.20 B
24h Vol: $ 60.41 B
BTC Dominance: 61.33%

[ZEROHEDGE] How To Tackle The Depression Head On

Zero Hedge

How To Tackle The Depression Head On

Tyler Durden

Sun, 09/20/2020 – 18:20

Authored by MN Gordon via EconomicPrism.com,

I want to see people get money.”

– Donald J. Trump, U.S. President, September 17, 2020

“Now is not the time to worry about shrinking the deficit or shrinking the Fed balance sheet.”

– Steven Mnuchin, U.S. Secretary of the Treasury, September 14, 2020

Money for the People

The real viral contagion that has infected the American populace is not an illness of the body.  It’s something far worse than COVID-19.  The American populace is suffering from an illness of the mind.

The general malady, as we diagnose it, is the unwavering belief that the government has an endless supply of free money, and the expectation that everyone, except the stinking rich, has claim to it.  Why pursue self-reliance and independence when a series of stimulus acts promises the more abundant life?  This viral contagion’s really ripped through the population in 2020.

For example, just a year ago, the American populace thought they could all live off the forced philanthropy of their neighbors.  That to pay Paul you had to first rob Peter.  The CARES Act proved to Boobus americanus that, without a shadow of a doubt, there’s free ‘money for the people’ in Washington.  Sí se puede!

This week the Congress did its part to further the greatest show on earth.  The people want stimulus.  Congress intends to get to them, in good time.

Of course, the need to sprinkle the Country with printing press money was already a foregone conclusion.  There was no discussion of the wisdom of not having a stimulus bill.  The debate at hand was centered on how much.

Crazy Nancy wants $3.4 trillion.  Senate Republicans want $500 billion.  Something called the House Problem Solvers Caucus wants $2 trillion.

President Trump wants Republicans to “go for the much higher numbers.”  His rationale: “it all comes back to the USA anyway (one way or another!).”

Extreme Intervention

There are only 12 days left in the U.S. 2020 fiscal year.  The budget deficit’s already well over $3 trillion – more than double the previous $1.4 trillion record deficit set in 2009.  With a little luck, the March to Common Ground stimulus agreement will not be reached.

Fiscal year 2020 finances are a disaster.  Why start FY 2021 with another massive stimulus bill?  What good would it do?  The longer Congress dithers the better.

In the meantime, the Federal Reserve’s fully committed to extreme intervention in financial markets.  By this, the Fed promises to keep credit cheap and abundant forever.

On Wednesday, following a two day Federal Open Market Committee (FOMC) meeting, the Fed released new projections showing the federal funds rate would remain near zero through 2023.  The Fed, via quantitative easing (QE) also promised to buy more Treasuries and mortgage-backed securities; at least $120 billion per month.

We’ll have to wait several weeks for the FOMC meeting minutes to confirm.  But we presume there was no discussion of the wisdom of ending QE, reducing the Fed’s balance sheet, and raising the federal funds rate.  Such contrary measures are off the table until at least 2024.

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