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If there is anything Wall Street banks crave is relief. Primarily relief from the potential for failure and, next, relief from holding much, if any, equity capital. These banks like their capital tiny and their profits huge. Losses should be socialized. After all, we want the ATMs to keep spitting out cash.
Article by Doug French from Mises.
The SLR will be allowed to expire at the end of this month before most of us knew what it was—”supplementary leverage ratio.” When covid hit the fan last March, as the WSJ explains, “The ratio measures capital—funds that banks raise from investors, earn through profits and use to absorb losses—as a percentage of loans and other assets. Without the exclusion, Treasurys and deposits count as assets [not equity].”
No SLR means less leverage and lower profits for the big banks. But, the Federal Reserve must be careful, the yield on the US ten-year note has exploded to 1.72 percent.
Not everyone would see it this way, however, Larry McDonald, who publishes the Bear Traps Report, told Ed Harrison on Real Vision, over the “last 10 years, just about everything they’ve [The Fed] done from a monetary point of view has been deflationary.”
He continued, “The problem is there’s 64 trillion of GDP outside the United States, 20 trillion in and the amount of global debt on the planet Earth is denominated in dollars, especially in EM [emerging markets] countries, it’s at least 13 trillion, 15 trillion bucks.”
Sixty percent of global trade is in dollars.
You may think, rates are still very low, however, McDonald explained, “a 50 basis point move today in yields relative to 10 years ago wipes out literally the entire budget of the marines, the navy and the army. In other words, because there’s so much debt today relative to 10, 15 years ago, a small debt, a small move in yields, 50 basis points in yields today is equivalent to 2% 15 years ago.”
Build your own med-kit by filling it with various Med Packs of your choosing. You know what you need.
Oh, that is a problem. Plus, the world is awash in dollar-denominated debt. McDonald continued, “[B]ecause of the amount of duration risk, so all these pensions, you’ve had literally close to 110 trillion, 120 trillion of bonds on the planet Earth is below, say, 1.75%. You just have a ton of pension bonds, a ton of wealth that a 50 basis points, 1% move up in yields, number one, it bankrupts the US in terms of your budget right now.”
Bankruptcy? “70% of the budget in the United States is entitlements and interest, so you just can’t afford a big move up in yields there,” McDonald said. “Then on the global side, you will blow up pensions around the world because so much wealth is in lower yielding bonds.”
So what’s a Fed to do? Christopher Whalen tweeted today, “Yikes … Tapering is next folks.” Or is it? McDonald makes the point that with the $1.9 trillion rescue bill starting to hit bank accounts and possibly more coming in the name of infrastructure, “[t]hat’s why the central bank gets asset purchases from the Fed, the certainty of that is so important, because you can’t taper into a $4 trillion bond sale problem. The Fed has to offer more certainty there.”
Fed chairman Powell did not play tough guy this week. He’ll keep his rate at zero until 2023 and no matter what will keep his foot on the monetary gas until employment rates improve. No mention of yield curve control, QE, or operation twist 2.0 was made.
“The serpent in the market, the beast in the market, will push him and push him until they break him again,” says McDonald. “They’ve broken the Fed four or five times since 2013. It’s going to happen again, but just think this time, the Fed is going to be more proactive. If the Fed doesn’t give the serpent enough, doesn’t give that piece in the market enough, they will push and then break the Fed in the next two meetings.”
Banks pressed for an extension of SLC, believing without it banks might buy fewer Treasuries, adding to the upward pressure on bond yields that has rattled markets in recent weeks.
“The banks are sitting on giant stockpiles of cash, U.S. government debt and other safe assets,” writes Andrew Ackerman. “By tweaking how the ratio is calculated last year, the Fed was effectively trying to engineer a swap” with banks lending to consumers and businesses instead of the government. But, bank loans increased only 3.5 percent, the slowest pace in seven years.
The Fed has always had the banks to keep afloat. Now, the solvency of the entire US government rests on Jerome Powell’s shoulders, with no margin for error.
Calories = Survival. Buy 364,720 Calories of delicious food today. Heck, buy two.
Error is what the Fed specializes in.
Most “Conservative” News Outlets Are on the Big Tech Teat
Not long ago, conservative media was not beholden to anyone. Today, most sites are stuck on the Big Tech gravy train.
I’ll keep this short. The rise of Pandemic Panic Theater, massive voter fraud, and other “taboo” topics have neutered a majority of conservative news sites. You’ll notice they are very careful about what topics they tackle. Sure, they’ll attack Critical Race Theory, Antifa, and the Biden-Harris regime, but you won’t see them going after George Soros, Bill Gates, the World Economic Forum, or the Deep State, among others.
The reason is simple. They are beholden to Big Tech, and Big Tech doesn’t allow certain topics to be discussed or they’ll cut you off. Far too many conservative news outlets rely on Google, Facebook, and Twitter for the bulk of their traffic. They depend on big checks from Google ads to keep the sites running. I don’t necessarily hold it against them. We all do what we need to do to survive. I just wish more would do like we have, which is to cut out Big Tech altogether.
We don’t get Google checks. We don’t have Facebook or Twitter buttons on our stories. We don’t have a YouTube Channel (banned), an Instagram profile (never made one), or a TikTok (no thanks, CCP). We’re not perfect, but we’re doing everything we can to not owe anything to anyone… other than our readers. We owe YOU the truth. We owe YOU the facts that others won’t reveal about topics that others won’t tackle. And we owe America, this great land that allows us to take hold of these opportunities.
Like I said, I don’t hold other conservative sites under too much scrutiny over their choices. It’s easy for people to point fingers when we’re not the ones paying their bills or supporting their families. I just wish there were more who would make the bold move. Today, only a handful of other major conservative news outlets have broken free from the Big Tech teat. Of course, we need help.
The best way you can help us grow and continue to bring proper news and opinions to the people is by donating. We appreciate everything, whether a dollar or $10,000. Anything brings us closer to a point of stability when we can hire writers, editors, and support staff to make the America First message louder. Our Giving Fuel page makes it easy to donate one-time or monthly. Alternatively, you can donate through PayPal or Bitcoin as well. Bitcoin: 3A1ELVhGgrwrypwTJhPwnaTVGmuqyQrMB8
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We are also building partnerships with great conservative sites like The Liberty Daily and The Epoch Times to advance the message as loudly as possible, and we’re always looking for others with which to partner.
Some of our content is spread across multiple sites. Other pieces of content are unique. We write most of what we post but we also draw from those willing to allow us to share their quality articles, videos, and podcasts. We collect the best content from fellow conservative sites that give us permission to republish them. We’re not ego-driven; I’d much rather post a properly attributed story written by experts like Dr. Joseph Mercola or Natural News than rewrite it like so many outlets like to do. We’re not here to take credit. We’re here to spread the truth.
While donations are the best way to help, you can also support us by buying through our sponsors:
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- MyPatriotSupply: Stock up on long-term food, survival gear, and other things that you’ll need just in case things don’t recover and we keep heading towards apocalypse.
We know we could make a lot more money if we sold out like so many “conservative” publications out there. You won’t find Google ads on our site for a reason. Yes, they’re lucrative, but I don’t like getting paid by minions of Satan (I don’t like Google very much if you couldn’t tell).
Time is short. As the world spirals towards The Great Reset, the need for truthful journalism has never been greater. But in these times, we need as many conservative media voices as possible. Please help keep NOQ Report and the other sites in the network going. Our promise is this: We will never sell out America. If that means we’re going to struggle for a while or even indefinitely, so be it. Integrity first. Truth first. America first.
Thank you and God Bless,
JD Rucker
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