Federal Reserve Invents a ‘Green’ Mandate, Bank Credit Stays Choked Off
Dec. 28, 2020 (EIRNS)—The Federal Reserve’s joining Prince Charles’s “Great Reset” was announced by Jerome Powell to the Senate on Dec. 15 when he told them the Federal Reserve Board of Governors had suddenly voted unanimously on Dec. 7 to join the Network of Central Banks and Supervisors for Greening the Financial System. Powell patently lied:
“The public will expect that we do figure out what are the implications of climate change for financial stability, and that we do put policies in place. The broad response to climate change on the part of society really needs to be set by elected representatives—that’s you. We see implications of climate change for the job that you’ve given us, and that’s what we’re working on.”
“The job that you’ve given us” has absolutely nothing to do with climate change, implications or otherwise: It is supposed to be, according to the Humphrey-Hawkins Act of 1978, to pursue full employment and moderate interest rates. It has since been unable to do either, “failing” (charitably put) to foresee or avoid the 1987 stock market crash, the 1990-91 deep recession, the 1999-2000 financial crashes and recession, the 2007-08 global financial crisis or the Sept.-October 2019 interbank market failure; “failing” to maintain employment levels during those periods; and having contributed directly to the decline in productive business investment and productive employment since the 1980s. Powell’s imaginary “job that you’ve given us” is a direct imperial slap in the face to the Senate: The “job” is demanded by the British monarch (though not yet king) Prince Charles.
Meanwhile the Fed’s quantitative easing has accelerated again. Its balance sheet, after staying at the $7.0-7.1 trillion level for months, has risen quickly during December to approximately $7.4 trillion, chasing the European Central Bank’s $8 trillion level and bailing out the same London- and Wall Street-centered universal banking giants. Having drawn down its loans, central bank liquidity swaps, and other assets such as gold and silver holdings to a low level, the Fed is continuing to pull in securities from the Wall Street and London-centered banks at $120 billion/month, including once again large amounts of mortgage-backed securities.
The popular question—Is this an attempt to force U.S. Treasury bond rates down to zero to let the Treasury “refinance”?—is not the one that matters. That is the disappearance of bank credit in the gasping U.S. economy.
In the U.S. banking system, deposits and assets have each risen by an astonishing $2.9 trillion in just one year of Federal Reserve pumping, with deposits now at just over $16 trillion, assets just over $20 trillion; while total bank credit outstanding is just $15 trillion, and loans and leases have fallen by $500 billion since May to just $10.37 trillion. The real economy is being starved as the Fed pounds huge quantities of new bank reserves into the Wall Street and City of London giants.