Credit manger Zoltan Pozsar with Credit Suisse predicts a bank liquidity crisis caused by a year-end scramble for reserves will cause the Fed to start a fourth round quantitative easing before year's end.
If the U.S. economy goes into a recession the Federal Reserve will use quantitative easing, or the monetization of treasury bonds, as a weapon against a monetary slow down.
Low interest rates and quantitative easing should extend the stock market bubble and keep the debt ridden U.S. consumer afloat until after the election. If President Trump obtains an interim trade deal with China, until after the election, this should seal his re-election chances in 2020.
U.S. and China's Central Banks have lost control of their overnight repo rates and are both are expected to devalue their currencies and flood their banking system with fiat money to avoid banking collapse.
If the Fed wants to maintain the appearance that it controls interest rates, it will have no choice but to print the cash needed to buy up enough paper to keep short term rates from continually spiking to 5-10%
On Wednesday the Fed cut the federal discount rate .25 percent. However, experts believe quantitative easing is next.
With the Federal Reserve cutting interest rates and possibly returning to quantitative easing, gold prices have been rising. Many investors are considering gold mining stocks as an opportunity to reap the benefits of increased gold prices.
This editorial is a response to an August 17 editorial, in the local Curry Coastal Pilot newspaper, which blamed global warming on and an increase of carbon dioxide from burning fossil fuels.
Demand for gold increases as gold replaces U.S. dollar as the reserve currency. As the Federal Reserves devalues the dollar the price of gold increases.
The Federal Reserve introduced Quantitative Easing as an emergency measure, but it is now accepted as standard procedure as recession cure.