Reprinted from hartmannreport.com
In addition to an economy held together with the baling-wire of Fed stimulus (that's ending), both the US & the world are facing a wild spectrum of assaults that could have huge economic impacts
The CEO of America's largest bank is worried, and for good reason.
Yesterday the Fed started something it hasn't done for quite a while. It started dumping bonds.
The Fed has been goosing the economy steadily since the Bush Crash of 2008, buying US and corporate bonds with money it creates out of thin air (only the Fed can "print money" like this by simply willing the dollars into existence).
As a result, our economy has been running on high-octane sugar-high stimulus (free money from the Fed, as you can see above) ever since 2008.
Several trillion of that came in the last year of the Trump presidency. While Republicans scream about spending for social needs that might also stimulate the economy, they and Trump were quite happy to see that money from the Fed.
But now the Fed and it's Trump-appointed Republican Chairman, Jerome Powell, are backing off.
Yesterday the Fed started selling those bonds, reversing the process after 14 years and now sucking money out. Instead of stimulating the economy, they're trying to slow it down in the hope that will cool off inflation.
When they receive the money back from those sales they'll simply drop it into the same Schrà ¶dinger's Cat-box from which it came: it'll vanish into the icy, dark depths of fiscal interstellar space, never to be seen again. What the Fed creates, the Fed can dissolve.
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