Central Banks Are Backed Into A Corner

The biggest problem I see is that the M1 and M2 money supply are high but that money isn't going into the economy. But the reason why the money supply is so high is because the big corporations took out low interest loans and parked their money on the side to outlast any down turn. They are just adapting to the new normal and using as less money as they can. In our debt-based system, we require debt to produce money into the economy. Unfortunately lending conditions are tough and people are also paying off credit cards so it is not helping the economy. This is why the Fed wants to Congress to send money directly to people's hand so they can stimulate the economy.

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if the stable genius would have taken the whole pandemic more serious at the start there would have been less lock downs and the economy would have been in better shape. Just look at South Korea

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Summary:
In this video, the speaker discusses the Federal Reserve and the challenges they face, emphasizing that they have been stuck in a corner for over 20 years. The speaker delves into the concept of money printing, economic growth, inflation, and the impact of central banks participating in perpetual money printing. The discussion includes the role of deficit spending, fear of missing out (FOMO) driving market behavior, the potential for currency resets, the significance of cryptocurrency, and the implications of issuing a 50-year bond. The speaker also touches on the limited options available to central banks, such as austerity, default, or continuous spending.

Detailed Article:
The speaker begins by addressing the Federal Reserve and central banks, highlighting a situation where they are seemingly cornered due to their reliance on money printing for economic growth. The speaker suggests that this approach has not been effective for over two decades, as printing money has not led to desired outcomes like stimulating the economy or causing inflation.

A key concept discussed is the Keynesian theory, which involves the government stepping in to replace market demand through deficit spending, essentially translating to money printing. The speaker explains the idea of driving a fear of missing out (FOMO) among market participants to increase the demand for goods and services, subsequently leading to a growing economy. However, the speaker argues that confidence plays a more substantial role than fear in consumer behavior, indicating that uncertainty about the future can result in decreased spending across individuals, companies, and various sectors.

The discussion moves on to the Federal Reserve's current predicament of continuous money printing, with mention of concerns such as hyperinflation and deflation. The speaker challenges the effectiveness of tools like negative interest rates, pointing out that such measures have not yielded the desired results. Moreover, the introduction of central bank digital currencies (CBDCs) is touched upon, highlighting how politicians may utilize them to enforce negative interest rates and control spending through direct account deductions, indicating a concerning future trajectory.

Furthermore, the speaker speculates about the likelihood of currency resets due to widespread money printing by central banks, potentially leading to a unified reset to prevent any one currency from collapsing. Reference is made to Janet Yellen's proposed 50-year bond issuance as a strategic move to safeguard the US dollar as the reserve currency, enhancing its longevity in the global financial system.

The speaker concludes by outlining the limited options available to central banks, including austerity, default, or continuous spending, and emphasizes the challenges and consequences associated with each choice. The looming possibility of diminishing trust in governments and a shift towards investments in equities over bonds due to lack of confidence in governmental stability and economic systems is also discussed. Finally, the speaker hints at an era of dwindling government confidence and investor trust, setting the stage for potential changes in financial preferences and allocations.