The End Game
The Federal Reserve has cut interest rates 100 basis points (1%) to the range of 0%-.25% for the Federal Funds Rate and is printing $700 billion, “over coming months.”[1]
$500 billion is meant for buying US treasuries and $200 is meant for mortgages.
“The effects of the coronavirus will weigh on economic activity in the near term and pose risks to the economic outlook. In light of these developments, the Committee decided to lower the target range for the federal funds rate to 0 to 1/4 percent.”
[…]
To support the smooth functioning of markets for Treasury securities and agency mortgage-backed securities that are central to the flow of credit to households and businesses, over coming months the Committee will increase its holdings of Treasury securities by at least $500 billion and its holdings of agency mortgage-backed securities by at least $200 billion. The Committee will also reinvest all principal payments from the Federal Reserve's holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities.”[2]
This follows a 50 basis point rate cut on March 3rd and a $1.5 trillion stimulus over the past week on March 12th-13th.[3][4]
They’ll print because the only other option is the bursting of their stock and bond bubbles. Hyperinflation is the end game because you can’t fix supply side shortages with more liquidity.[5]
“The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.” -Former Federal Reserve Chairman Alan Greenspan, Meet the Press, August 7, 2011.
[2]https://www.federalreserve.gov/newsevents/pressreleases/monetary20200315a.htm
[3]https://www.hamiltonmobley.com/blog/5zs9y5c9h9swjmer70vp6emq9n0pc9
[4]https://www.hamiltonmobley.com/blog/g16m2k3xa0ggswu0bxcruvubfvxhme
[5]https://www.hamiltonmobley.com/blog/w1bu4xaw0gc9k8bciwt58o4bstrejx
