More Proof: Federal Reserve Lying About Economy

"Perception is reality" is a polite way of saying the human mind is rarely connected to objective truth. More frequently, perception is unreality when humans get their information from so-called trusted sources that are not trustworthy at all. Broken perceptions produce broken economies and societies. As you'll see from this article, the perception of billions of humans is constantly hijacked by self-serving and deceptive politicians, corporations and so-called experts in the mainstream media.

Why Believe Us? In addition to Why is Gini Different? and the importance of Gini's technical platform, one of the most important reasons that the Gini Foundation exists is to inoculate as many humans as possible from the plague of deception that allows politicians and giant corporations to manipulate our economic and political systems today. Many people still don't fully understand why we communicate with so much urgency. They don't understand why they should believe us instead of so-called experts at the Federal Reserve, mainstream economists, mainstream media and government officials. So, in this article, we will break down Federal Reserve Chairman Powell's latest speech to reveal to our readers all the Fed's systematic lies and deceptions and why this matters to every human on Earth today.

The chairman said:

[M]ight the recent productivity slowdown be an artifact of antiquated measurement?

Deception-to-Truth Translation: Everything we have been saying at Gini about the actual condition of the U.S. economy for the past several years is true. Additionally, with the loaded question above, the chairman is now telegraphing the Fed's next big lie: The Fed will soon dramatically change the way the government measures national productivity to make it even easier for politicians to conceal the actual condition of the economy. The last time U.S. politicians made a statistical change of this magnitude was in 1994 when they arbitrarily changed the way unemployment statistics are calculated. The result has been totally bogus unemployment statistics ever since, which we have already illustrated and discussed.

The chairman said:

In August, the Bureau of Labor Statistics (BLS) announced that job gains over the year through March were likely a half-million lower than previously reported.

Deception-to-Truth Translation: Again, this confirms everything we've been saying about the true condition of the U.S. labor force. Additionally, "half-million lower" is a massive adjustment for a quarterly period. Typically, the BLS makes adjustments on the order of a few thousand jobs. To put this into perspective: Over-inflating job growth by 500,000 jobs for a single quarter is like a corporation saying it had quarterly profits of $20 billion, then later adjusting their income statement down to $1 billion, all the while concealing the deeper truth that it didn't have any net income at all. Also keep in mind that this is the BLS' official correction. The actual condition of the U.S. and global labor markets are much worse than any of these lying politicians are acknowledging.

The chairman said:

As monetary policymakers, we closely monitor developments in oil markets because disruptions in these markets have played a role in several U.S. recessions and in the Great Inflation of the 1960s and 1970s.

Deception-to-Truth Translation: Not even close to the truth. The OPEC oil embargo only lasted for five months between October 1973 to March 1974, yet he implies that event caused decades of price inflation before and after the embargo. Reality: Price inflation was already rapidly increasing for years before the OPEC crisis. The most significant real causes of inflation in the 1960s and 1970s was the idiotic Vietnam War that pumped the planet full of newly printed USD and Nixon's termination of the Gold Exchange Standard just before the OPEC crisis, which has given U.S. politicians a green light to destroy the USD ever since.

The chairman said:

Today a higher oil price would still cause dislocations and hardship for many, but with exports and imports nearly balanced, the higher price paid by consumers is roughly offset by higher earnings of workers and firms in the U.S. oil industry.

Deception-to-Truth Translation: Increasing geopolitical turmoil (as Gini has also been predicting) will trigger higher existential prices for 330 million Americans. However, the tiny group of 510,000 workers in the petroleum industry will be fine. Don't worry, nothing to see here.

The chairman said:

The hard-working statisticians creating the official statistics regularly adapt the data sources and methods so that, insofar as possible, the measured data provide accurate indicators of the state of the economy.

Deception-to-Truth Translation: What the chairman's words actually mean:

We, the self-serving politicians that control your government, systematically manipulate and distort the methodologies that we use to analyze the condition of the U.S. economy. Whenever possible, the statistical reports that we present to the American people will be whitewashed and spun with the most positive and meaningless sentences possible. This ensures that the typical American (with no real-world economics education) has no chance to distinguish between our lies and the truth.

The chairman said:

Periods of rapid change present particular challenges, and it can take time for the measurement system to adapt to fully and accurately reflect the changes in the economy.

Deception-to-Truth Translation: Periods of rapid change are already hurting tens of millions of Americans and billions of humans on Earth today . . . and the pain is just beginning. The chairman's words actually mean:

We could tell the truth and acknowledge that the U.S. economy is collapsing because bank capitalism is built on a toxic swamp of lies, but that would force us to confront the giant cannibalistic banks and corporations. That would prevent our friends in Congress and the White House (the people who gave us our Fed jobs) from funding their reelection campaigns. Therefore, we will pretend to not see the socioeconomic catastrophe that is coming, just like we pretended to not see the 2008 crisis. Then, when the next crisis causes the USD to collapse triggering the next Greatest Depression, we will blame OPEC (again), China, Russia, Brexit and "unforeseeable market dynamics". Then, we will deliver more meaningless words to the general public while we scramble to cobble together a new global economic system that concentrates even more wealth and power into the hands of the largest banks and corporations.

The chairman said:

Until recently, the official data showed job gains over the year through March 2019 of about 210,000 a month . . . the currently reported job gains of 157,000 per month on average over the past three months may well be revised somewhat lower . . . even allowing for such a revision, job gains remain above the level required to provide jobs for new entrants to the jobs market over time.

Deception-to-Truth Translation: As illustrated previously, the chairman's statement above is a total lie. The only thing that is true in that statement is: ". . . may well be revised somewhat lower." Yes, downward job growth is guaranteed.

The chairman said:

Our influence on the financial conditions that affect employment and inflation is indirect.

Deception-to-Truth Translation: Another total lie. As the chairman obliquely admits in the very next sentence of his speech below, the Fed fundamentally controls every significant aspect of the fiat economy. Specifically, interest rates determine the price of everything, including loans, credit cards, stocks, bonds, real estate, rents, cars, education, transportation, commodities, food, energy . . . in other words, every aspect of our economy.

The chairman said:

The Federal Reserve sets two overnight interest rates: the interest rate paid on banks' reserve balances and the rate on our reverse repurchase agreements. We use these two administered rates to keep a market-determined rate, the federal funds rate, within a target range set by the FOMC. We rely on financial markets to transmit these rates through a variety of channels to the rates paid by households and businesses—and to financial conditions more broadly.

Deception-to-Truth Translation: The Fed controls prices just as strictly as any communist government. The primary difference is the Fed centralizes the economy through corrupt, centralized, giant commercial banks instead of corrupt, centralized, giant factories. However, giant and corrupt centralized factories already exist today in the form of Google, Amazon, Facebook, etc.; and they are already being used by politicians to centralize many aspects of our economic and political systems today. In the Gini book, we discuss the consequences of the hyper-centralization of banks and corporations.

The chairman said:

In mid-September, an important channel in the transmission process—wholesale funding markets—exhibited unexpectedly intense volatility. Payments to meet corporate tax obligations and to purchase Treasury securities triggered notable liquidity pressures in money markets. Overnight interest rates spiked, and the effective federal funds rate briefly moved above the FOMC's target range. To counter these pressures, we began conducting temporary open market operations.

Deception-to-Truth Translation: Here's what the chairman's words mean in order of decreasing double-speak: "Temporary open market operations" = "quantitative easing" = "debt monetization" = "printing money out of thin air". A massive liquidity crunch in the repo money market is precisely what triggered the 2008 financial crisis. These events don't magically appear out of nowhere; they are the symptoms of a rotting, systemically corrupt economy. Why would a central bank need to print more money to resolve "liquidity pressures in money markets" if record stock market performance, record unemployment, and "best economy ever" comments from politicians were accurate reflections of economic reality? Answer: They're all lies and deceptions, as we've been saying for years.

The chairman said:

As we indicated in our March statement on balance sheet normalization, at some point, we will begin increasing our securities holdings to maintain an appropriate level of reserves. That time is now upon us.

Deception-to-Truth Translation: Even the mainstream financial news media is finally waking up. As recently as the beginning of 2019, the Fed said balance sheet reductions and quantitative tightening were on "autopilot" for the foreseeable future because the so-called "economic recovery" has been so successful, which is also a big lie. What many people don't realize is the Fed never liquidated the toxic assets that it acquired in the 2008 crisis. With the most recent round of quantitative easing this week, the Fed's balance sheet is nearly $4 trillion again. That's close to the all-time highest level, but the current slow-burning crisis hasn't even ignited yet. When it does, the Fed will have no liquidity at all, which means it will print trillions more USD to try to prop up all the huge bubbles throughout our economy today. That will accelerate the USD's descent into the Fiat Currency Graveyard.

To put the chart above and the most recent round of Fed money printing into perspective: For the entire ~100-year period between the unholy birth of the Fed in 1913 until the 2008 financial crisis, the Fed only accumulated $800 billion on its balance sheet. Over the past couple weeks alone, the Fed has accumulated hundreds of billions USD and is on track to add $400 billion more to its balance sheet by the end of 2019. (It will likely be more than that.) That's 50% of the Fed's entire 100-year balance sheet in a matter of weeks.

The chairman said:

I want to emphasize that growth of our balance sheet for reserve management purposes should in no way be confused with the large-scale asset purchase programs that we deployed after the financial crisis.

Deception-to-Truth Translation: More lies. There's an old adage in the banking world that's expressed in many ways, but most succinctly: "If a bank has to preemptively say it's OK, then it's probably not OK." The chairman's comment about "large-scale asset purchase programs" is double-speak for "printing money out of thin air". Contrary to the chairman's blatant lies all throughout this speech, "printing money" is exactly what they are doing again right now.

Our goal in monetary policy is to promote maximum employment and stable prices, which we interpret as inflation running closely around our symmetric 2 percent objective.

Deception-to-Truth Translation: More deceptions: "symmetric 2 percent objective" is an entirely fabricated concept with absolutely no meaning in economics, but it's becoming fashionable for central banks to use this phrase over the past few years to create a false pretense of normalcy. Why do they do this? Here's why: Since the official (fake) average inflation rate over the past few years has been below their target 2% rate, a "symmetric 2 percent objective" means they will add the difference between the average rate over the past few years to the current inflation target to perversely compensate for the lower inflation in the past (as if lower inflation is a bad thing). In other words, "symmetric" is more double-speak, which means the Fed is expecting higher inflation soon because they're printing more money.

The chairman said:

At present, the jobs and inflation pictures are favorable. Many indicators show a historically strong labor market, with solid job gains, the unemployment rate at half-century lows, and rising prime-age labor force participation.

Deception-to-Truth Translation: More lies. The real unemployment rate is already at Great Depression levels (as already illustrated ) and the real inflation rate in all the markets that actually matter to real humans (rents, education, healthcare, food, transportation, etc.) is about five times higher than the bogus government CPI statistics, as the chart below illustrates.

The chairman said:

Wages are rising, especially for those with lower-paying jobs.

Deception-to-Truth Translation: More lies and half-truths. There has not been any meaningful increase in real median wages for decades. In fact, after adjusting for real inflation, median real wages have been falling for many years.

The chairman said:

Growth around much of the world has weakened over the past year and a half, and uncertainties around trade, Brexit, and other issues pose risks to the outlook. As those factors have evolved, my colleagues and I have shifted our views about appropriate monetary policy toward a lower path for the federal funds rate and have lowered its target range by 50 basis points.

Deception-to-Truth Translation: The chairman is already blaming everything else on Earth except our politicians' own broken policies and our rotting economy's own systemic dysfunction. Given that former Fed Chairman Bernanke said the economy was totally fine after the economy was already in recession and the day before Lehman Brothers collapsed, Chairman Powell's statement above is pretty riveting. For those who need a double-speak-to-English translation, this is what the chairman's statement above actually means:

I have front-loaded this speech with a torrent of meaningless words to put you to sleep so that nobody can decipher what I'm about to say. I'm revealing my vaguely intelligible concerns about the economy now for two reasons: (1) I want history books to be kinder to me than they were to my predecessor; and (2) I don't want to spook the financial markets and ignite the inevitable economic collapse before Trump's reelection. So, here we go: My fellow Americans, you're screwed. Have a nice day.

The Bottom Line. If you remember nothing else from this article, please remember this: Everything you see and hear from incumbent politicians, central bankers, giant corporations and the mainstream financial news media about the U.S. unemployment rate, the inflation rate, the stock market, bond market, the economy and the health of the global banking system is either a total lie or a half-truth.

"Nothing to See Here." If they can manipulate your perception of reality to keep you focused on the Kardashians, zombie consumerism, the latest soap opera in Hollywood, the latest partisan scandal in Washington, D.C. . . . then they can prevent you from seeing how your wealth, your economic freedom and your political liberty are being destroyed like a slow-burning frog in a frying pan . . . slowly . . . one . . . day . . . at . . . a . . . time . . . the . . . American . . . people . . . are . . . frying.

Now you know why the Gini Foundation needs to exist. Please share this article if you want us to continue shining the light of truth and building decentralized monetary and community governance systems. This is the only way to solve the problems of systemic corruption and the hyper-concentration of wealth and power that are plaguing our planet today.

---