Sean Brodrick – Tue 3 Dec, 2019

Just how much power does the Fed have to limit a major market drop?

Sean Brodrick joins me to chat about the stability of the US markets after the recent 2+ month run. Off to a bad start in December it won’t take long for investors to focus on the Fed and ask about the next round of easing. The question is, does the Fed have enough tools to save the markets from any significant decline.

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  1. On December 3, 2019 at 12:19 pm,
    Matthew says:

    The Fed has more power than most people think when it comes to its ability to inflate by debasing the currency and that mismatch between belief and reality is an asset.
    However, when it comes to creating real prosperity, the Fed has far less power than most people think. In fact, it has virtually none since its only tools involve plundering the savings of those who do create real prosperity. In short, it operates at society’s expense.

    “Appear weak when you are strong and strong when you are weak.” – Sun Tzu, The Art of War

    • On December 4, 2019 at 8:42 am,
      Marty says:

      The ESF has the most concealed power, Mnuchin more so than TRUMP

      • On December 4, 2019 at 9:06 am,
        Matthew says:

        Yes, possibly the most concealed power but not the most power. For example, the ESF can intervene all it wants but it does not have the ability to negate the consequences of the Fed’s inflation. Since the Fed answers only to its owners, it has the ultimate power.

  2. On December 3, 2019 at 12:23 pm,
    Matthew says:

    Silver’s 30 week MA has crossed above its 200 week MA for the first time since the summer of 2009 (silver quadrupled within 2 years of that cross).

  3. On December 3, 2019 at 12:55 pm,
    cfs says:

    The treasury should have more direct power than the Fed to stop the fall in stocks,and is without doubt pondering intervention at this point in time.
    However, by historical standards most stocks are over-valued and it may be the decision of the treasuryto wait until valuation is more reasonable.
    My guess is that it depends on the ratio of pro-Trumpers to anti-Trumpers among the elite with power within the treasury.

    • On December 3, 2019 at 1:14 pm,
      Matthew says:

      Neither has any business intervening and the outcome would be the same either way. Luckily, the consequences of the moral hazard that the Fed/gov has created will not be averted. Nominal market values can be propped up through inflation but real values will fall to reflect reality. Remember when a million bucks was a lot of money?
      There remains no free lunch and most people still don’t know it.

  4. On December 3, 2019 at 12:58 pm,
    b says:

    Speaking of the art of war, how about this for a treaty?

    Infinity War: Netanyahu Wants ‘Mutual Defense’ With US; Trump, Graham Eager to Oblige Their Master

    In other words, if Israel decides to start a war with Iran (or China, or Russia, or all of them), it doesn’t have to discuss this with its “ally” first. Israel reserves its right to act unilaterally and America must go along for the ride whether we want to or not.

    Its simply unreal how so few see whats happening.

    • On December 3, 2019 at 1:06 pm,
      cfs says:

      Since Trump has already told Netanyahu that the U.S. will not go to war with Iran, because of potential Russian involvement, that makes your treaty idea, b, as ludicrous as your belief that Israel controls the U.S.

      • On December 3, 2019 at 1:09 pm,
        cfs says:

        Ponder this, b:
        If as you seem to believe, Israel controls the U.S., why is any Treaty ever necessary. Control of the U.S. would give Israel anything it wants or needs…..treaties would be unnecessary.

        • On December 4, 2019 at 9:11 am,
          Matthew says:

          How naive can you be? Great cons (CONFIDENCE scams) always require secrecy.
          Until you allow yourself to look at facts honestly, you really need to excuse yourself from some subjects.

  5. On December 3, 2019 at 1:01 pm,
    cfs says:

    The variables which are being considered by the Treasury without doubt include the pension problem. Since most pension funding is invested in the stock market, and there is already a deficiency in funding, any significant drop in stocks will create insoluble problems, leading to crises in state and local governments.