# Fed insider talks for over 15 minutes..



## BlueShoe (Aug 7, 2010)

...about what happened and what is happening. It's sobering.

http://www.kingworldnews.com/kingwo...ndrew_Huszar_files/Andrew Huszar 8:3:2014.mp3


----------



## BrianAz (Oct 2, 2012)

Thanks for posting that (although the player locked up on me 5 times..not your fault).

I have very little understanding of how Wall St. works and I don't understand the things he spoke about as far as derivatives, hedge funds, and clearing houses. Even without that knowledge it was sobering indeed and reaffirms why I prep.


----------



## BlueShoe (Aug 7, 2010)

This link might be a different player. I thought it was just me who had problems with the site on this machine.
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2014/8/3_Andrew_Huszar.html

Banks were done. The Fed doesn't know what the results will be of the future actions it takes. Prep well, my friends.


----------



## machinist (Jul 4, 2012)

He told a lot about the corner the Fed is in now, but he did it in a very calm voice so it sounded much less sinister than the reality of it. 

The Fed has basically shot its' load. They have gone right to the edge of the credibility of the US dollar's value by doing all that printing to support the banks. That charade will not last forever. The first little bump in the financial road can put the US banks right back where they were in 2008, only they are now in MUCH worse shape. And the Fed can't print another $4.4Trillion without totally undermining the dollar. 

Next time something goes bad, I think it will be all over. I expect the Fed's reaction to a new crisis will be more of the same. I think they will print money until the dollar is completely worthless. Hard to tell what that will look like, because the whole world is in this together. If the dollar fails, other countries will also fail. I believe that mutually assured destruction pact is the only thing allowing the game to go on for this long.

Not a good time to be invested in dollar denominated paper assets.

I think a rough measure of the inflationary impact of the Fed's $2 trillion or so that HAS reached the economy can be found by watching grocery prices since 2008. Think what would happen to grocery prices (and oil prices), if the Fed had to print ANOTHER $4.4 Trillion to prop the banks. And that wouldn't be nearly enough when derivatives begin popping like popcorn. 

Houston, we have a problem....


----------



## BlueShoe (Aug 7, 2010)

Yeah, he casually stated that the Too-Big-To-Fail banks were now 33% bigger. 
How about the drawing back of the curtain suggesting what might be going on with Russia and the Ukraine regarding all this?


----------



## airdrop (Jan 6, 2012)

Don't you just feel the hope in the air boys and girls, yes their taking care of us as we speak. Nothing to see here ,move on


----------



## Dakine (Sep 4, 2012)

machinist said:


> He told a lot about the corner the Fed is in now, but he did it in a very calm voice so it sounded much less sinister than the reality of it.
> 
> The Fed has basically shot its' load. They have gone right to the edge of the credibility of the US dollar's value by doing all that printing to support the banks. That charade will not last forever. The first little bump in the financial road can put the US banks right back where they were in 2008, only they are now in MUCH worse shape. And the Fed can't print another $4.4Trillion without totally undermining the dollar.
> 
> ...


Don't forget the BRICS are fully aware of this and creating a gold backed currency. We're in a real mess.

It's going to get a lot worse before it gets any better.


----------



## Viking (Mar 16, 2009)

Just saw a blurb on Yahoo news header about how the dollar is a good bet, oh really? Keynesian economics is the snake that's swallowing it's tail.


----------



## northstarprepper (Mar 19, 2013)

So, the next big crisis will be the SHTF... Might as well get it over with and start Marching to the nearest FEMA camp. I know they've got my name.


----------



## Dakine (Sep 4, 2012)

Viking said:


> Just saw a blurb on Yahoo news header about how the dollar is a good bet, oh really? Keynesian economics is the snake that's swallowing it's tail.


Given the quality reporting and features at Yahoo, I'm guessing that...

Yahoo news is written by interns and grads with no experience and paid on a scaled based on how many words churned out by the article on everything from 10 uses for pocket lint to 10 movie stars with boob implants that don't hide it... I think Obozo and his advisors truly hope they can change the downward spiral we're in with that hilariously incompetent suggestion of a MyIRA which is just .gov bonds.

They'd like it to provide a cash infusion to help them defer bankruptcy, but these are the same people that thought the young healthy people would flock to obozocare once it was offered which would give them spending capital for all the baby boomers who are now retiring and leaving the workforce and employer paid health care plans.

if it weren't so horrifying to contemplate what they're doing to our retirements, and the future livelihoods of our families it would be hilarious... instead it's a slow motion train wreck that is consuming everything in it's path and the passengers are for the most part... trapped.

YES WE CAN!!! (raise the debt from 10 to 19 TRILLION in only 1.5 terms) and they're not even finished yet


----------



## BlueShoe (Aug 7, 2010)

He suggests that the Fed is going to go to Congress to ask for assets and in the process it might lose it's independent status. The banksters are not going to allow that. I think it's more likely that we could count on war or one of BillS' doomsday events to change the course of history.


----------



## squerly (Aug 17, 2012)

Didn't listen to it yet as my bandwidth is limited but I'll toss in my .02 based on the responses so far. The dollar can be saved but it'll take someone with exceptional leadership who can look beyond the status quo, someone outside from outside the normal self-serving political pool. (This is not a plug but Dr. Ben Carson comes to mind.)


 Provide a taxation system (both business and individual alike) that promotes growth and allows industry to return to America. (The kind of tax system exceeds the scope of this post but something like a flat tax comes to mind.) People will go back to work, the drain on social services will decline and the tax coffers will grow.
 Freeze new government spending/growth until the debt is paid off and then eliminate any new spending that can't be paid for.
 Start the systematic elimination of outdated or unnecessary departments. (An example would be to change the IRS from an enforcement department into a management department.) Here's a list, see how many you think we can do without...

Suddenly, the dollar will look like a pretty damn good investment, as will America in general.


----------



## nightwing (Jul 26, 2014)

Viking said:


> Just saw a blurb on Yahoo news header about how the dollar is a good bet, oh really? Keynesian economics is the snake that's swallowing it's tail.


You sure that is not Sam Kenneson the dead comedian :gaah:

because our economy is a joke.


----------



## LincTex (Apr 1, 2011)

squerly said:


> Didn't listen to it yet as my bandwidth is limited


Just search the web for : "Andrew Huszar interview"

http://blogs.marketwatch.com/capito...ndrew-huszar-the-ex-fed-insider-who-hates-qe/

http://www.cnbc.com/id/101192690#.

http://business.time.com/2013/11/13...inks-quantitative-easing-has-been-a-disaster/

This Former Fed Official Thinks Quantitative Easing Has Been a Disaster
By Christopher Matthews 
@crobmatthewsNov. 13, 20131 Comment

Taper Tantrums: 3 Myths About Quantitative Easing
Is There a Reckoning Coming Thanks to Quantitative Easing?
Too Much Candy: A Plain-and-Simple Way to Understand Quantitative Easing, Part 3

Follow @TIMEBusiness

Quantitative easing-the Federal Reserve's program of buying long term government and mortgage debt known as QE-is one of the more controversial policies practiced today. While there is evidence that it has successfully lowered interest rates, and therefore put more money in the pockets of creditworthy businesses and Americans, opponents of the policy have argued that the risks associated with the policy far outweigh the benefits

Andrew Huszar, a senior fellow at Rutgers Business School and former manager of the Fed's $1.25 trillion agency mortgage-backed security purchase program, has now thrown his hat in the ring with those critics, penning an article in the Wall Street Journal in which he apologized for his role in the policy and called for its reversal.

TIME spoke with Huszar and asked him to explain and defend this point of view. The interview has been edited for length and clarity.

TIME: Why did you write the op-ed?
Huszar: The reason I wrote this piece is because I believe America had a significant wake up call with the financial crisis, yet five years later the country's economy looks eerily similar to the way it did then. My belief is that the Fed is a significant reason why we haven't reformed, and I wanted to try to start a conversation.

TIME: You argue that QE helps Wall Street banks but not the real economy. How does QE help Wall Street banks?
Huszar: QE had two goals, but one of them was originally highlighted as the primary goal by Fed Chairman Ben Bernanke: to make credit more accessible to more Americans. QE aimed to achieve this through lowering the wholesale cost for banks to make loans, and we were actually successful at doing this. For example, my program - which was buying mortgage backed securities - drove down the cost for banks to make mortgage loans. But the banks weren't fully passing on the benefits to their customers - they were pocketing a lot of the extra profit.

In addition, though we lowered the cost for banks to make mortgages, the banks didn't actually start making more mortgages. If you look at the first day of trading in my program which was in January of 2009, and you look at the last day of trading fifteen months later, the overall amount of U.S. mortgage lending had actually decreased despite the fact that the Fed had spent $1.25 trillion trying to stimulate mortgage lending. In fact, if you look as late as 2012, U.S. mortgage lending was at a fifteen year low. The banks weren't making more loans. Instead, they were often investing their extra money into securities to take advantage of the rising tide of asset prices in the market.

The third point to make is that the Fed was actually buying and continues to buy all of these mortgage bonds through the network of primary dealers - banks. The commissions that the banks were generating off these purchases were also significant.

TIME: But there are surely benefits to the real economy, and not just Wall Street, from QE. For instance, many regular people were able to refinance their mortgages and spend less each month on housing. Now that money can be spent elsewhere, correct?
Huszar: Of course. You can't spend $4 trillion in the financial markets and not see benefits. First of all I should say that while I feel the Fed has lost perspective, I believe the people working there are smart, well-intentioned people. There is a public policy argument to be made for this program. I just don't believe it flies, and whatever benefit you get from this program is being outweighed dramatically by the negative distortions that QE is creating. Pushing down interest rates to help people refinance is going to help. Unfortunately, when banks aren't lending, there is no transmission mechanism to help most people. Another argument for the program is that by raising asset prices the Fed is generating wealth and stimulating economic activity. But, for the amount of money that has been spent and the amount of risk the Fed is taking for itself and for the U.S. economy, it's just not worth it.

TIME: Let's talk about the risks because if you admit that there are some benefits to program, however small they are, it would make sense to continue it unless there are negative side effects that outweigh the benefits. What are those negative effects?
Huszar: I think one thing we're seeing is that even the gains that are being made in the markets may be unsustainable; that the Fed is creating new bubbles. You saw Larry Fink of BlackRock making that argument recently, and there are many people who are now expressing concern about this. Also, QE has required the Fed to expand its interaction with the US economy dramatically. From a monetary policy perspective, the Fed used to only determine short term interest rates. Now it's experimenting and expanding the way in which it interacts with the US economy. The potential for the Fed to distort the financial markets and the overall U.S. economy - the potential to ultimately get things wrong - is unprecedented and immense.

For example, there's the question of how the Fed unwinds its unprecedented operational expansion. This is an unwinding that will have to be invented on the fly, and it could have huge downside risks for the US economy. Note that even the Fed's suggestion of a minor taper this summer led to the beginning of a substantial stock market sell off. What if the Fed ever actually has to sell off bonds? You can imagine far greater risk and volatility in the markets. The longer the Fed waits, the greater the risk gets.

Also, the Federal Reserve now owns more or less 10% of the overall U.S. housing market, and the equivalent of 30% of the U.S. federal government debt. There may be some minor benefit to QE, but you can't look at those figures and not think that such heavy government involvement in the economy doesn't lead to serious distortions.

TIME: One of the arguments you've made is that the Fed, through pumping up the stock market, is masking the problems in the economy and helping Congress avoid taking steps that would help the economy on a fundamental level. But isn't this backwards? Shouldn't an independent Fed behave the way it sees best, and then we can criticize and hold Congress accountable for its mistakes?
Huszar: Conceptually, I'd like to agree with you. Unfortunately, Congress only seems to be able to act during crises. And I'm not suggesting the Fed shouldn't have acted during the original financial crisis, but I do think that it went way too far. After the Fed saw that QE didn't work as it had intended, it should have stopped what it was doing. Probably after QE1 would have been the right time. Perhaps there would have been more volatility in the market afterwards, but that could have put pressure on Congress to pursue more fundamental change in the U.S. banking sector and to try to enhance the overall conditions for U.S. economic growth like taking steps to improve competitiveness, infrastructure, education, among other things.

TIME: If the Fed decides tomorrow to begin to wind down this program, wouldn't the effect be higher interest rates and lower asset values? How will this help the economy?
Huszar: I agree with you. We could have some pain associated with Fed tapering. But each day that QE continues, that potential pain increases because we're distorting markets even more. We need to get to a point where we can get the size and the role of the Fed and the size and role of Wall Street back to where they belong. We have a structurally unsound economy where the conditions for growth are diminishing. If you look at global competitiveness of the U.S. economy, five years ago we were first in the world, today we're seventh. If you look at our education system, forty years ago we were first in the world in college graduation rates, and today we're fourteenth. You have a real decay in the conditions for growth in this country. There's a question as to how much the government should be trying to stimulate economic activity and how much the government should be laying the groundwork for that activity to happen on its own. I worked in the government for nine years, and I believe it has an important role to play, but I also believe that the overall perspective is now entirely off.


----------



## LincTex (Apr 1, 2011)

I wonder if this thread should be moved to a different section... maybe not


----------



## Ozarker (Jul 29, 2014)

Ooops, the like goes to the article posts Tex.

Don't hold your breath for Congress to act especially in any matter that requires banks to have higher reserves or restricts the use of funds reducing earnings. Congress already passed the buck on these areas long ago, the ball is in the court of the Treasury (Comptroller of Currency) for national charters and the FDIC for state charters that evaluates risk and sets reserves. The problem is that investment banking should not be in the consumer banking arena.


----------



## Geek999 (Jul 9, 2013)

Congress already acted. The result was Dodd-Frank. I wouldn't look there for solutions.


----------



## BillS (May 30, 2011)

I keep hearing how the Fed can't do anything when the next financial crisis comes. That's not true. They'll print whatever money is necessary to hold things together as long as they can, regardless of what that does to the dollar. The Fed has been deliberately destroying the dollar for years with its money printing. So why would they stop? It's the same thing with the taper talk or the raising interest rates talk. It won't happen. The Fed will print until the dollar is worthless. Count on it.


----------



## RevWC (Mar 28, 2011)

nightwing said:


> You sure that is not Sam Kenneson the dead comedian :gaah:
> 
> because our economy is a joke.


----------



## Ozarker (Jul 29, 2014)

Geek, good point and that's as close as they will get. Prior to Dodd-Frank was the SAFE Act which addressed mortgage classifications and those authorized to create mortgage transactions and it was incorporated into the Dodd-Frank Act. From that we got the Consumer Financial Protection Board now Bureau that most here should be happy with. They are the teeth of consumer protections at a federal level which previously was non-existent or very limited. They are cracking down on predatory lending and banking practices from student loans, car loans, credit cards, mortgages and private financing transactions, all in all a good thing, but it's too bad such is necessary due to some bad players. It only takes a few to screw things up. Time will tell how it works.


----------



## BlueShoe (Aug 7, 2010)

I believe I heard that the US federal government pays 250 billion per year in interest to the banksters for our national debt. A national debt that the banksters themselves helped commit us to. Our debt is good for them, huh? The worse it gets the better they like it.


----------



## nightwing (Jul 26, 2014)

Imagine the printed dollar is a rocket it goes up but it does not have enough fuel (anything backing it) to escape gravity. ( faith in the dollar ) the speed increases from the pad ( before we bailed out everyone and thing ) we are loosing speed so we decide to use our chute to descend (( the attempt to use Quantitative easing )We are going too fast ( buying our own debt )
and the chute rips off ( the world realizes the dollar cannot stand) now we are in free fall and it is a rush for other countries to dump the dollars ( we are in a state of 0 gravity} then falling at increasing speed (printing more dollars faster ) we try to restart the engine and we sputter moving sideways and then add additional zeros added so a loaf of bread that was 2 dollars is now 20 dollars we are now falling at terminal velocity people try to buy good before the zeros get added on and they become even more worthless and bread becomes 200 dollars now plummeting at terminal velocity printing as fast as we can but no one will accept dollars
(We all see the ground coming even non preppers ) and all go to barter
and trade and the economy hits the ground but that is not all we have companies that have oil food and hard commodities like vehicle parts 
and other stuff on the shelf they will exit the USA. for numerous reasons 
pay debt to begin in another country taken out by wealthy industrialists 
to a place where another money still has the backing and faith of that people. (this is the ejecta of parts flying and bouncing after the crash.

Sorry about a lack of punctuation BUT, there is a bright side in 25 years 
we will have a new economy and money it is just too bad that over half who are alive now will never see it because without money no drugs hospitals or treatments not to mention all the fires and famines local 
disagreements and invasions from south America because they are tied to us like a Siamese twin.
We already are seeing the exodus from South America from no money no education no law no hope and no jobs and it is going to get worse.

I think we are in the loosing speed just before the chute gets ripped off stage.
I have no clue but it could take 1 to 7 years it all depends on external factors that burn through our reserves like wars and foreign aid.
Has anyone noticed the idea to change Social security to 70 and the 
medicaid age is getting bumped up thats equated to killing the elderly 
no health care and your dead no medicine and your dead sooner.
our life expectancy will fall like a rock.
All in the hope that the new generation of wealthy will do a couple of things like piss away their inheritance keeping workers going 
or if the people have no heirs the government will manage the estates.

The reverse mortgage is a legal way for the government to trade more worthless dollars as time goes on for your home / land it is a land grab 
look at the lands that many fed agencies have grabbed under the wetlands 
historical society and national parks as well as enlarging federal reservations.

Bankers have been blamed for most all of this but in the end who signs the contracts that they slap down and accept easy revolving credit 
vehicle loans refi's to remodel and take a vacation it is not the bank it is the people One lady stole 400,000 dollars and bought high end purses and clothes and I know she is one of millions doing the same thing.

The American dream was a home and a job now it is a party boat a weekend place a extra sports car a motorcycle vacations each year eating out and parties every weekend and swapping parties.
Well the party is almost over get ready for a long hangover and waking up in a debtors jail.

might be a long post accentuating the obvious but hey I had time.


----------

