The Philosophical Salon has had some of the most interesting explorations of the interplay between the torrents of both fiscal and monetary liquidity, lockdowns, and the nagging sense that something much larger than official explanations is going on. Some previous links after the jump.
From The Philosophical Salon, January 3:
Unsurprisingly, Santa brought us yet another Covid Christmas, replete with the usual set of presents: facemasks, quarantines, social distancing, coercive inoculations, vaccine passports, non-stop media fearmongering, and lockdowns. Two years down the line, after billions of injections with multiple and diversified experimental vaccines, the mighty pandemic is still with us. This time, however, it comes with the bonus of soaring inflation, which by devaluing money pushes more and more people into debt and poverty. And to add insult to injury, the ‘experts’ are now warning about “inflation inequality”. As my daughters would say (via Homer Simpson): duh!?
Perhaps, while we wait to hear what we must do to ‘save Easter,’ it is time to take the red pill and face reality: since the start of 2020, a macroeconomic virus disguised as a pandemic virus has taken possession of our lives, causing widespread depression and consigning entire populations to often extreme forms of legalized discrimination.
Monetary Injections and Other Inoculations
The deep function of a ‘health emergency’ legitimised by perpetual programs of mandatory vaccine inoculations can only be grasped if placed in the relevant macro context, namely the terminal crisis of our mode of production. The causal sequence to bear in mind is: economic implosion – pandemic simulation – authoritarian offensive. Should it come to fruition, this paradigm shift would culminate in a totalitarian model of implosive capitalism, perhaps still thinly disguised as democracy but legitimized by the despotic management of global emergencies that are grotesquely disproportionate to any actual threat. As shown by the ‘Covid vaccine’ indoctrination campaigns, with attendant ‘anti-vax’ scapegoating, the totalitarian potential of mass propaganda is virtually limitless. For the first time in history, the blame for a treatment that does not work (at least not in the way we were promised) has been placed on those who do not use it.
Yet we must be mindful that today’s ideological violence comes as a reaction to a looming socioeconomic collapse whose magnitude has never been experienced before. The first shock was the 2007 credit crunch and following global recession. At that time, the bailing out of the financial sector led to the European debt crisis (2010-11), which turned Quantitative Easing (central bank programs of financial asset purchase) into the mother of all monetary policies. Since 2008, regular central bank distortion through QE injections has spawned an ultra-financialised regime of capitalist accumulation contingent on the creation of asset bubbles whose volatility resurfaced in mid-September 2019, with the liquidity trap in the Wall Street repo (repurchase agreement) loan market. This, in turn, cleared the way for Virus and the perverse logic of ‘pandemic capitalism,’ which allowed the top 1% to increase their wealth at record speed, while the middle classes are going missing.
As recently detailed by Pam and Russ Martens, on September 17, 2019 the Federal Reserve started an extraordinary program of repo loans to its so-called ‘primary dealers’ on Wall Street (including JP Morgan, Goldman Sachs, Barclays, BNP Paribas, Nomura, Deutsche Bank, Bank of America, Citibank, etc.) – these were overnight loans as well as 14-day and even longer term loans. On July 2, 2020 (the last date currently available from the Fed’s database) the cumulative value of these loans, whose collateral consisted mostly of US Treasuries and Mortgage-Backed Securities, totalled $11.23 trillion. Because of the fragmented way in which the Fed releases its data, it is impossible to establish exactly which loans are or were outstanding, and by how much. Nevertheless, what matters is their astonishing size, which confirms that Wall Street’s trading houses were on the verge a catastrophic meltdown before the arrival of Virus. Further evidence of the loan market’s persistent fragility came on July 28, 2021, when the Fed announced the creation of a ‘Standing Repo Facility’, consisting of $500 billion backstop credit each week for the Fed’s 24 primary dealers and additional counterparties.
As I argued in a recent piece, the countermoves to an impending meltdown were planned months in advance. Official documents indicate that our financial lords knew all too well that the post-2008 artificial expansion of the money supply was becoming unmanageable, not least because accompanied by a global economic contraction that, in 2019, had pushed Germany, Italy and Japan to the verge of recession, while Britain, China, and other economies were spluttering ominously. It is therefore reasonable to surmise that, rather than risk a sudden and catastrophic collapse, the elites opted to control the accident while, as it were, calling the ambulance in advance. As we have seen, when the Wall Street repo market froze up in mid-September 2019, the Fed swiftly prescribed a higher dose of the same medicine, that is to say an unprecedented expansion of monetary stimulus in repo loans. But this time, crucially, under protection of the pandemic shied. If we fast forward to January 2022, the same logic applies: the ‘Covid emergency’ continues to work like a huge Linus blanket for a global economy that is sinking under mountains of unsustainable deficits and unserviceable debts.
It is important to be clear about the magnitude of the monetary expansion under consideration. In August 2019, a white paper issued by BlackRock (the all-powerful investment fund already known as the “fourth branch of government”) had shown the Federal Reserve the way out of the coming “dramatic downturn,” urging the US Central Bank to implement an “unprecedented” monetary policy whereby large masses of money created out of thin air were to be delivered “directly into the hands of public and private spenders.” This “going direct” scheme, which according to BlackRock had to be made “permanent,” was promptly inaugurated a month later in response to the repo market crisis. Since then, and especially after the arrival of Virus, the Fed’s balance sheet has grown by nearly 5 trillion dollars, an absolutely extraordinary expansion even when compared with the QE bailouts started at the end of 2008. And to get an idea of the global dimension of this expansion, we need to add the trillions created by other central banks around the world, as well as programs of fiscal stimulus such as ‘helicopter money.’
As explained by John Titus, what matters is not merely the quantitative but especially the qualitative character of the Fed’s monetary manoeuvre. In the entire history of the Fed (founded in 1913), there had never been a direct correlation between central bank reserve creation and monetary supply in the retail banking circuit. However, since September 2019 the new reserves created by the Fed started being replicated dollar for dollar as deposits within the existing 4,336 US commercial banks. In other words, the expansion of the Fed’s balance sheet came to correspond directly with the overall money supply in the economy: exactly the monetary medicine ordered by BlackRock, which became a matter of force majeure a few months later thanks to a ‘global health emergency’ that still continues to work like a life insurance policy for the financial markets. Ultimately, the extent to which the “going direct” strategy and the massive program of roll-over repo loans overlap is of little importance. What needs to be emphasised is that the financial house of cards was on the verge of collapse already in 2019, and that Virus arrived at the right time to enable and justify the monetary deluge with related paradigm change....
....MUCH MORE
You don't need to buy into every word of what the various writers are saying to get some value out of these pieces. Take what resonates with what you know, set the rest aside and make damn sure you keep your eyes open and your wits about you.
Previously:Money, Money, Money: "A Self-Fulfilling Prophecy: Systemic Collapse and Pandemic Simulation"
"The Central Bankers’ Long Covid: An Incurable Condition"
