We are in a period of instability. Last weekend Iran attacked the Saudi oil refining operation and one of the largest oil fields. Israel cannot seem to form a government. The United Kingdom is without a government.
It also cannot seem to resolve how to break from the European Union. China and Russia are acting extremely aggressive. Russia’s ruling party took a licking in their elections. The Chinese leadership is in a tenuous position as its economy is slowing quickly.
Federal Reserve Actions
Starting Tuesday our FED has taken to injecting cash into our banking system. They have now made three daily injections of $75 billion each for a total of $225 billion. The U.S. Federal Reserve injected the money through overnight repurchase, or “repo” agreements. The last time the Federal Reserve flushed the banking sector with this much cash was the financial crisis of 2008. Danger! Will Robinson, Danger!
Glenn Beck said on his program, “If the hairs aren’t standing up on the back of your neck yet, they should be. The Fed stepping into the market to give more cash, unannounced, three days in a row, screams something is very wrong. There is a massive lack of cash at hand. We’re also already in a very loose and cheap money environment with really super low interest rates and trillions in cash that has just been printed and injected in the market by the way of quantitative easing.
The fact that the banks need $75 billion of extra cash every day, day after day, is a sign that something is dramatically wrong… The last time the banks were doing this to shore up their balance on the sheets was in 2008. It was a warning sign then, that we talked about, and very few people recognized it at the time. I’m warning you again, please recognize this warning signal this time around.”
Conclusion
Not every nation in this world is our friend. Many believe they would gain more than they might lose in a complete realignment of the mechanisms of world trade. We have been aggressively causing change in our trade relationships. Iran is under heavy sanction. So are Venezuela and North Korea. Mexico, Canada, and Japan have re-negotiated agreements with us. The Islamic nations are not out friends. Glenn encouraged listeners to heed his warning and batten down the fiscal hatches. He tends to be a pessimist but he’s not always wrong.