WORD OF THE DAY—QT (Quantitative Tightening)

If you are worried about what the Fed is doing in the future, it will probably follow Britain’s central bank and start using QT (Quantitative Tightening). QT is where the Feds will seek to sell off assets, (mainly bonds) from their balance sheet. This practice will affect corporations, stockholders and the bond market.

QT is what ultimately ended the 2007-2008 BIG RECESSION. By its end, the Fed had bought 9 trillion dollars on their balance sheet.

The BIG RECESSION occurred because the big financial markets didn’t have liquidity (the ability to buy and sell assets easily). So our Fed bought assets in order to save big corporations and banks.

If I recall right over 500 banks had closed their doors in 2007-2008. That was because giant banks, corporations, etc. had built humongous houses of cards. When the bubble burst on their so-called ‘insurance’ derivative IOU’s, they didn’t have enough money to cover their debts. Everyone was hurting.

QT TO THE RESCUE

QT (Quantitive tightening) creates a market that is liquid, so businesses will have access to enough money to keep on keeping on.

As for us ordinary people, workers, families, etc. QT injects enough money into the economy to restart it, and lowers inflation.

Yes, interest rates will go up on mortgages and cars, etc. So, the thing to do is to start saving your money while the big guys are buying up the Fed’s 9 billion dollar assets, if you can possibly do that. And if you are working try to raise your wages if you can.

The wealth that the rich are buying at the top will start trickling down through banks as as banks continue to hike interest rates on savings and some kinds of checking accounts.

Most likely due to President Biden’s Build Back Better campaigns to really make America great again, there will be good paying union jobs in the long run. So this is the time to be patient, and wait for luxuries you want to get go down in price.

A BRAKE ON RECESSION

As for investors, I’ve read that Consumer Discretionary products and Energy companies are two sectors flourishing most right now. However, as for Energy companies a lot of Dark Money from overseas is flowing in to U.S. energy companies to spend in the November U.S. election for candidates who will favor gas and oil companies.

It is possible that if the DOJ can get past its battle with our former President over the documents #45 illegally took out of the United States archives, that the DOJ could start taking a look at that Dark Money coming into the Energy sector.

Right now you can read my posts on the right-side column of my Brucenomics.com home page about how back in the 1990s Dark Money impacted our Federal Justice system and Supreme Court.

Long ago, starting in the 1950s, Dark Money (from oil and gas corporations) was used to buy off GOP Senate legislators in both State and Federal Governments who pledged to put extreme right-wing Judges on U.S. Federal and State Court benches.

More recently, Senator Sheldon Whitehouse and Jennifer Mueller have written a book called The Scheme about how Dark Money has finally succeeded in making right-wing conservatives’ dreams of putting extreme-right-wing judges on the benches in our Federal courts and the Supreme Court come true.

The frightening thing now is how much Dark Money is now coming into our elections from foreign sources to American companies profiting from the Energy sector.

Climate change is real! Too many people have died from freezing, excessive heat, and/or lost their homes from fire or flooding due to Energy companies’malfeasance, lack of care, and greed.

We need to focus on the real problems facing Americans in this century. And we need to do it now! And most certainly, if there is to be a Recession, and the GOP cancels Social Security and Medicare and lets wealthy billionaires and corporations run loose, they could ruin our entire economy and increase inflation byond belief.