A story in a few parts:
Let’s take a trip back in time to 2008, just before one of the biggest financial crises the US has ever experienced. 4 of 7 Fed seats resigned shortly before the crisis reared its ugly head. If you’ve watched Inside Job, you probably remember Fed Governor Frederic Mishkin’s announcement of resignation, and the hilarious reasoning behind it. It’s important to note that the vast majority of Americans were oblivious to the meltdown that was happening right in front of them.
Fast forward to 2021, where the Federal Reserve’s monetary policy, QE infinity, has elevated financial markets to unstable levels. They are undoubtedly responsible for many of our financial problems we will soon face. In early September, 2 Fed Presidents announced that they will be selling their stocks per “conflict of interests” issues. Perfect timing? Shortly after this announcement, the Evergrande contagion fiasco arrives, sending fear and uncertainty surging through our financial markets. What a coincidence that those Fed Presidents got out in time 😅.
These same Fed Presidents and one Vice Chair for Supervision, will have all departed from the Fed by October 13th. The 2 Fed Presidents recently got exposed for insider trading and announced that they were resigning. They didn’t receive any punishment, they resigned 🤩. Not only did they resign, but they resigned during a fairly turbulent period in financial markets. Sound familiar? Perfect timing….again? Straight from the article: “Rosengren made the announcement in the morning, citing health issues, while Kaplan released a statement several hours later saying the “recent focus” on his financial disclosure risked “becoming a distraction” for the institution.” Kaplans statement lets me know that he genuinely believes the public is completely delusional. I unfortunately have to agree with that sentiment.
According to the Treasury secretary, the US government is projected to run out of money by October 18th if the debt ceiling is not raised. If the debt ceiling isn’t raised, the US will default for the first time in history. With an issue as big as this, one would think that it would be taken very seriously, especially considering the fact that Congress goes on recess next week and comes back on *October 18th*.
Instead of behaving like responsible adults, Congress engages in blame/responsibility shifting. For whatever reason, the GOP and Democrats have to put on a show before making a decision regarding the debt ceiling. We still haven’t fully recovered from the pandemic. Failure to raise the debt ceiling will cause a financial crisis that will make 2008’s look minuscule. With this in mind, Fed members are heading out of the door, seemingly just moments before an enormous economic downturn.
I can’t help but feel like the vast majority of the US is sleepwalking into potentially the biggest financial crisis we’ve seen. Although we are prepared for it, I wish that other people would focus on these matters that are actually important, rather than focusing on trivial matters, such as celebrities lives. You don’t need to be a rocket scientist to see that something is brewing, the writing is on the wall.