Less Tapering Becomes Tightening Credit No Matter What Fed Says
By just talking about adding stimulus at a slower pace & Federal Reserve Chairman
Sep 17, 2013 12:00 AM ET
By just talking about adding stimulus at a slower pace, Federal Reserve Chairman Ben S. Bernanke sent bond yields a percentage point higher. The rout serves as a warning to monetary policy makers that their exit from record accommodation won’t be easy to control.
The jump in yields has pushed up the cost of mortgages for millions of Americans, curbed demand for homes and prompted thousands of job cuts at Bank of America Corp. and Wells Fargo & Co., all at a time when the Fed’s policies are aimed at creating jobs and supporting housing.
Bernanke has stressed that any reduction in the amount of money the central bank pumps into the financial system each month doesn’t mean policy is getting any more restrictive. That message hasn’t been heeded by bond investors, demonstrating how hard it will be for the Fed to control long-term interest rates as it moves toward tightening, according to Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey.
“Getting out of ultra-low interest-rate policy was never going to be easy, and this is a perfect illustration of why,” Crandall said. “It is possible that this will make it even harder because the market will be even more primed to view inflection points as messy and destructive, and therefore a reason to sell early.”
Fed policy makers meeting today and tomorrow will probably lower the monthly pace of bond purchases by $10 billion, to $75 billion, according to the median response of 34 economists in a Bloomberg News survey on Sept. 6. That’s down from expectations of a $20 billion reduction in a July survey.
Jim Sinclair’s Commentary
The author is right as this is the most significant development in the US dollar in our lives.
Dollar no longer primary oil currency as China begins to sell oil using Yuan
September 12, 2012
On Sept. 11, Pastor Lindsey Williams, former minister to the global oil companies during the building of the Alaskan pipeline, announced the most significant event to affect the U.S. dollar since its inception as a currency. For the first time since the 1970’s, when Henry Kissenger forged a trade agreement with the Royal house of Saud to sell oil using only U.S. dollars, China announced its intention to bypass the dollar for global oil customers and began selling the commodity using their own currency.
Lindsey Williams: "The most significant day in the history of the American dollar, since its inception, happened on Thursday, Sept. 6. On that day, something took place that is going to affect your life, your family, your dinner table more than you can possibly imagine."
"On Thursday, Sept. 6… just a few days ago, China made the official announcement. China said on that day, our banking system is ready, all of our communication systems are ready, all of the transfer systems are ready, and as of that day, Thursday, Sept. 6, any nation in the world that wishes from this point on, to buy, sell, or trade crude oil, can do using the Chinese currency, not the American dollar. – Interview with Natty Bumpo on the Just Measures Radio network, Sept. 11
This announcement by China is one of the most significant sea changes in the global economic and monetary systems, but was barely reported on due to its announcement taking place during the Democratic convention last week. The ramifications of this new action are vast, and could very well be the catalyst that brings down the dollar as the global reserve currency, and change the entire landscape of how the world purchases energy.
Yes, we can: Obama waives anti-terrorism provisions to arm Syrian rebels
Published time: September 17, 2013 08:15
The Obama administration waived provisions of a federal law which ban the supply of weapons and money to terrorists. The move is opening doors to supplying Syrian opposition with protection from chemical weapons.
The Arms Export Control Act (AECA) allows the US president to waive provisions in Sections 40 and 40A, which forbid providing munitions, credit and licenses to countries supporting acts of terrorism. But those prohibitions can be waived "if the President determines that the transaction is essential to the national security interests of the United States."
President Barrack Obama ordered such a waiver for supplying chemical weapons-related assistance to "select vetted members" of Syrian opposition forces, the administration announced on Monday.
The announcement came after a UN report, which confirmed that sarin gas was indeed used in Syria on August 21, but didn’t point to either the Syrian army or the rebel forces as the culprits.
US ambassador to the UN Samantha Power said she was convinced that details of the report “make clear that only the regime could have carried out this large-scale chemical weapons attack.”
Syria says Western powers are forestalling peace talks
BEIRUT | Tue Sep 17, 2013 7:36am EDT
(Reuters) – Syria accused Western powers on Tuesday of trying to wreck prospects for a negotiated settlement to the country’s 2-1/2-year conflict by imposing preconditions on the peace process and supporting rebel fighters.
The comments, highlighting the precariousness of any international mediation between Syria’s two warring parties, followed a meeting of foreign ministers from the United States, France and Britain a day earlier. They warned there would be consequences if President Bashar al-Assad did not hand over Syria’s chemical weapons.
A U.S.-Russian deal to remove the weapons averted the immediate prospect of a U.S. military strike against Syria, but U.S. Secretary of State John Kerry insisted it offered Assad "no lifeline" and that he had "lost all legitimacy".
Syrian state news agency SANA quoted an unnamed foreign ministry official as saying the comments by the Western powers "exposed the truth of their aims in Syria" and their desire to impose their will on the Syrian people.
"Discussion of political and constitutional legitimacy in Syria is the exclusive right of the Syrian people," it said.
Russia against use of force in Syria resolution
Published: September 17, 2013 Updated 2 minutes ago
DAMASCUS, Syria (AP) — Moscow insisted on Tuesday that a new Security Council resolution on Syria not allow the use of force, while the Arab country’s main opposition group demanded a swift international response following the U.N. report that confirmed chemical weapons were used outside Damascus last month.
Meanwhile, a car bomb exploded at a crossing point along Syria’s volatile border with Turkey, Syrian activist groups said. At least 15 people were wounded in the explosion at the rebel-controlled Bab al-Hawa crossing, they said.
In Moscow, Foreign Minister Sergey Lavrov said Russia "spoke clearly" about rejecting the use of force when the agreement on Syria abandoning its chemical weapons was worked out in Geneva between U.S. and Russian envoys.
But if signs emerge that Syria is not fulfilling the agreement or there are reports of further chemical weapons use, "then the Security Council will examine the situation," Lavrov said, suggesting the issue could be reconsidered. He spoke at a news conference with French counterpart Laurent Fabius. France and the United States say a military option remains on the table and are pushing for the U.N. resolution to reflect that.
The meeting in Moscow came a day after U.N. inspectors submitted their report on the Aug. 21 chemical weapons attack that precipitated the heightened tensions over Syria. It was the first official confirmation by impartial experts that chemical weapons were used in the attack near Damascus, which killed hundreds.