Who gave Powell the Power to Manipulate Markets?

Nov. 30, 2018
by Bob Adelmann

With just two words – “just below” – Fed Chair Jerome Powell gave Wall Street what it was hoping to hear on Wednesday: a step back from his “we’re a long way from neutral” comments in early October. Wall Street finished the day higher by more than two percent. Here’s what Powell said that triggered the relief rally:

Interest rates are still low by historical standards, and they remain just below [emphasis added] the broad range of estimates of the level that would be neutral for the economy – that is, neither speeding up nor slowing down growth.

That’s a very long way from his previous comments that took 2,500 points off the Dow in the weeks following their issuance.

Nearly all the conversation was about Powell’s words, which were, according to Robert Pavlik, chief investment officer at SlateStone Wealth, “exactly what the market was expecting to hear. Obviously it has to do with the market reaction to his previous comments. He had to walk [them] back.”

There was much discussion over just what he meant by “neutral.” Two weeks ago, Charles Evans, the president of the Chicago Federal Reserve Bank who also sits on the Fed’s Federal Open Market Committee, didn’t know what “neutral” meant: “Evans told his audience [in Chicago a week earlier] that ‘interest rates could comfortably run above the so-called “neutral rate” but added afterwards that that is a “vague” notion.

A “vague” notion? The Fed is striving to hit a target but doesn’t even know what that target is? What remarkable hubris! What astonishing self-aggrandizement! As Peter Boockvar, chief investment officer at Bleakley Advisory Group, noted, “It’s a word game.”

It’s much more than a word game. The conversation carefully steps around any discussion of the Fed’s origins, or its enabling of the Great Recession, or its almost complete destruction of the U.S. currency’s purchasing power. Even the Wikipedia entry on the criticism of the Fed avoids any mention of the conspiracy that launched America’s central bank.

Ed Griffin took years investigating the Fed’s background before publishing “The Creature from Jekyll Island.” In it, he makes clear just who was behind its creation, what their intentions were, and why they labored in secret to birth it. (See Sources below)

Rep. Louis T. McFadden spoke clearly about the devil’s child that was birthed in 1913. McFadden, who chaired the House Committee on Banking and Currency from 1920 to 1931, told the truth about the Fed in a notable speech he gave on the House floor in 1932:

Mr. Chairman, we have in this country one of the most corrupt institutions the world has ever seen. I refer to the Federal Reserve Board and the Federal Reserve Banks….

This evil institution has impoverished and ruined the people of the United States … through the corrupt practices of the moneyed vultures who control it.

McFadden was referring to the Fed’s policies that laid the groundwork for the Great Depression, from which the country didn’t recover for decades.

Those who pooh-pooh conspiracies clearly think only good guys organize to achieve their goals. How then to explain the mafia, drug cartels, al Qaeda, Robespierre’s Jacobins, Lenin’s Bolsheviks, or Hitler’s SS? Or perhaps the skeptics believe that those in government are by definition the good guys, in which case how do we know the names Archibald Cox, Ken Starr, and John Danforth? To truly disbelieve in conspiracies, you have to maintain yourself in a state of almost childlike naïveté, and never, ever read any history – or even watch the news. If you refuse to be such a Pollyanna, you can read about one of the most influential conspirators in America in the FREE report available here.

The Fed’s problem isn’t just constitutional, either. It’s a moral problem, as noted by Henry Hazlitt who said, “Moral rules which forbid mankind to hurt one another include wrongful interference with each other’s freedom.” The Fed’s deliberate interference in the financial markets affects everyone who participates in the economy. It affects everyone who borrows, spends, saves, or invests. It has all but destroyed the purchasing power of the currency. The FOMC’s decisions impact the behavior of virtually every living soul in the country.

There’s another problem altogether missing from today’s conversation over those “two words”: the implementation in 1913 of the fifth plank of the Communist Manifesto: “A centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly.” The Federal Reserve System, created by the Federal Reserve Act of Congress and signed into law by President Woodrow Wilson in 1913, is indeed such a “national bank,” which manipulates interest rates while claiming a monopoly over legal counterfeiting of the U.S. currency.

Let’s say it clearly. For all the talk about the Deep State, few commentators have included the Fed in their commentary. And yet the Fed was birthed by international bankers and remains firmly in their grip to this day. If that isn’t part of the Deep State, what is?

What’s remarkable is that, in the face of all of this destructive manipulation by the Fed, the United States economy is performing as well as it is. Brian Wesbury, chief economist at First Trust, wrote in its Monday Morning Outlook this week that the economy’s “fundamentals are very strong. Total [holiday] retail sales are likely to be up 6%+ this year over last year … the unemployment rate is 3.7 % … average hourly earnings are up 3.1% from a year ago, the fastest growth since 2009 … gas prices are down … household debts [are] the lowest relative to household assets since the mid-1980s … debt service [is] hovering near the lowest share of after-tax income since the early 1980s … we expect this to be reflected in continued robust gains in consumer spending in both November and December as well as the year ahead.”

There was a time, pre-Fed, when the U.S. economy was allowed to operate relatively unfettered. The U.S. economy doubled following the Civil War, and then doubled again. Economists calculated that the economy was growing at an average of between seven and 10 percent a year. Today hurrahs greet reports of an economy growing at three percent.

It’s been more than a hundred years since the Fed was fastened onto the U.S. economy. Imagine what the next hundred years would look like without it.


An Ivy League graduate and former investment advisor, Bob is a regular contributor to The New American magazine and blogs frequently at LightFromTheRight.com, primarily on economics and politics. He can be reached at badelmann@thenewamerican.com.


CNBC.com: Dow surges 600 points, biggest rally in eight months, after Powell signals rates are near neutral

NYTimes.com: Two Words From Fed Chairman Jerome Powell Sent Markets Soaring

FEE.org: Henry Hazlitt on Liberty: 21 Choice Quotes

Assets.RealClear.com: Consumers Stay Strong

CNBC.com: After Powell comments, traders see just one rate hike next year

Wikipedia’s    Criticism of the Federal Reserve

The Ten Planks of the  Communist Manifesto  1848 by Karl Heinrich Marx

G. Edward Griffin’s “The Creature from Jekyll Island”

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