Federal Reserve Chairman Janet Yellen announced Wednesday, December 16 that the Fed will raise short term interest rates by .25 percent. That means interest rates are going to rise for the 99 percent; from 15 to 17 percent on credit cards, for example. Home mortgage rates, car loans, home equity credit lines, and student loans, among other loans, are going to rise. Home mortgage loans will rise from about 3 percent to roughly 5 percent.
Yet there are no signs of an inflationary spiral, which would in theory spur the Fed into raising rates, which is one of its falsely stated goals. Then there’s high (but not too high) employment, another cherished and false goal of the Fed. For the last six years the US economy has been creating less jobs every year (and with declining wages) than occurred under that alleged dreadful president, Jimmy Carter, whose four years as president also included rising real wages. Carter did this with an economy and population about half of today’s economy.
Preliminary indications are that the US is headed toward a recession deeper and longer than the last one, and we should arrive there somewhere between seven and seventeen months from now. The Fed’s actions exacerbate these indications by redistributing income from the 99 to the 1 percent, curtailing demand, and hurting the economy, such as a US durable goods sector that is clearly in recession. So what gives? What is the Fed up to?
Despite false statements to the contrary, the Fed actually has pretty much followed only two goals throughout its history, and its latest move is a classic example of this. One goal is to protect the profits and share prices of the big banks, and number two is to protect wealthy investors from their own bad investment decisions. Everybody else is expendable when the Fed undertakes its responsibilities. In other words, the 99 percent is expendable, and often the victims, of the Fed’s actions on behalf of its unstated goals, which is to financially protect the rich.
And so in this most recent Fed action, the Fed is doing its first duty; increasing the earnings and share prices of the big banks at the expense of the 99 percent, which makes it seem, quite accurately, that the relationship between the Fed/Big Banks and the 99 percent is akin to parasites unto their hosts.
Your higher credit payments are going toward greater bank profits, which will provide rising dividends to rich shareholders. Share prices might and should rise, at least in the short term. This is pure income redistribution, and the corporate propaganda network wants you to believe the Fed’s increase in interest rates is to stabilize the economy, or limit non-existent inflationary pressures, or who knows what. But the last thing the corporate press wants you to know is that more of your income is being redistributed by the US Federal Reserve Bank to the rich via higher bank profits, rising shares, and soaring dividends. The rich are going to get richer, and you are going to be more poor.
The ten biggest US banks have many things in common, and one of them is declining share prices since last summer. Clearly, the Fed’s action is intended to reverse the decline.
The ten biggest US banks are:
1 JP Morgan Chase
2. Bank of America
4. Wells Fargo
5. US Bancorp
6. Bank of New York Mellon Corporation
7. PNC Bank
8. Capital One
9. HSBC North America Holdings
10. TD Bank US Holding Company