As has been posited here on Money Daily and elsewhere, the Federal Reserve is facing a severe solvency crisis, due primarily to the bank bailouts from 2008-09.
In a headline story on - of all places - Yahoo! Finance, the Fed faces a real, dangerous situation if and when they try to normalize rates - something many economists say is nearly impossible to do without destroying the entire monetary system of the United States, and, ostensibly, the world.
The article fleshes out how US taxpayers could be on the hook for the Fed's bad debts, stemming from overpayment on mortgage and treasury note, bills and bonds in years past, specifically during the various QE sessions from 2009-2014.
It's long been held that the Fed was buying bad mortgage notes and bonds at par, when the true value of these slips of counterfeit are more than 30-70% lower. This effectively puts the Fed itself in a condition known to many in the world of finance as either insolvent or bankrupt.
Insolvent is the operative term here, since there is no functioning body by which the Fed can go to for a reorganization or liquidation, as do businesses or individuals in bankruptcy.
The solution would be to dissolve the Federal Reserve, extinguish all debts (which is anything numerated in US dollars), and have the US government - as is required by the constitution - issue a new currency, with gold and/or silver as backing, as opposed to the "full faith and credit" backing to which Americans have become accustomed.
This, as the presidential race looks to be one which a certain maverick billionaire, Donald J. Trump, has a solid chance of winning, could be the beginning of the end to the financial repression initiated by the Fed and its member banks and a start toward a return to honest money.
Capping off the week was a speech by Fed Chair Janet Yellen, characterized by the media as being "hawkish" for a rate hike in June or July.
Apparently, investors either disagreed or threw caution to the wind in the face of the three-day Memorial Day weekend, boosting stocks late in the session, ending what was a banner week for US stocks, especially the high-leverage, high-flying NASDAQ.
On the week:
Dow: +372.28 (+2.13%)
S&P 500: +46.74 (+2.28%)
NASDAQ: +163.95 (+3.44%)
For the day:
S&P 500: 2,099.06, +8.96 (0.43%)
Dow: 17,873.22, +44.93 (0.25%)
NASDAQ: 4,933.50, +31.74 (0.65%)
Crude Oil 49.42 -0.12% Gold 1,213.20 -0.78% EUR/USD 1.1114 -0.71% 10-Yr Bond 1.85 +1.54% Corn 412.25 +0.98% Copper 2.11 +0.38% Silver 16.21 -0.81% Natural Gas 2.16 +0.65% Russell 2000 1,150.45 +0.94% VIX 13.08 -2.61% BATS 1000 20,677.17 0.00% GBP/USD 1.4613 -0.37% USD/JPY 110.3725 +0.56%