While the country was distracted with the Covid-19 lockdown and economic crisis, the Federal Reserve made a huge banking requirement change never before done in history. The Fed cut “. . . reserve requirement ratios to zero percent effective March 26, 2020. This action eliminated reserve requirements for all depository institutions.” (Read for yourself here.) What does this profound change mean? Economist John Williams says, “The system is bankrupt, and they are just spending the money to prevent an immediate collapse as opposed to having it collapse right now. They have cut reserve rates back to 0%. The bailout of the banking system of the ‘Great Recession’ didn’t work. So, now, they are just printing money and bailing out whatever they have to. People have done this throughout history including the Weimar Republic (Germany hyperinflation) and Zimbabwe (also had hyperinflation). . . . We effectively have a Zimbabwe Fed.”
So, the Fed is going to print all the money it needs to bail out every bank that needs one? Williams says, “That’s exactly what they said they are going to do, and not only any bank, but any financial institution, the stock market, and with infinite money, you can do all sorts of things. But guess what? You also get a hyperinflation. They have crossed the line. That’s why you want to own physical precious metals.”
On the economy decimated by the forced Covid 19 lockdown, Williams, who is the founder of Shadowstats.com, computes data without all the accounting gimmicks to make things look better than they really are. Williams says, “We have about 40 million unemployed . . . which is about a 40% unemployment rate (using Shadowstats.com methods) and not 13% claimed by the government . . . . The pandemic collapsed economy took very heavy hits. The April numbers on industrial production had its worst drop in its 101 year history. The drop in April retail sales was the deepest drop in its 73 year history. That was a 60% to 80% contraction. . . . I think we are going to see a GDP contraction in the second quarter of about -50%. . . . April GDP is 50% down, and there you have the full effect of the collapse. . . . We will bottom out in the second quarter, and it might bottom bounce in third quarter, but it should start coming back in fourth quarter.”
Williams says not to worry about the hits on price crashing manipulations on gold and silver, especially in the face of massive record money printing. Williams says, “The price manipulation is to try to kill it. Central banks hate gold (and silver) because it shows they are not doing their job. I measure unemployment the way it used to be measured by the government, and I also measure the way inflation used to be measured. . . . Gold kept up with actual inflation and your actual out of pocket expenses. Gold is going up right along with real inflation. (ShadowStats.com computations say the real inflation rate in America currently averages 9% per year.) . . . . I am looking for a hyperinflation. As this money get pumped out there, you will continue to see prices rise, and you are going to see some acceleration there. In hyperinflation, it will be so rapid the currency is worthless to you.”
Join Greg Hunter of USAWatchdog.com as he goes One-on-One with economist John Williams, creator of Shadowstats.com.
Williams also said, “The fact the Fed cut reserve requirements at banks to a historic 0% is a pretty good sign we are close to the end. Not even in the ‘Great Recession’ did they do that because they thought they could still pull it back around, but not now.”
Greg is the producer and creator of USAWatchdog.com. The site’s slogan is “analyzing the news to give you a clear picture of what’s really going on.” The site will keep an eye on the government, your financial interests and cut through the media spin. USAWatchdog.com is neither Democrat nor Republican, Liberal or Conservative. Before creating and producing the site, Greg spent nearly 9 years as a network and investigative correspondent. He worked for ABC News and Good Morning America for nearly 6 years. Most recently, Greg worked for CNN for shows such as Paula Zahn Now, American Morning and various CNN business shows.