The Federal Reserve's New Concern About "Systemic Racism"

Is the Federal Reserve going to use "systemic racism" as another reason to continue its massive money pumping?

Money pumping is truly out of control.

The 13-week annualized money supply growth that I track is now climbing at a rate of 57.4%. Yes, this is not a typo, 57.4%.

Here is the current 13-week annualized money supply compared to the growth over the last 40 years.

And now it seems the Fed is looking for new reasons to continue this extraordinary money printing.

Federal Reserve reporter for Bloomberg reports:

Fed leaders, led by Chair Powell, are talking about inequality in a serious way I have not heard in a long time...

The Fed is also talking about racism in a way I have never seen before – Powell bringing up racial equality in his [Humphrey Hawekins] testimony and Juneteenth today – has a chairman ever done that?

Of course, the only tool the Fed has is money printing, so Powell is hinting at the Fed battling inequality by even more money pumping.

Here's more from James Politi at the Financial Times and the new Fed "concern" (my highlight):

When Jay Powell convened the most recent meeting of Federal Reserve policymakers, his agenda included an unusual item for a central bank — the mass protests against racial injustice that followed the police killing last month of George Floyd in Minneapolis.

Mr Powell had prepared a public statement he wanted to run by Fed officials. They approved, and the Fed chairman read it at his news conference the next day. There was “no place at the Federal Reserve for racism”, he said, “and there should be no place for it in our society”.

His statement last week reflected a big change at the US central bank: its growing focus in recent years on income inequality and the role racism has played in perpetuating the problem...

One result has been a marked increase in the emotional content of commentary by Fed officials. Neel Kashkari, a former Goldman Sachs banker and George W Bush administration veteran who heads the regional Fed in Minneapolis, said he found it “shocking” that the officers who killed Floyd “never blinked” and “never hesitated”. He said on Twitter: “It indicates institutional racism that is actively taught and reinforced.”

The economic implications of this social framework were spelt out by the first African-American to lead a regional Fed, Raphael Bostic, president of the central bank’s Atlanta arm. In a note issued after last week’s meeting of the Federal Open Market Committee, he described “systemic racism” as a “yoke that drags on the American economy”.

“This country has both a moral and economic imperative to end these unjust and destructive practices,” Mr Bostic said. “It is time for this cycle to stop.”...

“Understanding these disparities is vitally important to us,” Mr Kashkari said. “If we allow the labour market to heal and not pre-emptively tap the brakes, it turns out that’s actually good for groups that are marginally attached to the labour force, those with less education, and minority groups.”

"Not pre-emptively tap the brakes," this is code for letting the money pumps run. There is nothing about money printing that helps the black community. It only helps sectors like Wall Street who get the new money first. In fact, it hurts low wage earners, many of whom are black, who are low on the totem pole when it comes to getting newly printed money in their paychecks.

Maybe now we will see some go out to those close to race hustlers in the black community but it is a con to think it will reach the average black person. The Fed is not in business for that.

Bottom line: The Fed has hit a new low, blaxploitation of the worst kind. This isn't about gritty urban tough guy blacks in films. This is about white man elite hustlers coming up with yet another reason to print more paper with green ink, the only color they really are concerned about.

The black lives movement should be calling for an end to the Fed.

-RW