PRESS RELEASE
Goldman Tries To Issue Desperate Orders to Fed, ECB
Sept. 21, 2015 (EIRNS)—As Lyndon LaRouche noted in discussions last week, Wall Street's return to its "QE" period demand for more and more "easing" from the Federal Reserve and other central banks, is a sign of the crash it faces. Goldman Sachs has taken the point in desperately pressing this demand.
In a Business Insider interview, Goldman chief economist Jan Hatzius discusses the "note" he sent out just before the Fed's Sept. 17 meeting in which it "flinched" and did not raise interest rates. Hatzius said, "The Fed should think about easing" [to negative interest rates]. "We have seen a sizeable tightening of financial conditions. At this point, our GSFCI Taylor rule suggests that the FOMC should be trying to ease rather than tighten financial conditions. Our own view in terms of optimal policy is quite strongly in favor of waiting well into 2016."
The "tightening" Hatzius cites refers to the rate spreads on interbank loans having risen very sharply over the past several weeks, a sign of Wall Street distress.
On Sept. 20 Goldman Sachs followed this with a "report" (i.e., comment by Hatzius) directed to the European Central Bank. This one said that the ECB should maintain its current quantitative easing (QE) money-printing program not until September 2016, as scheduled up to now, but until "the end of 2017."
Following up immediately, French ECB board member and frequent hedge fund spokesman Benoît Coeuré said in Paris today, that "prospects for growth in the euro area have clearly weakened," and the euro is rising, so more QE is needed.
Commenting these calls, a banking contact told EIR that the vote for negative rates on Sept. 17 by FOMC member Kocherlakota (Minneapolis Federal Reserve Bank) is preparation for a large-scale bail-in of depositors' funds in U.S. banking system. This can take the form of simple confiscation of savings, he said.
On these threats, LaRouche commented that they represented "a defensive tactic which will solve absolutely nothing for Wall Street, which is doomed, but could leave the economy in much worse condition, if not prevented by an abrupt imposition of Glass-Steagall reforms."
