(Video) Rick Santelli-New world Order Central Banking

Rick Santelli CME Group statement on Squawk Ally CNBC

“That doesn’t mean we can’t address the New World Order we are in, but we are going to have to move slowly.” 


“The problem with one shade of grey, all of you thinking about the Federal Reserve, is there is no flexibility of their inflation pillar and preferred inflation gage. Which is running under what they still deem to be, after everything we’ve been through, after growth has been cut more than half and productivity has gotten slashed. But that target of 2% remains, even though we can talk at nossium about how the notion that it’s really pretty arbitrary. If we look at the legislation that created that pillar, there is no real number there. But my point is this, the Fed does understand flexibility, look at what they did to try and combat the great recession. Who would have ever thought that back in 2000 that they would have a balance sheet this large or even more recently, flexibility on the labor market. The goal post with wheels, with regard to exactly what target unemployment rate would be the trigger, they have shown flexibility. All the flexibility that I have seen from the Federal Reserve, from the ECB (European central bank, from the BOJ (Bank of Japan), BOE (Bank of England)  has been flexibility to do more, to do it longer and ignore benefit analysis. Which is difficult because these are first off items, time has to pass, I understand. My point is this, they need to have flexibility on their second piller as well. Why? Well I had Mr. Olsen, former Fed Governor on today, and his thought was, we have to reach the target. But I pushed backed, what if we don’t reach the target for another couple of years? Truly there are damaging aspects, unknown aspects, unknown outcomes, negative rates and their impact on the financial markets. It’ll be very difficult for one central bank to break out and not the rest. We can learn a lot about how we followed Europe on January, down when their rates went down. Think about leverage and the duration of fixed income sovereign products that basically have zero coupons. If these rates start to move they are going to move big. And my final notion is I’ve talked about normalization for many years, sorry, I have to now decay that concept, I don’t think we could go back to what was once considered normal with central banking. THAT DOESN’T MEAN WE CAN’T ADDRESS THE NEW WORLD ORDER WE ARE IN, BUT WE’RE GOING TO HAVE TO MOVE SLOWLY. But they need to be committed and they need to be forth write that it is the right move to try to at least out some semblance of vig back into the capitalist system.”


Rick Santelli-CME Group




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