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June
16
2022

Buckle Up, Things Are About to Get REALLY Nasty
Graham Summers

Stocks are imploding again.

The fact is that the Fed screwed up. And not the usual “we didn’t see the bubble” type of screw up they did in 1998 and 2006.

No, this is a multi-decade level screwup. The kind of thing that usually results in everyone being fired.

I’m talking about inflation.

It was obvious to anyone who isn’t a shill or blindly ignorant that inflation was a MAJOR problem as early as March of 2021. The Fed’s own research, in the form of the Beige Book, tells us!

If you’re unfamiliar with the Fed’s Beige Book, it’s a report the Fed publishes eight times per year.

In it, the 12 regional banks that comprise the Fed banking system present anecdotal information on the U.S. economy. The Fed retrieves this information via interviews and conversations with business leaders, market experts and other people at the frontlines of the economy.

You can think of the Beige Book as the Fed’s attempt at “outreach,” through which it gives business contacts and others the ability to tell the Fed what they are experiencing in the real world. 

And throughout 2021, the comments captains of industry and managers made to the Fed were extremely inflationary. Emphasis are added in the quotes below.

“businesses in most sectors expect fairly widespread increases in the prices they pay in the months ahead…”

~Beige Book March 2021.

“Prices accelerated slightly since the last report, with many Districts reporting moderate price increases and some saying prices rose more robustly. Input costs rose across the board, but especially in the manufacturing, construction, retail, and transportation sectors—specifically, metals, lumber, food, and fuel prices.”

~Beige Book April 2021.

“Looking forward, contacts anticipate facing cost increases and charging higher prices in coming months… On balance, overall price pressures increased further since the last report.” 

~Beige Book May 2021.

The Fed ignored these warnings, claiming that inflation didn’t exist… or was transitory. So, the Fed was basically claiming that the people who actually run businesses and who were telling the Fed that costs were skyrocketing with either A) lying or B) idiots.

I should correct that last paragraph… the Fed didn’t just ignore those warnings… throughout that time period, the Fed printed $120 BILLION per month while keeping interest rates at zero.

And in fact, it didn’t STOP printing money until March of 2022… a full year later!

So now the Fed is attempting to play “catch up” by raising rates first at 0.25%, then 0.5%, and now 0.75%. As I write this, the Fed has rates between 1.5% and 1.75%.

Meanwhile, inflation is over 8%. And the yield on the 2-year U.S. Treasury which the Fed usually uses as a guide for where rates should be is at 3.2%.

And the Fed has yet to shrink its balance sheet, at all.

Stocks have already collapsed over 20%... and are about to break their bull market trendline from the 2009 lows.

What happens when the Fed is FORCED to raise rates to 5%? What happens when the Fed tries to shrink its balance sheet by $1 trillion?

On that note, we've published a Special Investment Report called Survive the Inflationary Storm and it lays out five secret investments that could make inflation pay you as it rips through the financial system.

We made only 100 copies available to the public and they are going fast!

To pick up yours, swing by:

https://phoenixcapitalmarketing.com/inflationstorm.html

 

Graham Summers, MBA is Chief Market Strategist for Phoenix Capital Research, an investment research firm based in the Washington DC-metro area.

Graham’s sterling track record and history of major predictions has made him one of the most sought after investment analysts in the world. He is one of only 20 experts in the world who are on record as predicting the 2008 Crash. Since then he has accurately predicted the EU Meltdown of 2011-2012 (locking in 73 consecutive winners during this period), Gold’s rise to $2,000 per ounce (and subsequent collapse), China’s market crash and more.

His views on business and investing has been featured in RollingStone magazine, The New York Post, CNN Money, Crain’s New York Business, the National Review, Thomson Reuters, the Fox Business, and more. His commentary is regularly featured on ZeroHedge and other online investment outlets.

 

 

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