“The least-bad scenario is a hard landing, global recession worse than the 1930s. The worst-case borrows from the Four Horsemen of the Apocalypse: war, famine, pestilence, and death.” – Kenneth S. Deffeyes
“When hopes and dreams are loose in the streets, it is well for the timid to lock doors, shutter windows and lie low until the wrath has passed. For there is often a monstrous incongruity between the hopes, however noble and tender, and the action which follows them. It is as if ivied maidens and garlanded youths were to herald the four horsemen of the apocalypse.” – Eric Hoffer Read More
German newspaper Der Spiegel reported that German security officials believe "highly effective explosive devices" were used to blow up the Nord Stream pipelines in the Baltic Sea.
According to SPIEGEL information, it was calculated thatexplosive devices with an effect comparable to that of 500 kilograms of TNT must have been used to destroy the tubes. The seismic signals registered by various measuring stations were also included in the estimate. Read More
09.28.22- This Financial Crisis Will Be 10x Worse Than 2008
The financial crisis now breaking will be ten times worse than 2008. It will need its own name, perhaps the Extremely Great Financial Crisis.
Stocks, bonds, commodities, real estate, mortgages, corporate financial outlooks…are all tanking. The dollar is spiking. Layoffs are growing. Markets are imploding. What is going on? Read More
The game of chicken, learned by most teenagers, provides a reasonable description of current financial market conditions. The Federal Reserve is playing chicken with financial markets.
Usually the game of chicken determines a winner by whomever “blinks” first. In this case, there can be no winner, at least long-term. In order for the Fed to win, it must crash markets. In order for markets to win, they must call the Fed’s bluff. Read More
09.26.22- Fed Up With the Fed
But should we end the Fed? In a word, yes. What would replace it? You! And me. And every other person, negotiating through markets, just like the Founders wanted. Read More
“The LORD sends poverty and wealth; he humbles and he exalts.” – 1 Samuel 2:7
An enterprising entrepreneur did a comedic graphic of Federal Reserve Chairman Jerome Powell captioned: “IN JPOW WE TRUST.”
You may have seen it.Read More
When asked about price inflation in his Sunday interview with 60 Minutes, President Biden claimed that inflation "was up just an inch...hardly at all." Biden continued the dishonest tactic of focuses on month-to-month price inflation growth as a means of obscuring the 40-year highs in year-over-year inflation. This strategy may yet work to placate the most ignorant voters, but people who are paying attention know that price inflation continues to soar. Read More
09.22.22- Powell Does It Again
A 75-basis-point rate hike was forecast… and a 75-basis-point rate hike it was. The Federal Reserve issued word shortly after 2 p.m. Eastern.
Today’s was the third consecutive 75-basis-point rate raising. Never in its history has the Federal Reserve imposed three consecutive 75-basis-point rate raisings. Read More
09.21.22- Deep Into the Danger Zone
The Fed kicked off its two-day meeting today in Washington. The most likely outcome is a 0.75% rate hike, which would bring the Fed’s target rate to between 3–3.25%.
The stock market was down significantly today ahead of tomorrow’s announcement. Importantly, the 10-year Treasury yield rose to 3.57% today, the highest level in over a decade.
Rising yields are especially bad for growth stocks, which have accounted for many of the market’s gains in recent years.Read More
For more than a year I’ve been arguing that the Fed was tightening US dollar supply. When I first put the idea out there it was met with intense skepticism and, for the most part, it still is.
The Fed has long been the punching bag of hard money and alternative finance types because, frankly, it always deserved it. For nearly the past generation, until June of 2021, the Fed acted as the Central Bank of the World. Read More
09.19.22- The Fed Declares War on Wall Street – With Everyone Suffering the Consequences
09.17.22- Jay Powell: A Breathing Weapon Of Mass Destruction?
Below we track how the Powell Fed serves as a contemporary weapon of mass destruction.
Powell’s so-called “war against inflation” will fail, but not before crushing everything from risk asset, precious metal and currency pricing to the USD. As importantly, Powell is accelerating global market shifts while sending a death knell to the ignored middle class.
Let’s dig in. Read More
09.16.22- Inflation is turning hyper
Money supply took off during covid lockdowns. It is now about to take off again to pay everyone’s energy bills. But that is not all.
Demands for currency and credit to be conjured out of thin air to pay for everything will be coming thick and fast. Expectations that energy prices, including European electricity, have peaked are naïve. Putin has yet to put the winter and spring screws on Europe and the world fully. It will be surprising if global oil and natural gas prices in Europe are not significantly higher on a twelve-month view. And Europe has messed up its electricity supplies — that is where the energy costs will rise most. Read More
Speaking at Jackson Hole, Wyoming, on August 26, 2022, the chair of the Federal Reserve, Jerome Powell, said the Fed must continue to raise interest rates—and keep them elevated for a while—to bring the fastest inflation in decades back under control. Powell said that a tighter interest rate stance is likely to come at a cost to workers and overall growth. However, he holds that not acting would allow price increases to become a more permanent feature of the economy and prove even more painful down the road. Read More
Monday’s financial news was filled with fantasies about how Tuesday’s CPI report would be as boring for the stock market as watching the paint dry on Fed QT, but all that falderal didn’t even age one day without putrefying to a level of rancidness that would curl the nose hairs of most investors by Tuesday morning. Read More
Central Bank Digital Currencies (CBDCs) are coming even faster than many anticipated.
The digital yuan is already here. It was introduced in China last February during the Winter Olympics. Visitors to the Olympics were required to pay for meals, hotels, transportation, etc., using QR codes on their mobile phones that linked to digital yuan accounts.
Nine other countries have already launched CBDCs. Europe is not far behind and is testing the digital euro under the auspices of the European Central Bank. Read More
08.12.22- The Story of the Fed
09.10.22- And Now, for Something Entirely Different: What In The World Is Wrong With This Country?
What happens if the Federal Reserve loses money?
The Fed typically earns interest income from all of the bonds it holds on its balance sheet. It also collects fees for services that it provides. Most of any Fed operating profit is remitted to the US Treasury under federal law. That money becomes part of the federal government’s operating budget. In other words, the central bank serves as a revenue source for Uncle Sam. Read More
Remember the quaint old days of 2019? We were told the US economy was in great shape. Inflation was low, jobs were plentiful, GDP was growing. And frankly, if covid had not come along, there is a pretty good chance Donald Trump would have been reelected.
At an event in 2019, my friend and economist Dr. Bob Murphy said something very interesting about the political schism in this country. He said: If you think America is divided now, what would things look like if the economy was terrible? Read More
09.07.22- Powell: A Breathing Weapon
Below we track how the Powell Fed serves as a contemporary weapon of mass destruction.
Powell’s so-called “war against inflation” will fail, but not before crushing everything from risk asset, precious metal and currency pricing to the USD. As importantly, Powell is accelerating global market shifts while sending a death knell to the ignored middle class.
Let’s dig in. Read More
The Federal Reserve was no doubt troubled by July’s decline in the US unemployment rate to 4.5 percent and increase in job openings to 11.2 million. This is because the Fed’s strategy for reducing the historic price inflation now plaguing the economy — caused by the Fed’s unprecedented low or zero interest rate policies — is to increase unemployment in order to decrease consumer spending. In his speech to the annual monetary policy conference in Jackson Hole, Wyoming, Fed Chair Jerome Powell reiterated his commitment to increasing unemployment, or, as he puts it, “softening the labor markets.” Read More
(Editor's Note: Given the convoluted nature of the title of this essay, it is a genuine stretch to imagine a greater threat to America's economy than the Federal Reserve itself. The Federal Reserve has been, for just over a century, the single greatest threat to the world's economic well being. One hundred ten years of contrived inflation (death by a thousand cuts) has, pretty much, destroyed our currency (a 1980 dollar is worth a quarter) and decimated the middle class. The fact that a cadre of demented buffoons, led by a senile piece of human garbage, has become a an even greater threat than the Fed, speaks volumes to the current terrifying state of the nation. - JSB) Read More
Elizabeth Warren must be a fool. That, or she thinks the rest of us are fools.
The Senator recently took to CNN to publicly fret over the Federal Reserve’s rate hikes. She’s worried they will tip the economy into recession.
What’s Warren afraid of? Her fears have already come true.Read More
It would be easy for those who have decided to buy gold and silver bullion to lose heart over the precious metals, had they seen how prices reacted to Chairman Powell’s comments, last week.
However, to do this would be very short-sighted. Whilst Powell may well have signaled that the Fed will stay on this path of tightening this does not mean that they have resolved the issue. Rather, it likely means that the Fed is reacting a little too hard, a little too late and this will almost certainly pave the way for gold and silver investors. Read More
Federal Reserve chairman Jerome Powell is talking tough and warning of more interest rate pain to come. At the same time, Fed officials are now admitting that their sized-up rate hikes won't even be sufficient to tame the price inflation they have helped create.
That's because fiscal policy under the Joe Biden administration has gone off the rails. Read More
08.31.22- ‘King dollar’ surges higher as Fed presses ahead with rate rises
US currency is on cusp of third consecutive month of gains against peers
The dollar index has risen 14% since the start of the year Read More
Back in January I wrote a piece called, “Who’s Afraid of Jerome Powell?” Then I discussed the incipient wailing and gnashing of teeth coming from those terrified of a hawkish Fed. Our entire society has become so addicted to cheap dollars and easy credit that it created a “Ballers” mentality society wide. Read More
The hawkish tone of the Fed’s chairman Jerome Powell on Friday 26th was unequivocal. His most important sentence, in my view, was the following: “With inflation running far above 2% and the labour market extremely tight, estimates of longer-run neutral are not a place to stop or pause.” Read More
08.27.22- Fed Chair Jerome Powell Pledges to "Act With Resolve" to Beat Inflation
Markets are reeling in response to a hawkish speech by Powell at the Jackson Hole conference.
You're heard all the previews warning of disappointment.
You've listened to the under-card (Bostic, Bullard, and Harker all equanimously hawkish) Read More
08.25.22- The Great Deception
The Fed’s “magic money” game is about over! They try to fool the public into thinking they are sitting in a giant control center, making decisions, punching their keyboards, and controlling the economy. Happy days are here again, today, tomorrow and forever. Not to worry, the Feds got you covered. Cut the crap!
The central bankers at the Federal Reserve continue to talk tough about fighting inflation.
But is it a fight they can win?
The numbers say no.
After the CPI data cooled a bit in July, many observers expected the Fed to declare victory and begin pivoting away from tightening monetary policy. Instead, the central bankers doubled down on the tough talk. Minneapolis Federal Reserve Bank President Neel Kashkari said the Fed remains “far, far away from declaring victory” on inflation. Read More
08.23.22- Is the FED Setting
Politicians have taken advantage of every economic disaster since the Great Depression. In private back-room meetings, they exclaim with delight, “Never let a crisis go to waste." This revolting phrase goes all the way back to just after WWII. It’s credited to Winston Churchill, who at the time was working to form the United Nations. Read More
The Federal Reserve has been all over the news for months now, and today’s no different.
Anticipation that Powell’s Jackson Hole keynote will showcase his inflation-fighting resolve should depress equities in coming days. However, it’s hard to envision how he can successfully cause rates to reprice, and the speech will likely fall short of expectations.
It’s an article of faith among most analysts that inflation is too high and that it requires a significant tightening in financial conditions to bring it back to target. Furthermore, the 2023 Fed dots are 51bps higher than Jan. 24 implied Fed fund futures. Read More
08.18.22- We Are Witnessing a Global
It has been around six months since the start of the war between Russia and Ukraine. During this time, the world has keenly witnessed seismic shifting trends across economic, geopolitical and cultural lines. But perhaps the most profound impact the conflict has had (and continues to have) on the world is the acceleration it has inspired towards multipolarity—that is, global power more evenly distributed amongst several advanced economic nations rather than contained within a single hegemonic power, which in this case is the United States. Underpinning much of this acceleration, moreover, is the trend of de-dollarisation. Read More
In June, the Bureau of Labor Statistics (BLS) announced that the Consumer Price Index (CPI) had risen by 8.6 percent in the year to May. This was “the largest 12-month increase since the period ending December 1981.” What is causing this?
One common explanation is higher wages which, it is said, drive what is known as the “wage-price” spiral. CBS News recently carried a discussion between reporter Brook Silva-Braga and ‘What's Your Problem’ podcast host Jacob Goldstein that explained how this works: Read More
The endgame is to total control of the slaves with a cash-free system. Those at the top will fully control a central bank digital currency or CBDC, and once they roll it out, it’s game over for the slave class.
Executive Order 14067 signed by Joe Biden gives the ruling class the power to create CBDCs, distribute them at will, take them from you when they want, and just shut it off if you do something they don’t like. Read More
During the bear markets of the past 30 years, inflation pressures were subdued, and therefore, the record money creation of the past 10 years apparently did not cause a visible problem. Inflation lags money creation.
However, inflation has now broken out to the upside and hit the highs established in 1980 to 1982. If the Fed now were to stimulate the markets with another round of excessive money printing, for the purpose of avoiding a recession till next year, inflation would go to the all-time record high of 1917, which is when the CPI soared over 19%. Read More
The official consumer price index (CPI) gauge of inflation finally eased in July, slowing 60 basis points to an 8.5% annualized rate.
Now they are trying to convince us that dramatically higher prices are good news. Are you kidding me? Our standard of living is being systematically destroyed, and more Americans are falling out of the middle class with each passing day. The government just announced that in July the consumer price index was 8.5 percent higher than it was the previous July. Of course many have challenged the value of the inflation numbers that the government is giving us because the way inflation is calculated has been changed many times over the years. Read More
Even after decades educating Americans on economics and liberty, I’m still amazed by the number of people who have no idea what the Federal Reserve is or what they do.
Sometimes, if put on the spot, folks will hazard a guess.
“They’re a bank, right?” Sort of, but not really.
“They’re the ones who make the stock market go up.” While that’s true, it’s not their job to pull the strings on Wall Street. Read More
The Fed Has It EXACTLY Backwards
The Federal Reserve believes it hangs from the hooks of a horrendous dilemma.
To cage the inflationary tiger presently amok, it would likely plunge the economy into severe recession…
Yet if it navigates a wallowing economy away from recession, inflation will run and run and run. Read More
08.09.22- Global Planned Financial Tsunami Has Just Begun
Since the creation of the US Federal Reserve over a century ago, every major financial market collapse has been deliberately triggered for political motives by the central bank. The situation is no different today, as clearly the US Fed is acting with its interest rate weapon to crash what is the greatest speculative financial bubble in human history, a bubble it created. Read More
Flat Out Wrong
Jobs data reported this week by the Bureau of Labor Statistics show that, as of the last business day of June, there are 10.7 million job openings. Hence, according to the numbers, there are many more available jobs than willing workers. Read More
Before we get started today, I want to tell you a story about the former military dictator of Uganda, Idi Amin. During his eight years in power, the economy and infrastructure of the nation collapsed thanks to years of neglect and abuse. Amin took a familiar economic approach to his nation’s economic crisis – he had more money printed. In fact, he personally negotiated a print run of 2 million in banknotes with a British company – at the end of the negotiations, the company’s salesman asked how they’d be paid for this service. Read More
08.05.22- The Great Recession: Facts vs. Denials
Once again, the US is facing a recession which Main Street feels, Wall Street whistles past, and DC simply denies.
Below, we look at these recessionary forces and delusional policy makers in the context of blunt-speak rather than Fed-speak so that we can best prepare for what’s already felt but rarely spoken from on high. Read More
The world watched live last night Asia time as the news declared “The Nancy has landed”. Tweets flew about the Chinese closure of civilian airspace near Taiwan; of PLAN ships leaving port; of PLA jets in the air; and got footage of confused Chinese beachgoers looking a long line of PLA tanks trundling along in the sand. However, there was not an immediate military response - just China banning imports of Taiwanese biscuits. This saw a knee-jerk market relief response, meaning stocks and bond yields were both up. Read More
This week, Your News to Know rounds up the latest top stories involving gold and the overall economy. Stories include: The Fed needs a 9% interest rate, gold posts biggest gain since March, and Venezuela’s gold isn’t getting home just yet.
Economist: Fed has to keep rising rates, will look for 9% benchmark Read More
08.02.22- In The Eye Of The Storm
Will Powell pivot? And if so, when?
Bear market rallies can engender even more superlatives than those that accompanied stocks to their bull market peaks. “All is well! We have had the correction, and this is the start of the next bull market.” Read More
(Editor's Note: We have arrived at the point where the Biden Administration is a greater threat to America's well being than the evil machinations of the Federal Reserve. - JSB)
Many Americans may not be too concerned with what happens around the globe, because so many people take an overly simplistic view of international relations. What happens in Taiwan will in fact have an effect on all of us here in America and many people elsewhere in the world, in a litany of unexpected developments and consequences. Read More
In the past stock markets used to rely on the innovation and profit reports of individual companies, and while there were sometimes all encompassing events that would push equities in one direction or another, in the last decade there has been only one factor that ever really matters: The Federal Reserve.
The central bank has positioned itself as the ultimate arbiter of market rallies and corrections. In fact, most of the world is now placing all their investment bets on a single hope, that the Fed will capitulate on interest rate hikes, ignore the stagflation crisis and ramp up the printing presses once again with wild abandon. Read More
The US Fed continues to bring the big guns, raising rates another 75 bp (0.75%) on July 27, 2022. Even though they stated the economy is softening, current Inflation and CPI data suggest otherwise. The US Fed may be forced into another 75~100 bp rate increase next month if the US economy continues to show strong CPI and Inflation trends. There is only one other time in recent history like the current market environment – 1998~2004. Read More
07.28.22- Is the Federal Reserve
The Federal Reserve delivered another 75 basis point interest rate hike at its July FOMC meeting. This pushes the federal funds rate over the 2% threshold to between 2.25% and 2.5%.
The mainstream media emphasized the size of the hike. One headline called it “a second super-sized hike,” with many other mainstream pundits noting that it matched a June hike was the biggest since 1994. But it wasn’t as big as the full 1% hike everybody thought was on the table after we got June’s flaming hot Consumer Price Index (CPI) data. Read More
What the Fed says at Wednesday’s meeting is going to matter much more than what they do.
That, according to Bloomberg's Garfield Reynolds, will be the case even if Powell shocks us all by hiking less or more than the three-quarter point shift that’s been solidly priced in for most of the time since the June meet. Read More
Fed mismanagement creates huge opportunities for gold investors; gold did what it’s supposed to this year, and a Japanese perspective on gold as a safe haven.
Expert predicts $2,400 gold within 12 months
Gold investors shouldn’t look forward to a reversal in the Federal Reserve’s tightening policies because a flip-flopping Fed would create the kinds of economic instability that not even the biggest gold investors would appreciate. Read More
The Federal Reserve has declared its program of monetary expansion (formerly referred to as inflation) over in an effort to fight rising prices (currently referred to as inflation). As Murray Rothbard explained, “Government intervention brings about bank expansion and inflation, and, when the inflation comes to an end, the subsequent depression adjustment comes into play.” Read More
“If you’re worried about offending people and constantly thinking of that, you are not going to be very creative”
Legendary comedian John Cleese has warned that woke ideology has not only been “disastrous” for comedy, but is leading to the “death of creativity” in general.
07.22.22- Powell Seen Slowing Fed’s Hikes After 75 Basis Points Next Week
Federal Reserve Chair Jerome Powell is likely to slow the pace of interest-rate increases after front-loading policy with a second straight 75 basis-point hike next week, economists surveyed by Bloomberg said.
They expect the Federal Open Market Committee to lift rates by a half percentage point in September, then shift to quarter-point hikes at the remaining two meetings of the year. That would lift the upper range of the central bank’s policy target to 3.5% by the end of 2022, the highest level since early 2008. Read More
Currencies are the lifeblood of a nation’s trade and its economy. When a currency fails, the entire economy collapses.
Even so, most people rarely think about the health or buying power of the money in their pockets. They watch their bank balance, and their brokerage or IRA balance and are aware of their home’s value. They see those numbers change, but they never reflect on the value of the currency itself. Read More
As repeated in numerous articles and interviews, global central banks in general, and the Fed’s Jerome Powell in particular, have placed themselves and the global markets and economy in a trap from which there is no escape short of biting off their own feet, as they’ve had a foot in their mouths for years.
07.19.22- The Real Policy Error Is Expanding Debt and Calling It "Growth"
Waste is not growth, and neither are the unlimited expansion of debt and speculative bubbles.
The financial punditry is whipping itself into a frenzy about a Federal Reserve "policy error," which is code for "if the music finally stops, we're doomed!" Read More
Consumers think inflation still has to boil over before it cools, according to the Federal Reserve Bank of New York’s latest read on people’s economic expectations.
As Americans are painfully aware, inflation is the highest in 40 years prompting The Federal Reserve to remove the massive punch bowl. In fact, Federal Reserve Governor Christopher “Fats” Waller backed raising rates by 75 basis points this month. Read More
07.15.22- "Take The Tragedy In Sri Lanka And Multiply By Ten": The Fed Just Lobbed A Financial Nuke That Will Obliterate
I recently saw a survey that reported the majority of Americans, regardless of their political affiliation or income level, agree that inflation is their number one concern.
That’s not surprising. An 8.6% destruction of your purchasing power every year is bad enough – but if we used the 1980-based inflation measurements, we learn that inflation is likely about double the official number. Read More
07.13.22- Inflation terror at the Fed
California Democrat Governor Newsom intends to phase out gasoline powered cars by 2035 and replace them with battery powered cars that have to be continually recharged with electricity. Currently, there is insufficient electricity available to California to safeguard California from brownouts at current usage. In the meantime California’s last nuclear energy electricity plant faces closure. It is completely unclear how California is going to have enough clean electricity for its electric-only cars. A safe conclusion is that California is headed for an unmanageable energy crisis. Read More
07.11.22- The Fed Is Afraid of Inflation and Tightens Its Hawkish Stance
The Fed gives no illusions: it will maintain its hawkish stance. Meanwhile, gold plunged decisively below $1,800, which has bearish implications.
Yesterday (July 6, 2022), the FOMC published the minutes from its last meeting, held in mid-June. Although the publication reveals no major surprises about US monetary policy, it shows rising worries within the Fed and also strengthens its hawkish rhetoric. Read More
“Gold to central bankers is like the sun to vampires."
This week an intriguing and eye-opening article by the well-known Peter Hambro was published by British economics and politics news site Reaction. Read More
07.08.22- And Now, for Something Entirely Different: A Great Endeavor
This birthday of the republic we are on track to going medieval, or something that at least rhymes with it….
I wish I had a time machine. I would teleport a small delegation of Ben Franklin, Tom Jefferson, and Button Gwinnett from their sweltering labors at Independence Hall — then known as the Pennsylvania state house — to a Drag Queen Story Hour hosted by Lil Miss Hot Mess (“The People’s Drag Queen”) reading from her best-selling book, The Hips on the Drag Queen Go Swish, Swish, Swish, to a roomful of six-year-old offspring birthed by America’s current Progressive ruling elite. Here, I would explain, is what it has come to. Read More
“ The world is a concept that requires constant juggling…”
Don’t be distracted by the antics in Westminster – there is a major market shift going on between the End of the World being triggered by Inflation, or Recession destroying everything. Relax. European Energy policy will probably kill us! Read More
07.06.22- The Trolley-Car Problem, Part 1: The Fed's Predicament
An unstoppable trolley car is barreling down the track. As the switchman, you stand at the junction where the track branches into two and you must choose which path the trolley will follow. Unfortunately, people are tied to both tracks, making the decision incredibly difficult.
The trolley car problem is an ethical question that forces one to choose between two poor consequences. Read More
07.05.22- The Federal Reserve’s Policy Is Mistaken
Normally, recessions are the result of a reduction in liquidity by the Federal Reserve, the central bank, which is signaled by a rise in interest rates. Normally, recessions are short-run affairs of 6 to 9 months. Unemployment, which is as costly in its way as inflation, causes the Federal Reserve to relent and to increase liquidity, which is signaled by a reduction in interest rates. Read More
Central banks are looking to the renminbi to diversify their foreign currency holdings, in a sign that a geopolitical flare-up could take away the dollar’s dominance.
The proportion of central bank reserve managers who have invested in, or are interested in, renminbi rose to 85 percent this year from 81 percent last year, according to an annual survey conducted by UBS among 30 major central banks. done accordingly. April and June 2022. Read More
As you might imagine, the last time I talked to the team at Birch Gold Group, the topic of inflation came up. I think this is a crucial matter for every American to understand. Let me start with a fact about how money used to work. According to Michael D. Bordo, professor of economics at Rutgers University: Read More
06.29.22- The risk of a flip-flopping Fed
Well-informed Fed with a credible vision for the future minimises the risk of disruptive financial market overshoots
The markets are evolving their minds about US economic prospects just as the Federal Reserve has been scrambling again to catch up to developments on the ground. Read More
In the past month we showed readers on at least two occasions...
The recent outbreak of price inflation with the jump to an annual rate of 8.6 percent in May 2022 came as a surprise to the US central bank (the Federal Reserve). Having ignored the warnings of the Austrian school economists, the policy makers were paralyzed in the face of a phenomenon they deemed impossible to happen. None of their forecasting models had triggered an inflation alert. Read More
Aside from being the “tax no one voted for and everyone pays,” historic inflation accelerating to levels not seen in over four decadeshas serious consequences. One of those consequences is the near-certain probability of a major recession, resulting from attempts to “cool off” inflation. Read More
The Federal Reserve’s recent 0.75 percent increase in its “benchmark” interest rate is the Fed’s highest rate increase since 1994. This increase is a sign that the Fed has finally realized that price inflation is more persistent and widespread than the Fed initially believed.
Stocks have fallen much lately. This is in part because of fears rate hikes will push the economy into recession. The Fed itself seems to believe that the economy is going to slow down in the near future, as it has reduced its projection of 2.2 percent economic growth in 2022 to 1.7 percent. Even more ominously, the Atlanta Fed’s GDP tracker fell to zero for the second quarter of 2022, due in part to May’s weak retail sales. Read More
06.22.22- A big test of Powell's support
It’s a short week, but it’s shaping up to be another extraordinary one, as Federal Reserve Chair Jerome Powell heads to Capitol Hill for his semi-annual congressional testimony, just days after he oversaw the biggest interest-rate increase since 1994.
He’ll testify before the Senate Banking Committee first on Wednesday, then the House Financial Services Committee on Thursday. Read More
Never forget – NOT allowing price discovery for a long period of time - then forcing the process onto markets with a “bayonet in the back” - at an ever-accelerating rate - is a virgin-central bank experiment. It comes at a high price. Never happened before. Read More
06.20.22- Our Economy In a Nutshell
The economy has reached an inflection point where everything that is unsustainable finally starts unraveling.
06.18.22- No, Inflation Is Not A Product Of Corporate Greed
Seventeen months ago, as the keys to the oval office changed hands, for all of the political animus and theatrics, one thing seemed a given: the US economy would roar back to vitality in historic fashion, a point of optimism in a nation of discord and incertitude. Yet hope would give way to ambivalence, which, in turn, gave way to serious doubt. Today, a pathetic 23 percent of Americans feel economic conditions are even “somewhat good.” The primary reason for such abysmal economic sentiment? Inflation. Read More
06.16.22- Buckle Up, Things Are About to Get REALLY Nasty
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. Read More
The CPI inflation data last week came in at a new high of 8.6% on June 10 “officially”, reaching another 40-year high. However, we know that true inflation is actually about twice that high. Everything reported nowadays is fake, false, and outright lies now a days.
Analysts continue to tell gullible investors we are near “peak inflation” and that it will decline from here. They are either dumb or intentionally dishonest. Read More
We heard it for the past couple of years - Inflation is merely "transitory." Government and central banking officials as well as the Biden White House were in full spin mode on rising prices and the decline in the dollar's buying power while the mainstream media backed them every step of the way. As a result, the public was grossly misinformed on the dangers ahead. Read More
06.13.22- What Is Stagflation
The occurrence of stagflation is associated with a situation of general strengthening in the momentum of prices while at the same time the pace of economic activity is declining. A famous stagflation episode occurred during the 1974û75 period, as year-on-year industrial production fell by nearly 13 percent in March 1975 while the yearly growth rate of the Consumer Price Index (CPI) jumped to around 12 percent. Read More
I arrived back to Mexico a few days ago, because, the big news in my life is that my wife and I are expecting our second child. It’s a boy.
There isn’t any doubt, when inflation accelerates like it is right now, the lower income class has their financial worlds turned upside down. After all, that’s what happens when most of the food that we eat and fuel we use every single day suddenly becomes 10% – 43% more expensive.
06.08.22- Are Supply Chain Issues
A recent New York Times poll finds that Americans disagree about the cause(s) of inflation. The poll lists several supply-chain explanations, including supply-chain disruptions, COVID-19, and the Russian invasion of Ukraine. On the surface, these supply-chain explanations seem plausible. When goods become more scarce, their prices rise. But there are at least two problems with the supply-chain narrative. Read More
06.07.22- Respect the Fed? No, End the Fed
President Joe Biden has unveiled a three-part plan to fight inflation — or at least make people think he is fighting inflation. One part of the plan involves having government agencies “fix” the supply chain problems that have led to shortages of numerous products. Of course, any attempt by the government to solve the supply chain problems (which were caused by prior government interventions such as shutting down the economy for over a year) will not just fail to solve the supply shortages but will create new problems. Read More
“Since central bankers are enacting monetary policy by acting like market participants, let’s analyze them like investors,” said Lindsay Politi, PM for One River’s inflation-strategy.
“Central banks are the biggest whale in financial market history. And we’ve all seen what happens when a whale needs to exit. The catalyst is always an unaccounted risk, a surprise event, or an incorrect assumption,” said Lindsay. “Whether it’s a margin call that can’t be met, a risk officer shutting it down, or client redemptions; there’s a point where every ordinary investor is forced to liquidate.” Read More
I want to stress a very important point first and foremost, because I don’t think the political left and the average gun grabber understands the gravity of the situation and they need to be educated:
Liberty advocates will NEVER give up their guns. It’s not going to happen. We have drawn a line in the sand when it comes to the 2nd Amendment and we are not going to move, not even an inch. It does not matter what legislation or executive orders Joe Biden promotes, and it does not matter if there are future criminal events involving firearms. Read More
06.03.22- WARNING: The “Fed Pivot” Is A Lie
It’s total nonsense, so let’s dive into this a bit more…
The financial media is pushing the narrative that the Fed is about to “pivot” in terms of inflation.
Put simply, the argument is that inflation has peaked, so the Fed won’t need to raise rates by 0.5% past the month of September, at which point it will either PAUSE raising rates or continue to raise them albeit at a slower pace of 0.25% per raise. Read More
06.02.22- The Fed Created the Next Recession
The long-term driver of inflation, and the reason we have so much inflation, is the fact that we printed six and a half trillion dollars in 48 months and grew the money supply by 40%. That is simply what's driving all of this, and all of the other things are just sort of add-ons to the supply chain. Is Russia's invasion of Ukraine driving some of it? Yes. Is that the main driver? No. The longer-term structural issue is the fact that we grew the money supply by six and a half trillion dollars. That's what's driving inflation at the end of the day. It takes 12 to 18 months for all that government spending to get into the system. Read More
To say that current events are ‘messy’ today would be the height of understatement. Everyday the headlines blare at us some new set of contradictory data points convincing us of some lie that serves someone’s purpose.
No matter how hard we try to keep up with things, cutting out the extraneous to find the nuggets of signal from the jungle of noise is more than a full-time job. Read More