The particular Fed insists it can tighten monetary policy and tackle inflation without hurting the economy.
Federal Reserve Leader Jerome Powell and other main bankers claim the economic climate is strong enough to handle higher interest rates. Peter Schiff stated this is just another in a lengthy line of arrogant miscalculations from the Fed.
Since the central bank begins to raise rates and gets set to shrink its balance sheet , a few analysts worry that the Given will make a mistake and tighten too much. But Peter mentioned the Fed already made the mistake.
“ It’s not about the Given might make a mistake. They’ve already made nothing but mistakes. The Fed has never done anything right. And because they made so many mistakes in the past, they’ve already doomed us later on. It’s not about the mistakes they might make. It’s about the mistakes they’ve already made. ”
And Peter mentioned given all of the mistakes the central bankers have made previously, it seems certain there will be a lot more mistakes moving forward.
“ The mistake they’re going to make in the future is not tensing too much, but not tightening sufficient — bowing down to the particular political pressure once the economy really starts to tank as well as the markets are deep within bear-market territory. When the Given takes its foot off the brake and slams it back on the gas, that’s when the economic climate is going over a cliff mainly because inflation is going to run out associated with control. ”
Peter pointed out the recent plunge in speculative stocks and said it had been a function of the errors the Fed has already produced.
“ 2021 was peak madness caused by the most reckless of all monetary policies by the Given, which created the mother of most inflation. And now the Fed wants to try to put the einstein (umgangssprachlich) back in the bottle. It doesn’t want to accept any responsibility for having allowed the genie from the bottle. It wants to blame it all on Putin. It wants to blame it all on COVID. But it thinks that is a simple task to unnecessary the damage. All they’ve got to do is jack rates online backup to 2 . 5, 3%, get there quickly, and because we now have such a strong economy using a super-hot labor market, the particular Fed can do today what never could do in days gone by because the economy now is a lot stronger than it was during the past. Well, it’s not stronger. They have just a bigger bubble. ”
But the central bankers at the Fed don’t seem to understand that.
“ Actually probably the only thing that is bigger than this bubble will be the egos of the FOMC associates and how clueless they are about economic reality. ”
The Fed has a horrible track record. Fed Chairman Jerome Powell has been wrong, wrong, and more wrong . But it’s not just Powell. The particular Fed has a long history of missing the mark.
In 2006 plus 2007, the Fed was adamant there was no problem in the housing market. When it became clear there is a problem, the central brokers said, “ No worries, that it is contained to subprime. ” When the financial markets crashed in 2008 and the Given started quantitative easing, Ben Bernanke mentioned the central bank was not monetizing the debt and that it would sell all of the bonds it was buying after the emergency was over. Throughout the pandemic, they said printing trillions of bucks wouldn’t cause consumer prices to rise . When pumpiing reared its ugly head, they promised it was transitory. Now they’ve conceded not necessarily transitory, but assure us they can fix it. They say they can raise rates without hurting the economy.
So , why should we believe them?
Peter said he thinks that it is “ three strikes and you’re out. ”
“ Hit one – subprime included. Strike two – pumpiing is transitory. Strike three – we can raise interest rates. The economy is sufficiently strong to withstand it. I think all the Fed’s credibility is going to be lost when that mistake can be revealed. ”