Four years back the overall sentiment among the majority of alternative and mainstream economists was that the Federal Arrange would NEVER hike interest rates, taper stimulus or reduce their balance sheet into economic weakness.
In fact , this was mostly of the viewpoints that the mainstream mass media and independent economists actually agreed on. A few of us had different ideas, though.
The argument is founded on a dangerous assumption – That the Fed’s goal is solely to prop up and expand the lifespan of the ALL OF US economy and stock marketplaces. If you have been tracking equities within the Dow or the Nasdaq for the past decade, then that might appear to be a safe bet. For several years the central bank provides consistently added stimulus or cut rates whenever stocks and shares started to drop more than 10%, and this is what launched that famous investor mantra “ Buy The F’ing Dip. ” It was a sure thing; all you had to do was buy stocks after a correction of around 10% and the Fed would come in to save the day with more inflationary QE.
However , things modify and it is foolish to imagine the Fed actually cares about maintaining the US economy. If they did care, they will not have tried to hide the particular inflation threat for such a long time. Hiding it hurts the united states far more than admitting into it as soon as possible.
The position on the Fed is equivalent to it has always been: The Government Reserve is a suicide bomber. It is a useful weapon for the globalists at the BIS, the particular IMF, the WEF, and so forth Those globalists want a brand new financial crisis so that they can implement global changes to the method money works and the way various nationwide economies function (the Excellent Reset). They want a single global financial authority and a 1 world digital currency system. They want to be able to dictate every trade around the planet using a single mechanism.
In order to achieve these ends, they need the Fed to explode the US economy, and that is exactly what they have done; most people simply don’t realize it yet.
As I noted in my article ‘ The particular Fed’s Catch-22 Taper Is A Weapon, Not A Policy Error’, published a year ago:
“ If the Fed raises rates of interest into weakness and tapers asset purchases, then we might see a repeat of 2018 when the yield curve began to flatten. This means that short term treasury bonds will end up with the same yield as long term provides and investment in long term bonds will fall. The dumping of long term provides causes a decline in currency value and a flood associated with dollars back to the US. Outcome? Inflation.
No matter what the Fed does the consequence will be inflationary/stagflationary. The only difference is that when they taper there will also be an immediate decline in stocks as well as the overall crash will happen faster. The presumption by some is that a reversal within stocks will lure more money into the dollar, and this might happen for a short period of time. However , as stated if the yield curve flattens or there is instability in Treasury bonds there will be simply no saving the dollar either… ”
The only question was one of timing. When would the particular Fed try to pull the particular plug and allow the inflationary disaster to unfold with out hiding it any longer? Well, now we know…
As I are actually predicting , the Given is embarking on an active advertising campaign to hike interest rates simply by 50 bps or larger per meeting (including possible emergency meetings). Despite the hawkish tapering presented by the Fed, CPI prints continue to rise and now global bankers (and even Joe Biden) are suddenly admitting that inflation is striking crisis levels after claiming all last year that the issue was “ transitory. ”
Some people of the Fed have searched for to temper concerns regarding high rates by declaring that these hikes will be restricted to around 2% – 3%. This is likely a rest. The jump in the US cash supply and the level of inflation I see indicates that interest rates of 2% to 3% will do NOTHING to stop the particular crisis. The true inflation information collected by tracking sites like Shadowstats. possuindo also facilitates this position. The Fed uses the ongoing price increases and stagflationary pressures being an excuse to continue hiking prices well beyond 3%.
The money supply concern is key here, because the Fed does not acknowledge price inflation so much as they use money supply as their rationale to get changing policy.
It’s not a rule however it is certainly a habit that the Fed likes to change the way they will calculate inconvenient economic stats whenever there is a major turmoil. They changed the way inflation was measured in the 1980’s after the near disaster under Jimmy Carter (not his fault really, it was Nixon and the Fed completely eliminating the dollar from the gold standard a few years earlier that truly caused it). They have furthermore changed the way GDP is definitely adjusted multiple times, and they have transformed how official unemployment is usually reported. In most cases, these changes are designed to HIDE a problem instead of trying to gain more accurate data.
For example , the Fed ended its reporting of M3 , which is a more fine tuned measure of the total money flow of US dollars circulating around the world (they claimed M2 has been just as good). This measurement was inconvenient to the Fed because inflationary policies are ever present and precise reporting might cause “ alarm” within the American public. So , they simply stopped producing the data available.
Maybe it’s just a coincidence, but the Fed ended M3 in 2006 right before the particular credit crisis of 2007/2008 began, and right before they will introduced tens of trillions of fiat dollars in bailouts and QE stimulus. 1 might think they KNEW a debt implosion was coming and that massive inflationary policies would be the response…
Another change has been conducted to M1 and M2 calculation (a less accurate measures of US money supply), and this had been done in 2020 , right in the midst of the covid pandemic response. Strangely, this time the Fed’s changes involved including savings deposits from smaller accounts to the overall cash supply data, which means the particular reported money supply jumped substantially.
Exactly why did they do this? I have a couple theories.
Theory #1: In 2020 the particular Fed was already in the midst of one of the most pervasive stimulus programs since the bailouts of 2008/2009. These people created over $6 trillion in new money in a single year, and that’s just the official number, not accounting with regard to overnight loans and other applications. This money was shot directly into the general economy plus into average people’s balances, as well as into the coffers of international corporations.
It is possible the Fed transformed how they calculate M1 plus M2 because they wanted to hide the true amount of dollars they were creating from thin air. If you try to make the argument the Fed caused our current inflationary crisis, and you use M1 or M2 as an example of this, the central bankers can now say “ Hi, that big jump in the money supply is not because of our fiat printing, we added savings accounts towards the calculation and that’s why it’s so high. ”
Of course , then you would have to believe that the dollars being kept in small savings accounts across the country is enough to grow the total money supply by FIVE TIMES. Yeah, I don’t think so. To summarize, the Fed changed its data reporting in a negative way on purpose in order to obscure the role they are playing in the inflationary disaster now unfolding.
Theory #2: The central bank WANTS to increase interest rates into economic some weakness without argument. So , these people adjusted the money supply calculations to be slightly more honest. Whether this giant leap within M1 and M2 within 2020 is due to savings accounts being added or because of elicit Fed printing will not matter. The point is, the Fed intends to jack up interest rates and taper in the extreme while GDP and Retail are in decline and while wages are becoming stagnant. It’s the same task the Fed did at the onset of the Great Depression, which made the depression far worse than it would happen to be otherwise.
That is to say, the Fed is seeking to sabotage our economy, however they need the data to justify their actions. They need the information to more honestly reflect the inflation threat so that they can hike rates and taper into economic weakness whilst avoiding any blame for your inevitable consequences.
In either case, the Fed’s actions suggest that inflation is going to keep on unabated, they know this is going to happen, and they are simply positioning themselves to deflect blame.
The particular argument among independent plus mainstream economists alike will be that the Fed can “ capitulate” and reverse course on tapering as soon as they “ realize their own error. ” Sorry, but the central bankers are well conscious of what they are doing. I believe some liberty movement people want to believe the Given will continue stimulus procedures because they want the silver and gold market price to go up.
Don’t worry, prices will go up eventually because there is absolutely no chance that the Fed will minimize inflation/stagflation with a 2%-3% interest rate hike. Also, as the financial war with the East continues to heat up, nations like the BRICS will continue to dump the dollar as the world reserve. The physical price of gold and silver will decouple from the manipulated paper ETF price. It already happened in 2020-2021, and it will happen again soon.
Mainstream monetary commentators want to believe the Fed will capitulate because they desperately want the party in stock markets to keep, but the party is over. Certain, there will be moments when the markets rally based on nothing more than a word or two from a Fed official planting fake hopes, but this will turn out to be rare. Ultimately, the Given has taken away the impact bowl and it’s not coming back. They have the prefect reason to kill the economic climate and kill markets in the form of a stagflationary disaster THESE PEOPLE CAUSED. Why would they will reverse course now?
Just remember WHO is really to blame for the mess since prices continue to spike and the economy destabilizes. There needs to be a reckoning, and central bankers should not be allowed to escape without punishment.