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…
As Mohamed El-Erian said best: “The Fed has no good scenarios left.”
This blunt point simply can’t be repeated enough.
Candor (and Debt) Matters
With global debt at $300T+, and combined U.S. corporate, household and public debt well past $90T, the Fed’s “face-saving” attempt to raise rates (even to the unsustainable level of say 4%-5%) as a weapon against 9% reported (i.e., under-rated) CPI inflation is a failed strategy from the start.
In fact, it is delusional at best, and more likely dishonest at worst. Full stop.
Simply stated, an historically debt-soaked market, economy and government addicted to years of artificially repressed free money can’t suddenly afford a meaningful rate hike (i.e., expensive money) without a fatal string of credit defaults, from investment grade to sovereign bonds.
Facts Portend the Future
Toward this end, we’ve dedicated years to fact checking, BS-detecting and calmly disclosing a long string of open rigging, lies and errors masquerading as policy which have poured from the lips and policies of figures like Greenspan, Bernanke, Yellen and Powell.
Despite the stubborn honesty of such facts and dishonesty of our bankers, many FOMO investors have clung to the cognitive dissonance of believing central banks had their backs—and their markets and currencies in eternally safe hands.
Now, as the transitory inflation lie has broken the credibility of these lost shepherds and the faith of their sheep, the financial word is facing the first chapters of a global “uh-oh moment” (i.e., geopolitical risk, falling markets, debased currencies, failing leadership, and increasing social unrest), the inevitability of which we’ve warned in two published books and countless reports.
Most reading this, of course, are not among the sheep nor the surprised. Yet even for you and us, the continued hubris, ignorance and dishonest desperation of our so-financial “leadership” never fails to astonish.
Let’s see why.
Apparently, Powell is afraid of going down in history as the next Arthur Burns.
Not surprisingly, he appears more pathologically concerned about his personal legacy than the fatal legacy he and his predecessors have left the inflatio- sick nation after inflating the Fed balance sheet from $800B pre-08 to over $9T today.
Free Report: Top 5 Gold Stocks for a Bear Market
There’s still plenty of upside ahead for gold stocks.
Goldman Sachs says gold could run to $2,500 by the end of the year-especially with fears of a potential recession. And, according to Jeff Currie, Goldman Sachs global head of commodities research, as quoted by Bloomberg, “It’s a perfect storm for gold right now.”
So, where should we invest? Try these.