Fed Turns Even More Left
This would be a very good time to park your wealth in gold and silver!
Well, we missed the boat on that one!
We ventured a month ago that President Biden would not reappoint Federal Reserve Chairman Jerome Powell for a second four-year term.
Our reasoning was simple enough: Powell would be made the fall guy for the inflation that has the American people very unhappy.
It is actually disappointing that the Biden administration doesn’t feel someone should take the blame for consumer prices up 6.2 percent and wholesale prices up 8.6 percent over the last 12 months.
It’s almost like they don’t feel inflation isn’t bad enough to need a fall guy. It’s true that many in the governing classes aren’t feeling the pinch the way that regular people are. Some of them have been saying that inflation is good for us.
There was more to our guess that Powell would be out. The scent of the Fed’s insiders trading scandal is floating around the Marriner Eccles building and maybe even around Powell, too.
And there was one more thing. Have you noticed that the Biden team always prefers the left-most alternative? You don’t have to look too closely to see that a lot of their nominees – like Saule Omarova for comptroller of the currency – are way out in left field.
So, Biden could have turned to the progressives’ preferred candidate, Lael Brainard. If you don’t think Powell is inflating enough, she’d be your pick. Although it would be quite a feat to out-print Powell. Since he took office in February 2018, the Fed has printed a heretofore unthinkable $4.25 trillion dollars.
Ultimately though, Wall Street wanted more of Powell and Wall Street generally gets its way. With all that money printing, Powell has been as good for them as baseball has been for Chico on Saturday Night Live.
Still, some think Biden will make Powell the fall guy if the democrats get shellacked at the polls in 2022.
Biden will soon be able to fill three more seats at the Fed. In the meantime, Biden is signaling a hard left turn at the Fed. He named Brainard Vice-Chair, making her the heir apparent when Powell goes. Popular blogger Michael Shedlock, MishTalk, says, “One way or another, Progressives rate to get their wishes for more regulation as well as more climate activism. Look for the supposedly independent Fed to turn markedly Left.”
Meanwhile, the president said Powell’s reappointment would enable them to attack inflation. If you are waiting for the Fed to stop inflating, you’d better park your wealth in gold and silver while you wait.
It’s going to be a very long time.