What is the Fed Hiding?

28 Oct

What is the Fed Hiding?

Something is up at the Federal Reserve.  Consider this:

The inflation that Fed officials didn’t foresee and then called merely transitory has become a problem…  for Fed officials.  We can safely predict that Chairman Jerome Powell will not be appointed for another term in February.  The inflation debacle is one reason.

His predecessor at the helm of the Fed, Janet Yellen is not taken seriously by anybody.  For several reasons.  One reason is the inflation debacle.

yellen printing money
Janet Yellen, former head of the Federal Reserve

If the Fed is feeling the heat from the inflation debacle, why doesn’t it stop inflating?  That is the heart of the mystery.

Both Powell and Yellen now say that the inflation debacle will continue into next year.  Yellen says until the middle of next year.

Nobel-prize-winning economist Milton Friedman pointed out that there is a lag between increases in the money supply and it showing up in consumer prices.  He said in the 1960s that lag was some six to nine months.  Today some say the time lag is longer.  

But the Fed continues to print money today.  If inflation is a problem today, and Powell and Yellen see it continuing into next year, why don’t they stop now so we can be done with this inflation plague?

Real Investment Advice asks the same question in a pointed way: “What is the Federal Reserve Hiding From Us?”  It cites hedge fund manager Paul Tudor Jones on CNBC calling this “the most inappropriate monetary policy that I’ve seen maybe in my lifetime.” 

What is the Fed hiding?

RIA offers two suggestions.  First of all the stock market bubble.  The Fed is afraid of the stock market’s fragility.  “The last thing the Fed wants to do is pop a bubble, especially since they blew it up.”

The other is the debt bubble.  It, too, is fragile and the Fed knows it.  “Without extremely low-interest rates to make the new and existing debt affordable, economic growth would disappear, and financial defaults would be plentiful.”

In other words, the Fed is like a junkie that has to have another fix.  Withdrawal is too painful.  So the printing presses roll.

But the stock and bond market bubbles will pop, just like the junkie needing ever bigger doses will eventually overdose.

The Fed, the US government, and Wall Street are addicted to easy money.  The only thing you can do to avoid the coming monetary calamity is to get out of the way.  

You do that with gold and silver.  Speak with a Republic Monetary Exchange professional today.  Make sure you have limited your exposure to the reckless behavior of the monetary addicts.