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By Gregory Mannarino, TradersChoice.net
If you were to follow any of the mainstream media financial news outlets, the narrative is this: “The Fed is going to be cutting back on asset purchases.”
How About No.
The Federal Reserve WILL BE INCREASING its asset purchases! Not tapering. Central banks of the world are working in unison to “Own It All.” To be the lenders and buyers of last resort. At the G7 meeting of world leaders last week – every world leader has promised to continue to stimulate their respective economies. So, where does all the “stimulus” cash come from? Their respective central bank.
Just last week the European Central Bank (ECB) announced that it will be INCREASING asset purchases, NOT tapering or cutting back – NEWS FLASH! The Federal Reserve WILL follow suit. Today the Federal Reserve’s balance sheet crossed $8 Trillion Dollars! This astronomical number is higher than the GDP of most nations on Earth. Even with that, the Federal Reserve’s balance sheet is going much higher – it is their end game, their over century long plan to own it all. Therefore, the Federal Reserve will continue to inflate.
When the Federal Reserve’s balance sheet hit $4.6 Trillion, I said publicly that their balance sheet would double, well, we are there. And I have another piece of information for you- this $8 Trillion is going beyond $10 Trillion in short order.
The mechanism of the Federal Reserve’s asset purchasing program is massively inflationary. The Fed will continue to issue debt through one door, and they buy it via another.
You can also expect that this inflation creation mechanism will continue. It will continue, BY DESIGN! Leading to a full-blown currency crisis… Personally I believe we are in a currency crisis right now, but it will get much worse.
Moving forward.
The effect of the Federal Reserve maintaining its current monetary policy, and in fact clandestinely expanding it, is enormously stock market positive, commodity price positive, and dollar negative. The Federal Reserve is determined to push the Federal Funds Rate (FFR) to ZERO and keep rates artificially suppressed for the foreseeable future – this mechanism forces cash into risk assets creating opportunity.
Opportunities to capitalize on the Federal Reserve’s actions are plentiful.
Understanding that, what the Fed is doing, is stock market positive – for now, tells us that we should be in equities, more specifically energy and financial stocks. We also need to be taking advantage of the HYPER-debt environment, and you do this by holding hard assets like gold and especially silver.
Take advantage of the current drop in the price of cryptocurrencies.
I have been a major bull of cryptocurrencies ever since I recommended publicly for people to buy Bitcoin at around $3K, and although this space has taken quite a hit lately – in the current environment I see a major buying opportunity.
The bottom line is this. Central banks are about to inflate faster moving forward, and the Federal Reserve has ZERO intention to taper/cut back on asset purchases anytime soon, so take advantage of it.