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By Gregory Mannarino, TradersChoice.net
Just this past week in a highly anticipated announcement by the Federal Reserve on Wednesday, it was stated that the Federal Reserve will maintain its current rate of asset purchases at a minimum of $120 Billion dollars a month—NO CAP. They will also keep their FFR, (Federal Funds Rate), target of 0.00-0.25. The Federal Reserve also maintained that it is “closely watching inflation.”
Today here in the United States inflation is rising at its fastest pace EVER! Meanwhile the Federal Reserve is continuing its scheme of issuing debt through one door and then buying it via another door—a massively inflationary mechanism.
What “spooked” the market last week was the possibility that the Fed, to keep inflation from getting out of control, will need to raise rates sooner than later. The prospect of the Fed having to raise rates sooner than later sent the dollar value markedly higher, which put pressure on stocks, gold, silver and crypto. With that, J. Powell said that the Fed target for “lift off” regarding a tapering off of debt purchases by the Fed, would be in 2023. But just this past Friday, Fed President James Bullard said that the current historic rise in inflation may force the Fed to raise the FFR next year, and stocks again fell under pressure sending the dollar higher.
It seems that the market does not fully understand what is going on here. The Fed is not done in any way, shape, or form, regarding its asset purchase program and deliberately stoking inflation. NONE OF THIS IS BY ACCIDENT. The Fed will continue to inflate.
Over the weekend we heard from Federal Reserve President Neel Kashkari—the Lex Luthor of the Federal Reserve, and he said “there will be no taper regarding asset purchases by the Federal Reserve until AT LEAST 2023.
I personally believe that regarding asset purchases, tapering, or “lift off,” that when it gets down to the wire—the Fed will move goalposts out farther and farther.
Even in a hypothetical, IF the Federal Reserve were to taper sooner than later what does it mean?
Even if the Fed were to raise the FFR even a quarter of a percentage point, the Fed would still be inflating on a historic scale, keeping rates artificially suppressed, creating trillions of dollars out of thin air, and buying assets. All of which remain highly inflationary, stock market positive and dollar negative.
Understanding the current environment, we can expect inflation to continue to gain momentum to the upside.
The Federal Reserve is determined to exacerbate a currency crisis, for which we are in one now. To counter this, we need to be putting our cash to work in anti-debt instruments like Gold, Silver, and still in my opinion, taking advantage of the recent drop in the price of Cryptocurrencies. We should also be buying any dips in the stock market.
Goldman Sachs, a Wall Street Superbank, is now advising its clients to “buy commodities.”
Still, my favorite hedge in the current environment remains PHYSICAL SILVER.