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In The Bronx, there is a saying: “Bullshit has its own sound.”
While we have long been forecasting that inflation pressures would continue to rise, we kept noting that Federal Reserve chair Jerome Powell and the rest of the Bankster Gang had been spewing out bullshit for most of the year claiming that inflation was “temporary.”
Now, finally, with inflation rising higher across the economic spectrum, Powell told the Senate Banking Committee yesterday that inflation was moving up higher because of longer-than-expected supply chain disruptions and reopening pressures, “These effects have been larger and longer lasting than anticipated, but they will abate, and as they do, inflation is expected to drop back toward our longer-run 2 percent goal.”
And he gets away with this crap.
The Fed Banksters are not stupid. They knew inflation was rising.
They are a brilliant scam artist Gang that knows how to rig markets and get rich from doing it.
Need more proof?
How about the two Bankster Gangsters, Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren who both resigned yesterday following reports of their playing the markets in alleged violation of ethics rules.
Indeed, to believe Banksters have “ethics rules” is an oxymoron that only a moron would believe.
As we have reported, the recent ethics outcry over stock trades by Robert Kaplan, who worked with Goldman Sachs for some 20 years which we detailed in “Bankster Bandits Get Rich Playing the Inside Track” (14 Sep 2021), were foretold by information in his financial disclosure forms covering 2020, that Wall Street on Parade reported.
Documents show that he had made “multiple” trades of more than $1 million in S&P futures. Kaplan also had at least $1 million in an S&P exchange-traded fund, which trades during market hours.
So, more than $1 million in an S&P exchange-traded fund can mean a hundred million.
As for Rosengren, he traded in and out of REITs last year in amounts of $1,000 to $50,000.
Again, the point being, the Fed Gang is not stupid.
They understand data and numbers and know how to play the game. Thus, they fully knew that inflation was rising higher.
As we had been forecasting, they kept lying about inflation being “temporary” because the higher inflation rises, the more pressure on them to raise interest rates.
And, as we have forecast, when interest rates rise from near zero to 1.5 percent, the equity markets, housing market and national economy that have been artificially propped up with cheap money… will crash.
Gregory Mannarino has been on top of the Fed fraud pitch on inflation and in this week’s article, “Expect A Second, Larger Wave of Inflation to Hit,” he makes it clear that the worst is yet to come.
Mr. Mannarino says Fed chair Jerome Powell’s claim that “The current spike in inflation is transitory… is being used as a tool to suppress the truth, and the truth is this. Not only is the current pace of inflation NOT transitory—but it is also about to get much worse.”
And in a recent interview with Robert Kiyosaki and Kim Kiyosaki on their Rich Dad Radio Show, Gerald Celente made it clear where inflation is going: “Inflation is REAL: New World Disorder” (Watch the interview here.)
PUBLISHER’S NOTE: The Fed has lost its last shreds of credibility.
From its highest officials trading stocks and futures on inside information, as we disclosed in “Bankster Bandits Get Richer Playing the Inside Track” (14 Sep 2021), to Powell either completely misjudging, or deliberately lying about, inflation’s trajectory, the central bank deserves to lose the confidence of the American public and should be disbanded.
On the Market Front
We had noted last week that fears over the possible collapse of China’s giant Evergrande property developer were being overblown. After a volatile week of trading, the Dow Jones Industrial Average squeezed out a 0.6-percent gain last week, boosting the Standard & Poor’s 500 index by 0.5 percent.
The NASDAQ dipped four points on Friday, less than 0.1 percent, to end the week flat.
Evergrande bondholders had not received an $83.5-million interest payment by Thursday’s deadline. The news blunted Wednesday’s and Thursday’s gains into Friday.
Evergrande’s shares shed 11.6 percent of their value Friday on the Hong Kong exchange and have been stripped of 84 percent of their value so far this year.
Fueled by that fear, investors sold heavily early in the week, then went bargain-hunting Wednesday, the same day the U.S. Federal Reserve said it was preparing to wind down its $120-billion monthly bond-buying program.
Rather than the markets pulling back on the tapering news, the Dow’s 2.5-percent rally Wednesday and Thursday became its’ largest two-day gain since March.
Why the boost in stocks with the economic outlook uncertain?
As interest rates stay low and money stays cheap, the stock market casino is the gambler’s place to be.
But that climate is now beginning to change.
With uncertainty in the air, it was a mixed day yesterday for U.S. indexes, with the Dow Jones up 71.31 points and the S&P 500 and Nasdaq Composite off 0.3 percent and 0.5 percent respectively.
Today was a different story. The line on The Street is that equities are sharply down because there is a budget stalemate in Washington. Congress needs to approve government funding by Friday or else there will be a shutdown.
In a letter to Congress, U.S. Treasury Secretary Janet Yellen warned today that D.C. lawmakers need to raise the debt limit by 18 October to avoid a government default.
While these factors are adding downward pressure to stocks, the real fear as we forecast, is the Federal Reserve admitting to rising inflation and the fear on the Street that as inflation spikes so too will interest rates rise. And when the cheap flows of monetary methadone begin to dry up, equities will move sharply lower.
Today the Dow fell 569 points, the Nasdaq Composite dove 2.83 percent, marking its biggest fall since March… and the S&P 500 sank 2.04 percent.
TREND FORECAST: The media is once again selling fear and blaming market fluctuations on the possibility of a government shutdown while ignoring the fact that there have been 20 of them in the U.S..
And while it is not mentioned, as though it is ancient history, the 2018-2019 shut down during the Trump Administration, the longest in American history lasted for 35 days and wrecked zero havoc on the economy.
However, considering current market volatility, the fear of rising interest rates and the reality of an overvalued equity bubble ready to burst… a government shutdown as markets are diving will escalate the downward dive.
TREND FORECAST: In “Fed Officials Send Mixed Signals on Policy Shift” (29 Jun 2021), we noted this: “At his December 2020 press conference, Fed chair Jerome Powell pointed to “disinflationary pressures around the globe” and said “It’s not going to be easy to have inflation move up.”
A month later, Powell acknowledged that inflation was on the move but said any rise above the Fed’s 2-percent target rate would be “transient.”
The Fed is finally admitting what we have been saying for months: inflation is not temporary or transitory but an economic reality that will continue surging for at least the next six months as materials shortages and supply-line tangles persist.
Also, while the Fed insisted that it would not raise rates until 2024, we predicted that hikes would begin sooner; now half the members of the Fed’s Open Market Committee are expecting to raise rates in 2022 (see related story).
Over There
And in Europe today, stocks closed sharply lower on concerns of U.S. bond yields moving higher which indicates rising interest rates. And there are concerns that Chinese growth will slow down, which means so too will European exports to China.
Today, both Goldman Sachs and Nomura cut their 2021 China GDP growth forecasts from 8.2 percent to 7.8 percent and 7.7 respectively.
As the saying goes, “When the U.S. sneezes the world catches a cold.” Therefore, minus a U.S. equity market crash, which is still a high probability, we maintain our China GDP forecast of 8 percent. And, even if its GDP dropped to the 7.7 percent range, it is still healthy growth compared to the U.S. and Europe.
GOLD/SILVER: Despite sharply rising inflation which is bullish for safe-haven precious metals, on expectations that the Feds will raise interest rates sooner than expected, today gold slumped more than 1 percent, hitting a seven-week low, closing at $1733.80 per ounce.
While the sentiment of gold and silver is bearish, we maintain that when interest rates go up, despite the dollar getting strong, inflation will still persist. Moreover, when the flow of cheap money dries up, equities will dive and the economy will sink into deep recession. Thus, there will be strong demand for safe-haven gold and silver assets which will spike prices back to the yearly highs… and higher.
On the silver front, today it fell nearly one percent to close at $22.44 per ounce.
OIL: Today Brent Crude briefly hit $80 per barrel, its highest level since October 2018, before falling 0.93 percent to close at 78.79 per barrel… which is up some $4 per barrel from last week’s close.
West Texas Intermediate fell 0.21 percent, closing at $75.29 per barrel.
With Brent and WTI up some 50 percent this year and natural gas prices spiking, as we have been reporting, inflation will continue to rise and the higher prices will hit the working class citizens of Slavelandia the hardest.
BITCOIN: As we had forecast when the crypto craze accelerated, bitcoin prices will continue to rise but the greatest threat that will bring them down is when governments do what they can to ban them.
Last week, the People’s Bank of China banned all transactions involving cryptocurrencies and the government has renewed its pledge to end crypto mining in the country.
Any crypto transactions will now be considered illegal financial activity, even when handled by exchanges abroad, the bank said.
China has long complained about digital currencies because of their possible ties to money-laundering and other crimes, as well as their ability to siphon money out of the country unnoticed.
The government also has said that mining uses too much fossil fuel energy and is a factor causing China to fail to meet self-imposed targets for reducing greenhouse gas emissions.
In addition, China plans to debut its own stablecoin digital yuan next year and is nervous about competing cryptocurrencies.
Beijing banned crypto exchanges from China in 2017 and outlawed crypto mining in June.
China announced the ban on 24 September, dropping Bitcoin’s price from above $45,000 to about $42,000 in a few minutes.
The price did not crater because much of China’s crypto activity already had been moved elsewhere as earlier strictures on digital currencies were put in place, analysts told Bloomberg.
“News out of China definitely impacts markets because it can shake market sentiment,” Clara Medalie, research chief at data firm Kaiko, said, “but the actual effect of another Chinese ban has minimal impact on underlying market structure at this point.”
As we go to press, Bitcoin is trading at $41,600 per coin.
TREND FORECAST: We maintain our forecast for Bitcoin to dive deeply if it goes below $25,500 per coin and rise sharply if it breaks strongly above $50K per coin and steadily maintains the above mid-$50K range.
We also maintain our forecast that a major factor in forecasting the future price of bitcoin and other crypto currencies is dependent on government regulations. Thus, the more regulation, the lower the value of the coins, the less regulation, the higher the prices rise, especially as more small time traders keep jumping into the crypto market.
(For more on bitcoin and other cryptocurrencies, please see our “TRENDS IN CRYPTOS” section.)
TRENDPOST: China has complained that cryptocurrency is not real money, should not be used in commerce, and is a haven for criminals’ ill-gotten gains, as our articles highlighted.
We have documented China’s dislike of digital money in our “Cryptocurrency Special Report” (25 May 2021), “Crypto Prices Fall as China Shuts Down Most Bitcoin Mining” (22 Jun 2021) and “China Goes Full Digital Yuan in Beijing” (29 Jun 2021).
TREND FORECAST: China will debut its digital yuan stablecoin next year and will continue to suppress and harass all other forms of cryptocurrency in order to ensure that all Chinese domestic residents can only use the official form of digital money, allowing government minions to track each person’s purchases.
When the digital yuan becomes available to China’s general public, the event will spur other central banks to speed creation of their own stablecoins.
Over time, stablecoins’ widening availability will part the crypto universe in two: investors will hew to digital currencies that tie their value to a stable asset, such as the U.S. dollar; speculators will continue to jump into the crypto sectors the governments can’t control. Free-floating cryptocurrencies also will remain the domain of innovators, whose creations then will be adopted by market sectors.