So according to our Fed President and many others all is well! I guess it is so good that a .25% rate hike would have caused some sort of an economic problem.
All of the leading economic indicators have been falling for months and are now picking up even more steam. Regardless of the facts we are told by our “leaders” that we are all rich, the economy is expanding, and a “soft landing” is likely. If anyone was to research ANY numbers (many their own, by the way in many cases- manipulated as they are) they would know that these statements- which are parroted on the financial game shows are patently false. Since I am pretty sure that these people aren’t stupid, I am only left with the explanation that they are lying right to our faces. They have become so good at it that they may actually believe what they are spewing. More than likely, they are trying to extend this thing until it is someone else’s problem.
The problem is that in many tax and spend areas, that same scheme has been taking place for decades and now the long- awaited “tomorrow” is today. Take a look at Chicago, LA, San Francisco- former jewels of our country’s assets that have been turned into homeless wastelands.
The Fed has painted itself into a corner in my opinion because, as we saw yesterday, if they don’t raise rates, it shows market participants that the economy is weaker than they are letting us know. If they do raise rates, it will likely hasten the implosion of asset prices. It will also cause more money creation because of the increased interest costs to the Federal government. With foreign buyers shying away from funding our debts there are fewer and fewer options outside of direct monetization of the debt. Basically, monetization is a big word for the central bank to conjure up “money” and buy the debt that the treasury issues so the government can continue to function and spend.
Another big story this week is the strike against the Big 3 automakers. Regardless of which side you may support (I support both sides) I think it is important to understand that each side has its longer-term interests in mind. The best outcome would be to work this out quickly. The UAW (United Auto Workers Union) is threatening more strikes on Friday. Companies are responding with layoffs. Stellantis wants to CLOSE 18 facilities (not good for long-term job protection) Ford has laid off 600 employees and GM 2000.
In my opinion, while the UAW and the companies are battling it out, those that are mostly responsible for this strike are being held unaccountable.
I believe that many would agree that these union jobs are well-paying jobs that over time have allowed a strong middle class to have pretty darned good lives. I also think that many would agree that our auto companies are some of the best on the planet. The real culprit here is the central bank.
Is it GM’s fault that the price of their components are rising? Is it Ford’s fault that energy costs are skyrocketing? Is it either’s fault that interest rates are rising making it harder and harder for people to own their products?
No. It is because there has been so much “money” conjured up out of nowhere with no assets to back it up the dollar is losing value at an astounding pace. Of course, to hide that the dollar is compared to even more inferior currencies so it APPEARS strong. Gold is also suppressed so that there is no true measuring stick.
When you are paying $4.25 for gas, over $5.00 for a big mac and your grocery bill doubles I think you should ask yourself if the “strong dollar” propaganda holds up.
On the other hand, is it the fault of the employees that prices have been rising so fast that they feel compelled to fight to keep the lifestyle that they have become accustomed to?
This strike is just one more instance of the insidious tax that inflation is on all of us and affects the poor disproportionally hard. This strike is all about companies trying to compete and survive and for employees to try and keep the same type of food on the table and pay bills that are flying higher.
I guess my point here is that those “in charge” have the companies and employees at each other’s throats while those who have actually caused the problem avoid all of the blame.
This money “printing” enriches a VERY few and impoverishes the rest of us. The poor have been getting poorer for years but now it is getting so bad that the middle class, in many cases, is being relegated to less than middle class. If this doesn’t come under control one way or another even the rich will feel it because no matter how many dollars you have- it may not mean a thing.
Personally, I want ASSETS and not someone else’s promise to repay me at a future date because it looks like even if I get paid in full the VALUE that I was expecting will likely not be there.
This is likely the biggest reason why central banks are buying record amounts of gold and selling US Treasuries at the same time. Another major reason is that, as rates rise, the price of the bonds generally fall. You can bet that many long-term treasuries have seen some major losses already. As I say many times- don’t listen to what they say- watch what they do.
Be Prepared!
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