It’s Lose-Lose For The Fed And For Everyone

A friend asked me today what I thought Powell should do. I said, “…the system is screwed. It ultimately doesn’t matter what anyone does. The money printing, credit creation and artificially low interest rates over the last 10 years has fueled the most egregious misallocation of capital in history of the universe.

Eventually the Fed/Central Banks will print trillions more – 10x more than the last time around. If they don’t this thing collapses. It won’t matter if interest rates are zero or 10%. You can’t force economic activity if there’s no demand and you’ve devalued the currency by printing it until its worth next to nothing and people are toting around piles of cash in a wheelbarrow worth more than the mountain of $100 bills inside the wheelbarrow.

The price of oil is down another $3.50 today to $46.50. That reflects a global economy that is cratering, including and especially in the U.S. Most people will listen to the perma-bullish Wall Streeters, money managers and meat-with-mouths on bubblevision preach “hope.”

Anyone who can remove their retirement funds from their 401k or IRA and doesn’t is an idiot. Anyone thinking about selling their home but is waiting for the market to “climb out of this small valley in the market” will regret not selling now.

Forget Powell. What can you do? There is no asset that stands on equal footing with gold. You either own it or you do not.

“You have to choose between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the government. And, with due respect to these gentlemen, I advise you, as long as the capitalist system lasts, to vote for gold.” – George Bernard Shaw

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