Dear Reader,
Good morning, happy Friday.
Today I want to talk about the Fed December minutes that were released this week.
Basically what we’re seeing is Federal Reserve officials worried about inflation in general.
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It’s stickier than they expected and they’re worried about the inflation impacts from Trump’s incoming policies, which I’ll talk about in a minute here.
So, Wall Street had bet that the Fed would lower rates four times this year.
Now, the Fed and most folks are saying it’s looking more like two times, if at all.
So the Fed is moving from an easing posture to more of a neutral posture.
This isn’t as important now that the bond market is ignoring the Fed, which we’ve talked about…
With long-term debt – 10, 20, 30 years going up despite the Fed lowering rates because bond buyers are refusing to take low rates due to inflation expectations.
This also ties into what the Federal Reserve’s minutes say…
First of all, it’s the massive spending they believe the incoming Trump administration is going to blow up based on policies he’s talked about.
Second, they’re concerned about a change in immigration policy.
Remember, if you do mass deportations, you lose a lot of labor building houses, working in restaurants, mowing lawns – it’s like a whole hidden economy that keeps the price of a house lower, willing to work for $13, $15 an hour instead of $25 an hour that Americans might want for the same work.
That will be inflationary. It will make house prices go up, restaurant and food prices to go up.
So many immigrants are tied into our supply chain and our construction process it almost boggles the mind.
I think that’s one of the reasons Trump has been walking back his immigration deportation talk recently, now saying mass deportation of criminals instead of saying mass deportations of all illegal immigrants.
No one is going to argue with deporting criminals.
The third thing the Fed is worried about with Trump is tariffs.
Remember, if you could spend $500 to buy a couch imported from China, if that couch now costs $550, that’s inflationary.
You get less bang for your buck – your money doesn’t go as far.
So mass deportation, tariffs and spending are a cocktail for inflation – bottom line.
That’s why we see yields going higher.
That’s why they’re smart saying they know they have no control over the long end of the bond market anymore.
Let’s be honest – it’s comical to even think they do.
So the Fed is now saying, we’re neutral – we’re not going to do anything…
We expect more inflation this year if these policies Trump and the Republican-controlled Congress are talking about get enacted.
Do you remember a time when Republicans actually believed in no spending, cutting government?
Those are the good old days.
Now the only difference between Republicans and Democrats is basically what they spend money on. They all spend like drunken sailors.
Let’s be honest here.
We’re investors. We can’t afford magical thinking, being blinded by party affiliation when it comes to fiscal issues.
We have to look beyond politics and what we see on the news.
I know the future seems bright, but it’s critical we stick to the facts.
Our very financial survival depends on it.
The reality is, there are economic forces at work too powerful to be tamed by any one person…
In other words: Even Trump can't stop what's coming.
This is what it is.
This is why the long yield is going higher.
And it’s also claimed its first victim – a company walking out of the mortgage business, which I’ll talk about tomorrow.
No matter who sits in the White House over the next four years, a series of events has been triggered that could devastate millions of Americans.
These events have caused five major cracks in our economy, each of which could cause:
The stock market to crash 50%...
Unemployment to triple…
And wipe out 30% of U.S. retirement savings.
I know the market’s near all-time highs and everything looks rosy.
I’m just looking at the facts and following them to their inevitable conclusions, like I did in 2007 when I predicted the Great financial crisis over a year in advance.
And the data now tells me our fates are sealed.
That’s why I have moved 7-figures of my own money out of the stock market.
And I’m not the only one.
America’s elites are quietly preparing for what’s coming.
Elon Musk says it’s a “no brainer.”
Warren Buffett moved almost a quarter-trillion dollars out of the market.
If you’re not ready for what’s coming, you risk losing everything.
Everything you need to know – and how to protect yourself – is in my emergency briefing.
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