Moving the inflation goal post could be the next stage of the charade.
Be prepared because the Fed heads have an uncanny habit of rolling them out.
The 30 former Fed Bernanke Quotes that are so absurd you won’t know whether to laugh or cry here make a good read.
“The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost,” Bernanke November 2021.
“The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost”
But here comes a beauty from the Nobel winning prize, 2022 Bernanke for his contribution to finance and economics (we are not making this up) a year before the real-estate bust and the subprime mortgage collapse, which led to days away from a global financial meltdown.
“Economic prospects for households remain good. Household finances appear generally solid, and delinquency rates on most types of consumer loans and residential mortgages remain low,” Bernanke May 2007.
Moving inflation goal post, further dilution of USD, and a currency crisis for everyone else
New decade, new Fed head, and the absurdity continues. Remember Fed Powell pedaling the transitory inflation narrative in early 2022, which flipped to temporary inflation, then flopped to chronic inflation.
“Moving inflation goal post, further dilution of USD, and a currency crisis for everyone else”
WEALTH TRAINING COMPANY
Hint, hint, no carbon trader worth his salt believes December US CPI 7.1% post. So what happened on the morning release was a moronic melt up as the AI bots, programmed to buy on news of falling CPI pumped up asset prices. But carbon traders don’t live in a circuit board, they go to the grocery shops, and restaurants, they buy fuel for their rigs and need heating oil and figured the CPI data was overcooked, so they sold the rip.
“The USD, the world’s reserve currency is being diluted, and if so the selloff in the treasuries is not over”
– Wealth Training Company
Fed head is low on credibility and is likely to move the inflation goal post
Fed Powell’s 2% inflation target as the price of energy and food hyperinflation in the double digits could outdo Bernanke, making him the next Nobel prize winner for finance and economics in a clown world.
Serious implications of moving the inflation goal post
The USD, the world’s reserve currency is being diluted, and if so the selloff in the treasuries is not over.
If the Fed head decides to make 4% the new inflation target, treasuries will sell off, and yields will go higher, pushing up the global cost of borrowing.
The US treasury’s 10-year yield is currently at 3.49 % and will need to go to 4 to 5% in a scenario where the inflation target is raised from 2% to 4%.
Spiraling 10-year yields will guarantee a global depression and a currency crisis in all but the USD, which could strengthen as US paper yields act like a straw in a global milkshake, sucking up liquidity.
Moving the inflation goal post is negative for risk assets, particularly financed with leverage
Higher borrowing costs could trigger a freeze in business investments, layoffs, foreclosures, and even lower stock prices.
Moreover, the US public deficit of 31 trillion USD means that raising rates to a level to combat core inflation of 7.1% would push the cost of servicing the debt to over 500B USD. Monetizing the debt further dilutes USD and crashes other fiat currencies.
Head for the hills.
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