The Federal Reserve wrapped up another FOMC meeting this week. The central bank delivered pretty much what was expected. The easy money will continue to flow unabated. But it looks like what is expected is no longer enough. The addict wants even more of the monetary drug. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey talks about the Fed meeting and the market reaction.
If you go to McDonald’s, you expect to get a hamburger. If you go to KFC, you expect to get chicken. And if you go to the Federal Reserve, you expect to get easy money.
The Fed delivered exactly what you would expect at this month’s Federal Open Market Committee meeting that wrapped up Wednesday.
Every week, analysts and pundits pour over the latest weekly jobs report looking for signs of life. Every month, we dive into the monthly unemployment numbers hoping they signal economic recovery. But these unemployment numbers don’t tell the whole story.
The government economic shutdowns in response to the coronavirus pandemic have deeply wounded the economy in ways that won’t immediately show up in the numbers. In fact, they could leave scars on the economy that don’t fade for years.
Wildfires are raging out of control in western states doing millions of dollars in damage and disrupting countless lives. In a recent podcast, Peter Schiff said the Federal Reserve has set an even fiercer wildfire – inflation. And we are in danger of it burning out of control through the entire US economy.
There was a tremendous amount of volatility in the stock market this week with the NASDAQ entering correction territory and then rebounding. Is this just a blip on the radar? Or is the biggest bubble ever running out of steam? In this episode of the Friday Gold Wrap podcast, host Mike Maharrey talks about it. He also digs into what’s going on in the housing market and what it’s telling us about the broader economy.
Last month, we reported that mortgage delinquencies charted their biggest quarterly rise ever. Digging more deeply into the numbers, we find even more trouble brewing in the subprime mortgage market.
Of the 8 million active mortgages the FHA insures, 17% were delinquent in July. That ranks as the highest level in history. That translates to about 1.4 million delinquent FHA loans.
Last month, the Federal Reserve moved the goalposts when it changed its inflation targeting policy. In the past, the central bank has targeted a 2% inflation rate as measured by CPI. Now it will shift to “average inflation targeting.” In effect, the Fed will allow the CPI to run “moderately” over 2% “for some time” to balance out periods where it runs under that level.
We have argued that this isn’t some kind of technical policy shift due to new economic insights. It’s a necessary move because the Fed can’t stop printing money and price inflation is an inevitable side-effect.
After rising early in the week on the Fed’s promise of more inflation, gold and silver dipped a bit late in the week with some positive economic data bolstering hopes of a quick economic recovery. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey reiterates that what’s going on isn’t fundamentally about the coronavirus. He takes a deep dive into the Fed’s new inflation policy and makes the case that this was all in play long before the pandemic.
According to CBO projections, the federal budget deficit will come in at $3.3 trillion for fiscal 2020. That’s more than triple the budget shortfall last year and more than double the previous deficit record set at the onset of the Great Recession.
The S&P 500 charted its best August since 1986. Both the Nasdaq and the S&P 500 made new highs last month. Peter talked about the surging stock market in his podcast, saying that it is the biggest bubble ever. And despite what people seem to think, there will be consequences.