After pulling back slightly in February, Americans went back to borrowing on credit cards in March — despite record-high interest rates. This indicates that consumers continue to struggle to make ends meet in this deteriorating economy. It also reveals that the Fed’s monetary tightening is not cooling spending as promised.
During his post-FOMC meeting press conference, Federal Reserve Chairman Jerome Powell insisted that the US banking system is resilient and sound. He said this despite the failure of First Republic Bank just days before the Fed meeting. Peter Schiff appeared on the Claman Countdown on Fox News and argued that Powell and others are wrong. He said the US economy is in a financial crisis worse than in 2008.
The Federal Reserve raised rates yet again during its May FOMC meeting. Now everybody is trying to decipher the messaging coming out of the Fed to figure out what’s next. But what if the words Powell and Company are saying don’t really matter? In this episode of the Friday Gold Wrap podcast, host Mike Maharrey talks about the latest moves by the Fed and suggests we should focus on the realities over the rhetoric.
Is the rate hike pause in play?
That question remains up for debate after the May Federal Reserve Open Market Committee meeting.
But when you break it all down, the underlying economic reality is far more important than the messaging coming from Powell and Company. And the underlying economic reality is that inflation isn’t beat and the economy is heading toward a cliff.
The failure of First Republic Bank reveals that the banking system isn’t nearly as sound as Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell would have us believe. But as Peter explained in a recent podcast, it’s not just the banking system that’s messed up. The Fed has screwed up everything that is a function of interest rates by keeping rates at zero for so long.
On May 1, new Federal Housing Finance Agency (FHFA) rules went into effect that will allow borrowers with lower credit ratings to qualify for better mortgage rates than they otherwise would have. Meanwhile, borrowers with better credit ratings will pay higher fees to subsidize the program. Peter Schiff recently appeared on Real America with Dan Ball to talk about the new rules.
President Biden has announced he will run for a second term in 2024. Peter Schiff recently appeared on the Ingraham Angle on Fox News to talk about what will happen if we keep going down the Biden road. In a nutshell, Peter said we can’t afford to let Biden “finish the job.”
Many people are concerned about a possible move toward central bank digital currency and we’re starting to see organized pushback on the idea. But as Friday Gold Wrap host Mike Maharrey explains, a lot of people are so caught up in taking on CBDC that they’re missing the more fundamental problem with government-issued fiat currency. Paper money isn’t the solution. It is the parent of the problem.
Bed Bath and Beyond might be a canary in the coal mine.
The home goods retailer filed for bankruptcy earlier this week. And according to research by UBS, this is likely just the beginning of a surge of retail store closures.
Americans continue to deal with rising prices even as the economy deteriorates. But the US isn’t the only country with an inflation problem. As Peter Schiff explained in a recent podcast, every country has let the inflation horses out of the barn. When you couple that with the de-dollarization trend, it’s bullish for gold.
