We got the February CPI data yesterday. There is some bad news in the report and then there is some really bad news. In this episode, SchiffGold Friday Gold Wrap Host Mike Maharrey breaks it all down. He also talks about gold’s rollercoaster ride this week in the context of inflation and the Russia-Ukraine situation.
Debt issuance by the US Treasury has fallen since the binge in December when the Treasury had to replenish its “extraordinary measures” stockpiles (government employee retirement funds) after the end of the “debt ceiling” debate. Still, issuance remains relatively high.
The Treasury added another $278 billion in debt during February. Similar to January, the Treasury stopped converting short-term to long-term debt Instead, it increased Bills by $94 billion, more than any other security type.
The markets seem to be anticipating a Fed inflation fight. They also seem to be realizing that this is going to cause a recession. But they still haven’t come to grips with the fact that this is not going to fix the inflation problem. In his podcast, Peter Schiff argues that the recession will actually end up making inflation worse.
Are we heading toward housing crisis 2.0?
That remains to be seen.
Two things are for certain. This is a massive housing bubble. And the Fed is holding the pin.
There was more bad inflation news this week. So, the Fed is about to ramp up the inflation fight, right? Not so fast. In this episode of the Friday Gold Wrap, host Mike Maharrey argues that the central bank isn’t set to go to war with inflation because it can’t. And he explains how St. Louis Fed President James Bullard let the cat out of the bag.
St. Louis Federal Reserve President James Bullard unwittingly let the cat out of the bag and revealed the central bank doesn’t have the stomach to do what’s necessary to take on surging, persistent inflation.
After CPI came in hotter than expected yet again in January, Peter Schiff appeared on Fox Business along with Chief Investment Officer and Portfolio Manager of Solutions Funds Group Larry Shover. Peter said that the inflation tsunami is just getting started and the Fed is powerless to fight it.
American consumers ran up more debt in December, wrapping up a year in which consumer debt increase at the fastest pace in five years.
This could prove problematic for the Federal Reserve as it contemplates raising interest rates.
The Treasury added almost $400 billion of debt in January, the third most since July 2020. As the month closed out, the national debt eclipsed $30 trillion.
The other two larger debt increases both came right after the debt ceiling was raised. Perhaps most important is the fact that almost $200B of the newly added debt was in short-term Bills (turquoise below).
The Federal is supposedly on the path to tighter monetary policy, although it is currently still pouring gas on the inflation fire. The central bank says it is tapering its asset purchases even now, and will eventually begin shrinking its balance sheet. It also plans to raise interest rates.
Peter Schiff has been saying the Fed can’t do what it claims it’s going to do. Economist André Marques agrees. He says the Fed is trapped. It doesn’t really have room to raise rates or taper.
