On Friday afternoon, Federal Reserve Chairman Jerome Powell did a Q&A session with Princeton economist Alan Blinder. Powell admitted that the central bank had “crossed a lot of red lines,” but insisted he was comfortable with the actions given “this is that situation in which you do that, and you figure it out afterward.”
In his podcast, Peter Schiff called it the Nancy Pelosi version of monetary policy. “We need to print the money to see where it goes.”
The solution to the coronavirus economic meltdown is to borrow our way out of it. The Federal Reserve slashed interest rates to zero and the stimulus bill makes all kinds of loan programs available to pretty much anybody and everybody. But American consumers were already up to their eyeballs in debt before the coronavirus lockdowns. In fact, consumer debt spiked again to yet another record in February, according to the latest data from the Federal Reserve.
The Federal Reserve has launched QE infinity. As Peter Schiff put it, the Fed has gone all-in on quantitative easing.
So, what does this mean? What are the ramifications of all this debt monetization and money printing? In his podcast, Peter said this is where the problems really start.
US stock markets enjoyed another Tuesday rebound with the announcement of even more monetary stimulus from the Fed and the hope of government fiscal stimulus and bailouts. In his podcast, Peter Schiff said this should make it crystal clear that the government and central bank are rigging the markets.
The Federal Reserve cut rates to zero and expanded quantitative easing on Sunday. How did the markets reward this latest monetary stimulus?
In his podcast, Peter said he thinks we’ve passed the point of no return.
It appears we’ve pretty much reached complete panic mode.
The longest bull market in history came to an abrupt end on Wednesday. Wall Street followed up with another massive sell-off on Thursday. The S&P 500 had its worst day since Black Monday in 1987. Even gold was down. Meanwhile, the Fed tried to stem the tide, announcing a new round of quantitative easing. But the tide wasn’t stemmed. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey gives an overview of the week’s events and talks about the elephant in the room.
The US is heading for economic lockdown as the impact of the coronavirus grows. To cope with the crisis, President Trump has promised fiscal stimulus. The actual plan remains unclear, but the Trump administration has floated a reduction in payroll taxes, along with bailouts and loan guarantees for struggling industries. While the details are murky, one thing is certain — it will cost billions of dollars.
Meanwhile, the US government is already living far above its means. Uncle Sam recorded another massive budget deficit of $235 billion last month, according to the latest Treasury Department report.
Yesterday was “Reversal Tuesday.” Stocks rallied on the promise of government stimulus. The dollar and the bond market also turned around. In his podcast, Peter Schiff said the bond market was the one to watch because it’s possible that the promise of more stimulus could have finally pricked the overblown bond bubble.
President Trump floated the idea of a payroll tax cut. There is also talk of bailouts for oil companies and other industries hit hard by the coronavirus, such as airlines and cruise companies.