The Federal Reserve doesn’t have a very good track record. It was wrong about transitory inflation. It was wrong about peak inflation. And it’s almost certainly wrong in thinking the economy is strong enough to withstand tighter monetary policy to fight inflation.
But President Joe Biden trusts the Fed. The cornerstone of his inflation-fighting plan is to recognize the central bank “has the primary responsibility to control inflation.” He took a shot at President Trump for “demeaning” the Fed. On the other hand, Biden said he will respect the Fed and its independence.
The annualized interest payment on the $30-plus trillion US national debt increased by over $16 billion in just six months. With the COVID crisis seemingly in the rear-view mirror, the economy allegedly strong, and the Fed raising interest rates to supposedly fight inflation, you’d think this might be a good time for the government to address its spending problem.
Nope.
It is often said that perception is reality. Politicians spend a tremendous amount of time and energy trying to shape perceptions. So, how does the average American perceive the US economy? In this episode of the Friday Gold Wrap, host Mike Maharrey talks about economic perceptions – both those the politicians are trying to create and those actually held by American consumers.
President Joe Biden is running around trying to take credit for a “booming” economy. It’s the ultimate political dumb-guy argument.
Elizabeth Warren and others are running around blaming inflation on greedy corporations’ “price gouging.” Of course, this narrative falls apart when you realize producer prices are rising faster than consumer prices. If anything, producers are letting consumers gouge them by not passing on all of their rising costs.
December gave us another big jump in consumer prices. But despite a lot of talk about an inflation war, accommodative monetary policy remains in play. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey breaks down the CPI data, Jerome Powell’s Senate testimony, and Joe Biden’s plan to fix rising meat prices. That story has a fun plot twist.
On Monday, President Joe Biden reappointed Jerome Powell to head up the Federal Reserve and nominated Lael Brainard to serve as the vice-chair. In his podcast, Peter Schiff talked about Biden’s decision, the markets’ reaction and what the Fed will (or will not) do moving forward. Ultimately, Peter said the devil you know is still a devil.
We have a temporary truce in the debt ceiling fight. On Thursday, President Biden signed a bill increasing the federal debt limit by $480 billion. But this isn’t an end to the debt ceiling fight. Congress just kicked the can down the road. The increase is only expected to keep the US government solvent until Dec. 3.
As Peter Schiff explained in this clip from his podcast, the debt ceiling has turned into a debt floor.
President Joe Biden released his 2022 budget this week. The $6 trillion spending plan offers a glimpse into Biden’s long-term fiscal strategy – borrow and spend to infinity and beyond.
The Biden budget would take the US to its highest sustained spending levels since World War II.
And here you thought the pandemic emergency was winding down and spending would go back to normal. Well apparently, this is the new normal.
Janet Yellen gave her first speech as Treasury secretary this week and called on the world to adopt a global minimum corporate tax. Peter Schiff talked about it during a recent podcast. He said Yellen’s message to the world reflects a major shift. America once led the world toward freedom. Now the goal seems to be to lead the world to less freedom.
Yellen bemoaned a “30-year race to the bottom” as countries have slashed corporate taxes in order to attack multinational businesses. Of course, the real problem Yellen wants to address is the competitive disadvantage the US will face with the Biden tax increases tucked into his new infrastructure plan.
