In the March 8 episode of the SchiffGold Friday Gold Wrap podcast, Mike Maharrey emphasized the importance of understanding sound economic theory. And as economist Frank Shostak explained, facts and figures aren’t enough to digest what’s going on in the economy.
In order to really make sense of the data one must have a theory, which stands on its own feet, and did not originate from the data. By means of a theory, one could scrutinize the data and could then try to make sense out of it.”
In a recent article published on the Mises Wire, economist Dr. Thorsten Polleit builds on this body of knowledge, explaining how central bank manipulations of interest rates not only distort the economy, the actually mess with our minds.
During its FOMC meeting last week, the Federal Reserve took 2019 rate cuts completely off the table. It said it will freeze bond sales from its $3.8 trillion balance sheet later this autumn. In other words, balance sheet normalization is pretty much a done deal. Peter Schiff has predicted this would happen. He said from the beginning if and when the Fed tried to normalize rate, it would have to abort the process.
And here we are.
But as Peter explained in his most recent podcast, the Fed still isn’t being honest about why it’s done a monetary policy 180. It’s making excuses.
There’s that word again — patient.
Jerome Powell once again emphasized patience during the most recent FOMC meeting. The Federal Reserve left interest rates unchanged and took any hikes for 2019 off the table. It went a step further and projected just one rate hike in 2020.
During his most recent podcast, Peter Schiff said most people expected a dovish Fed, “But I don’t think they were expecting the Fed to be this dovish.”
Federal Reserve Chairman Jerome Powell appeared on 60 Minutes last Sunday to reassure us that the US economy is great. There’s nothing to worry about. So, why the sudden reversal in Fed monetary policy? According to Powell, the central bank is just worried about slowing global growth. But as Mike Maharrey discusses in this week’s Friday Gold Wrap, it’s pretty clear the real problems are right here in the good ol’ US of A. Mike also covers the latest in precious metals news, with a focus on silver.
All of a sudden, the Federal Reserve is considering increasing its balance sheet again.
Remember back in September? QE was on “autopilot.” Then we got the “Powell Pause” and suddenly, the talk was that balance sheet reduction could be winding down. Powell confirmed that was the case just a couple of weeks ago when he told a congressional panel the central bank would be in a position to “to stop runoff later this year.”
The stock market has rebounded nicely since those dark days of December leading many analysts to believe precipitous nosedive was nothing but a bull market correction. But Peter Schiff begs to differ. He’s been saying that the rally in stock since the Powell Pause is really a bear market correction. Furthermore, Peter says an upcoming recession is a done deal.
During the Orlando Money Show, Mark Skousen moderated a debate between Peter and Louis Navellier. The question was: were we witnessing a bull market correction or a bear market rally in the last three months?
After weeks of hinting, Federal Reserve Chairman Jerome Powell confirmed that the central bank will end its balance sheet reduction program this year. This just five months after insisting quantitative tightening was on “autopilot.”
“We’ve worked out, I think, the framework of a plan that we hope to be able to announce soon that will light the way all the way to the end of balance sheet normalization,” Powell said during testimony before the House Financial Services Committee.
There was a lot of Fed-talk on Friday and the big theme was inflation.
For quite a while, Peter has been asking an important question: what is the Federal Reserve going to do when the inflation level gets above 2%? Well, it looks like its setting the stage.
Was Ben Bernanke lying or just wildly mistaken when he claimed the Federal Reserve wasn’t monetizing the debt in the early days of the financial crisis?
The Fed released the minutes from its January Federal Open Market Committee meeting yesterday. There really weren’t any surprises. The minutes emphasized the central bank will exercise “patience” in raising rates and also signaled that its balance sheet reduction program will end soon. A number of figures at the Fed have hinted that quantitative tightening will end in the near future, including Federal Reserve Governor Lael Brainard and Cleveland Fed President Loretta Mester.