FOMC week. Dare I speculate?
Inflation is hitting the highest levels since 1982. All other major central banks have already begun tapering. Can the Fed really keep kicking the can down the road?
Signs of unabated, raging inflation are everywhere. Even the ECB has finally been scared into “recalibrating” its insane asset purchase program, following similar decisions by Australia, New Zealand, Canada, Japan, and England - all of whom have indeed leveled off on asset purchases. The Bank of Canada has actually not only stopped purchasing assets, but begun selling them.
Price inflation in things like container shipping rates and natural gas prices (which this week bankrupted multiple European utilities acting as middlemen) are proving to be the opposite of transitory.
We have an abundance of money, and not enough of anything else. Layoffs are at the lowest level in 24 years while salaries are at their highest level in the same time period. Retailers are short product, and oil and fuel stocks are careening below seasonally adjusted five year lows.
Hey - at least there’s no shortage of JPEG NFTs selling 6-7 figures (weekly NFT trading volumes might already be in the billions per week).
My question for you - in a world where there’s not enough of just about anything except money - can the Fed really keep doubling down on just creating more money?
Especially in the wake of news that Federal Reserve governors have been trading *freaking index futures*, and inflation screaming far beyond their target and expectations, can the Fed really afford to stay so behind the curve?
I’ll say this. If the Fed refuses to act - the next few years are going to be among the craziest any of us have ever seen. Financial markets will become even dumber. You won’t be able to buy dog food because people on fixed income will have eaten all of it. The working man will be deciding between gas to go to work and paying the electricity bill this month.
And if the party is over? If central banks finally reel in the money supply? Look out below.
