The Fed pretends to care; Dow 40,000, here we come!
I know I put out some dire predictions a couple weeks ago indicating that a probable asset market collapse was in the works as I theorized that the global central banks were about to embark on a campaign of excessive monetary tightening in their quest to subdue the inflationary force that they themselves engineered. My line of reasoning was simple, the central banks would continue ratcheting up interest rates in their failed attempts to rein in price inflation. Of course, this price inflation is outside of their control to manage and is being centrally managed through the consolidated global supply chain.
Of course, we discussed in great detail how the social, fiscal, and monetary largesse was directed primarily towards the end user, with little thought about sterilizing the massive waves of dollars being printed and dispersed.
But based on the FED actions of the past week, I don’t think income generating asset holders have anything to worry about. Based on the equivocating logic and substance of the FOMC statements, as well as the information gleaned from Jerome Powell’s subsequent press conference, the Fed hasn’t publicly announced their game plan. But I’m here to announce it; the FED doesn’t have one and will only pretend to care about inflation as it rips apart the typical household.
It’s becoming more clear that this engineered price inflation will be used as a catalyst to help facilitate and accelerate the agenda for the Great Reset. Indeed, we won’t own anything and we’ll be happy (relieved to take the mark). Only those with enough income generating assets to offset the punishing rising costs of living will be able to keep their heads above water.
I can’t think of a more effective way for the powers to consolidate the global wealth and power than by creating massive waves of price inflation while simultaneously suppressing longer-term bond yields.
Successful quantitative easing was always predicated on the abilities of the government and Fed to effectively sterilize the excess money spent and generated from the deficit spending by keeping it either in the financial shell or being transferred overseas.
Now it seems that the powers have decided to terminate this current monetary system in the next two to three years and have allowed all of the price pressures to go parabolic. This provides them one last ditch opportunity to grab as much of the global wealth as possible for when they chain us back down with another crisis.
Let freedom ring?
We remarked nearly 2 years ago that this engineered largesse was going to result in asset prices of all sorts going to go into the stratosphere. At the time, I assumed that the powers were going to work to subdue any price inflation, and that we would get a continuation of more of the same over the longer term.
Clearly I was wrong in this regard, and inflation has been relentlessly destroying the wealth and lifestyles of the bottom 80-90% of the population. Anyone who has not been able to generate enough income and capital gains to overcome what they’ve lost in buying power from their diminished real income has been impacted. Thus, we estimated that 80 to 90% of the American population have fallen behind on a net basis.
After I submitted those posts from a couple weeks ago, the FED announced its FOMC statement and Jerome Powell engaged us with his Hocus pocus press conference. There was only one thing missing, a definitive statement regarding how the Fed would work to diminish the inflationary forces that have not only been building but have become institutionalized in the system.
You and I both know that the inflationary forces were caused by a one-two punch. On one hand we had tens of trillions of dollars worldwide in monetary and fiscal stimulus dispensed out to the unwashed plebs to piss away as quickly as they received it. On the other hand, the globalist controlled supply chain was curiously constricted. Thus, while demand was heightened, aggregate supply was restricted. Unless the globalists release the supply chain pressure this inflationary monster will continue to persist.
So, how does this lead to Dow 40,000? Simple. The FED doesn’t seem to give a rat’s ass about the bottom 80 to 90% of the population. They have no well-defined game plan to combat inflation, and if they truly were concerned about fighting inflation they would have already begun to tighten interest rates. The FED funds rate should already be 50 to 100 basis points and they should have announced some sort of tightening with last week’s FOMC statement.
Based on the behavior of the Fed, I assume that they are under orders to let this continue raging while suppressing interest rates, and thus also bond yields. Even if the supposed dire predictions of a 2% Fed funds rate becomes a reality, that won’t stop the well engineered inflationary steamroller.
As long as the official CPI remains in the 5 to 10% zone, and the longer-term treasuries are yielding a massive negative real yield, stock prices and asset prices of all sorts have only one way to go… up.
In terms of rental real estate, I don’t see any catalyst for a collapse. Personally, I am flabbergasted at how high rents have grown over the past 2 to 3 years. Specifically, over the past 18 months, I have seen 30% growth in detached single family housing rental rents. Rents that were formally $2,000 a month two years ago are now $3,000 a month on my single family houses.
The government and the FED couldn’t care less about the people and I assume that people will be shut out of housing because of high rates of price and rent rate growth. I estimate that less than 10% of the US population owns a rental property and the percent of families who own a home keeps dropping. We see the pattern established here, but in the instance of over inflated house prices, I think homeownership rates would rise if house prices collapsed. But that cannot be allowed to happen. Homeownership rates will continue to fall as the costs become more and more excruciating. A simple furnace replacement three or four years ago would cost a couple thousand dollars. Today, it is $3,000 to $4,000.
Welcome to the Great Awakening announced by the alt-media, I’m also glad that the churches are speaking the truth about our adversary. Ha ha ha…
Unfortunately, the vast sea of Christian dummies are preaching a false gospel in which we are being trained like circus animals to worship our adversary.
Indeed, all those Zionist dummy pastors are telling us to keep quiet as we twist the Pauline Epistles to conflate the synagogue of Satan with God’s chosen. Even if the organized religions like the Catholic Church aren’t preaching the Zionist doctrine per se, they certainly aren’t out there warning us. Now that’s what I call the Laodicean church. I got a few emails from pissed off former readers for me daring to say the obvious.
All hail the S of S! They are God’s chosen and don’t say otherwise. Let freedom ring! We’ve been let out of our cattle pens to proclaim the truth, yet to be ripped apart by price inflation.