Earlier in July, U.S. President Biden came away from a meeting with Fed Chairman Jerome Powell and calmly announced that in addition to inflation being “short term,” we should fear not, as Biden also “made it clear to Chairman Powell that the Fed remains independent,” but “will act as needed.”
Whewwww. Where to even begin in unpacking the lighthouse of reality behind so much verbal fog?
When it comes to market analysis, no one wants to hear political opinions within finance reports, left or right.
We get this.
Thus, rather than run the risk of offending the left, right or center, I’ll be frank in confessing my foundational view that nearly all politico’s (and Fed Chairs) have been universally comical when it comes to math, history or blunt-speak.
So, let’s get back to Biden’s recent observations…
As for inflation being “short-term,” we’ve written ad nauseum about our stance on this fiction many times elsewhere.
But as for Biden’s declaration about the Fed being “independent,” let me wipe the coffee I just spilled on my shirt and speak plainly: That’s a lie.
First of all, if the Fed were as “independent” as Biden claims, then how can Biden be so certain they “will act as needed”?
Aren’t “independent” actors supposed to act as they, rather than the politicians, decide or “need”?
And if an otherwise unconstitutional Fed, which sits on Constitution Ave behind marble columns screaming of a governmental architectural façade were truly an independent “private bank,” then why does it call itself a “Federal” Reserve?
Furthermore, for any who have taken the time to read the actual (as well as sordid) history of the Fed’s not-so-immaculate conception (as uniquely outlined in Ed Griffin’s seminal work, The Creature from Jekyll Island), they already know that the Fed is as tied to the hip of Wall Street money and D.C. politics as an anchor is to a rotting ship.
Finally, and most importantly, if the Fed were truly “independent,” then why has it been buying the near entirety of Uncle Sam’s IOUs (Treasury bonds) for the last 18 months at negative real interest rates?
Needless to say, Biden has publicly offered Jerome Powell “broad support” for another Fed term for one simple reason: The Biden Administration, like every administration since Eisenhower, wants a dependable rather than independent Federal reserve.
In other words, in a nation 1) whose manufacturing has been offshored, 2) whose workers are increasingly unemployed or on the dole, 3) whose feudalistic top 10% have disconnected entirely from the bottom 90%, and 4) whose entirely Fed-supported (and sky-rocketing) securities bubble is now the only reliable source of capital gains tax receipts allowing the U.S. to pay its interest expense on governmental debt… it’s actually quite easy to see that the Fed is anything but independent of D.C. politics.
To the contrary, the Fed is now, and has been evolving for years, as not only the lender of last resort for America, but the “solution” of last resort in pretending that a debt-soaked nation can survive off more debt.
“I sincerely believe that banking establishments [like a private central bank] are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale.”
“A U.S. central bank would represent the prostitution of our government for the advancement of the few at the expense of the many.”
So, there you have it. A few little reminders from history, securities bubbles and tax receipts of what I think about Presidential truth in general or Biden’s “independent Federal Reserve” meme in particular.
But for those thinking about currencies and markets, let me get less political and even more blunt: The blatant dishonesty, desperation and open absurdity of such financial leadership makes it far easier for informed investors to behave and prepare for a future laid out to us by the so-called experts.
Let’s just follow the bread crumbs (i.e., data and math) and see where they always lead.
It’s no great mystery to political administrations addicted to Fed money that they will be asking for even more of it:
And it’s no great mystery that Federal deficits like this…
… will be ignored by the Don Lemon-like “journalists” of the world throwing soft-ball questions to soft-brained politicos like Biden, all of whom promise more free money to the legitimately downtrodden masses like this…
…in order to get or stay elected.
But expanding the money supply at astronomical levels like this…
…doesn’t help those same Wall Street-ignored and increasingly angry masses for long, as the invisible tax of inflation eats away at the dollars they earn, collect or try to save at negative rates of return.
As we have stated over and over, all financial roads and conversations in such a perverse debt and currency backdrop turn to gold, not because we are gold bugs, but simply because the writing is all over the walls (or charts above).
Stated more simply and more bluntly, taking on more debt paid for with more fake money results in one simple reality: The debasement of that money as a store of value.
Period. Full stop.
Toward this end, the one chart which can’t be overstated or repeated enough reminds us that gold can only trend further North for the simple reason that the fiat currencies in your wallet, bank account or 401K can only trend further South in a world awash in fiat currencies.
Again: Compared to a single milligram of gold, the major currencies are losing their war on value with each central bank mouse-click:
In such a clear yet tragic setting, relying on the expertise or double-speak of the “experts” is an individual choice.
We get this too.
As for me, I am, after all, an evidence-based cynic.
Nevertheless, the examples of outright fraud and dishonesty from the lips of such leadership can’t be denied, brushed aside or debated, when the facts, quotes and numbers speak for themselves.
Furthermore, we have been agnostic as to whether these policy makers served a left or right leaning administration for the simple reason that regardless of who is (or was) in the White House, the “independent Federal reserve” has been consistent in leaning our dying dollar, debt-soaked economy and artificially bloated markets further toward ruin with each passing day, mouse-click and misstatement.
The data above is not political. It’s just data.
Follow the data’s signs, not Powell or Biden’s.
Egon von Greyerz
Founder and Managing Partner
Matterhorn Asset Management
Phone: +41 44 213 62 45
Matterhorn Asset Management’s global client base strategically stores an important part of their wealth in Switzerland in physical gold and silver outside the banking system. Matterhorn Asset Management is pleased to deliver a unique and exceptional service to our highly esteemed wealth preservation clientele in over 70 countries.
The debate should not be about the “independence” of the FED. Rather the American people should be demanding the END of the FED. The US Constitution is very specific in its requirement that the US Treasury and only the US Treasury be in control of our money. So why has the Federal Reserve, which is a private for profit banking cartel owned/controlled by 7 jewish families and one crypto jewish family via 12 their 12 private for profit banks, many of whom were not even US citizens at the time the FED was created are still allowed to control the US economy? And make no mistake given that the “FED” gets 6% interest on every dollar of our own money they “lend” back to us those 12 bank owners are now splitting nearly 2 Trillion dollars in pure profit every year…..
End the Fed and end the dominance of jewish bankers in control of America’s money (treasury), banking, Judiciary, intelligence and Security. Jews make up barely 2 % of the US population and Ashkenazi Jews a mere fraction of Jews over all. And yet, this tiny group has far and away the biggest over representation of any group in America in every key area of government in Washington and many State governments. Furthermore, most of these people are also rabid zionists whose allegiance to israel is unquestioned based upon their actions…
Over the last half century as their power, control and dominance over the Federal government has grown, America has descended into bankruptcy and third world status in virtually every key area except the military. This group has spent literally trillions on the US military in order for it to prosecute illegitimate wars in the Middle East for israel. Make no mistake, once Israel has finished stealing the States of Palestine, the City of Jerusalem Syria to the Euphrates River, Jordan and Lebanon, “our” military will also fall into the third World.
Ye olde doublespeak at work. “Independent” just means it is not a State organ. Xmas 1913 was a vile time, when the Fed was authorised in Congress, with only a handful of congressmen present, far below quorum. In essence, the Fed is illegal, making their control over the US military illegal, making their CIA terrorism over the rest of the world illegal, which makes the very existence of the Alphabetsoup Agencies illegal.
We are subject to the guns carried in the name of a bank, carried by people so proud of their country, they’ll gladly send their children to murder women and children in far-off lands, but they will not question the need for programmable vote counting machines with internet connections. Machines programmed by people who refuse to show the code, because “trade secrets”.
At least the Yanks are slowly realising they live in a Soviet, have been for years…
Research & References of Deconstructing Biden-Speak|A&C Accounting And Tax Services