Market Direction and Stock Trends

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»» The Real Fed Crisis ««
By: Marty Armstrong | July 6, 2022

The vast majority of analysts claim that the Fed must choose between a recession with declining stocks, or fighting inflation. They claim that Jerome Powell if tackles inflation he faces the risk of a recession and lower stock prices, or he suffers inflation to avoid a recession. This analysis is typical of domestic forecasting. They are clueless as to the real crisis facing the Federal Reserve.

Domestically, the Fed will be bashed by the politicians who claim they can spend whatever they lie and inflation is the Fed's job - not theirs. Domestically, the Fed has always been faced with this analysis and the conflict between its policy v Congress' fiscal spending that they have no control over.

Central Banks, today, realize that they are all connected and the actions of one will ripple through the world economy impacting everyone else. The Federal Reserve has become the WORLD'S Central Bank. Became emerging markets, including many in China, have issued their debt in dollars, and rising interest rates in the United States are starting to push others off into default and financial crisis. Sri Lanks defaulted, and now its economy is moving into hyperinflation because the people have lost confidence in the government. I have warned for years that HYPERINFLATION does not take place because of printing money. It unfolds when people no longer trust the government and that typically comes following the defaults. The printing of the money is the RESULT of the collapse in confidence. It is not the other way around.

We are facing STAGFLATION for this type of inflation was set in motion by the COVID restrictions that disrupted the SUPPLY CHAIN and bankrupted many small businesses. The Fed has ZERO power to fight this type of inflation. Our magnanimous would leader loves one day to blame the inflation on Putin, and then the next day on the Federal Reserve. Never even once will be or the Democrats ever admit that what they did with the lockdowns has created this nightmare. while Schwab at the World Economic Forum cheered how quiet it was so scientists could listen to the earth better.

It is not a simple choice between fighting inflation and causing the economy and stocks to decline. The Fed has become the central bank of the world and it is being lobbied even by China with all other central banks pleading not to raise rates in the USA. The ECB fears this will attract more European capital to flee to the dollar and further result in the decline of the Euro which in turn then makes its energy costs soar even more. The Fed is NOT confronted with such a simple choice as these domestic analysts are telling everyone. This is far more complex and the Federal Reserve has become the world's central bank - not just domestic.

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