Replies to post #73233 on Abet Chichi2 (Chichi2)

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»» The Fed Can't Stop the Inflation ««
By: Marty Armstrong | May 20, 2021

The Federal Reserve has become concerned about inflation and it has been carrying out “reverse repos” draining about $350 billion+ from the market. Effectively, the Fed is now selling Treasury securities to counterparties and taking in cash, which amounts to draining liquidity from the market ending QE. The whole problem is the Fed is starting to realize it has lost control of the economy. The people are spending because prices are rising from food to electronics and everything in between. As I have said before, it really has nothing to do with the quantity of money. People will hoard their cash UNTIL it appears that whatever they are looking at will cost them more tomorrow. 

Inflation is here and it is created by shortages thanks to the lockdowns. Then we have the migration from the cities to the suburbs and the deliberate attempt to end commuting to save the planet will undermine the big cities which are incapable of fiscal management. You wou7ld think that in business if your increase the production of a product the cost per item declines in production cost. But in government, the mismanagement is reflected in taxation, and the more the people gather in a city, the cost should decline. Instead, taxation always rises and never declines.

The confidence in the Biden administration is collapsing. That was the straw that broke the back. With higher taxes and the prospect of killing capital gains, attacking the rich is not going after Bill Gates and George Soros. They sheltered everything into trusts. The attack on the rich is small businesses which include farming. What the Biden Administration is also doing with this policy is reducing the production of food on top of the lockdowns.

So welcome to inflation. This is beyond the control of the Fed. A weekly closing on the Dow below 33545 will warn that the market may decline to retest even the 30,000-31,000 level on the Dow. Then the Fed will fear a crash and the reverse their position again.

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