Things are escalating very quickly.
If you follow my work here, or on my other blog (unchartedfx.com) or even follow my stories on social media ( https://www.instagram.com/unchartedfx/), I have been warning about this.
I have been saying interest rates are going to ), perhaps even negative AND central banks are going back to stimulus.
People need to admit this now. The mandate of central banks is not maximizing employment and stable prices (inflation). The mandate is to keep assets propped up. Period. They will soon morph into the most powerful institutions in human history as they become BUYERS of LAST RESORT.
Today, Jerome Powell announced that the Fed will be “buying new securities, grow reserves, and grow its balance sheet”.
A reporter asked Powell isn’t this QE? He laughed and said no it is not. The term being used is POMO or Permanent Open Market Operations. This is heavily linked to the repo event which I have posted about here on this blog. How interest rates spiked up to 10% because banks had no reserves left at the Fed. The Fed had to suppress interest rates because this system cannot survive with higher rates.
Free markets and capitalism are dead, and have been since 2008. We are in socialist and controlled markets. Things cannot be allowed to fail due to the issues that would occur with stocks dropping lower and real estate dropping lower. This is what happens when interest rates are suppressed and kept low for a long period of time. People get used to cheap money and the REAL economy has not improved.
If you follow my work, I mentioned why this new stimulus will not be called QE. It cannot be called QE. This is because calling it QE could initiate a confidence crisis. This is coming regardless, it is just when the market realizes we are in this environment of 0% interest rates and QE forever.
Remember, QE was supposed to be a 1 time desperate policy to avoid a 1929 like great depression. There was so much bad debt in the system that this debt could not be allowed to fail. Government and Central Banks had to buy it up. If people realize we are back to QE, then the market will realize central banks have no more tools left. QE forever really. Big government and digital money is coming.
QE will benefit the rich. The rich will get richer as they realize this game. Wall street will keep the party going because it means cheap money and the central bank having their back. As people look for yield, the stock market will be the biggest benefactor as it is the only place you can go for yield.
The middle class will continue to suffer and disappear as they will need access to more debt to sustain where they are. This means that the political/economic/social crisis will get worse and is coming.
You HAVE to be in the market to profit from what is coming. This is the golden age for trading and active trading/investing. Your 2-3% in a bank in real terms is closer to 0% if it is not already 0%. Your mutual funds and other retirements can only make money when the market goes up. When this party is over, we will see the largest wealth transfer in history when the market falls and this money goes to banks, institutions and retail traders.
So in summary, expect more interest rate cuts and now more stimulus. Remember, this is all happening while the “strongest economy ever’” narrative is being maintained. You do not cut rates or go to stimulus when the economy is booming.
This confidence crisis is looming, and we are deep in the possible reset.
Gold and Silver will remain buoyed on this as people realize central banks are going to inflate to try and keep the debt sustainable. Everyone will be cutting rates to 0 or negative. Gold and Silver will be ways to protect your purchasing power as fiat dies. An insurance policy for your bank account and wealth.