Fed Policy is Unsurprisingly Insane

Even the Federal Reserve is now catching on to the idea that rising levels of inflation is not transitory. But the Fed still doesn’t understand that it is the primary cause of rising price levels. Print massive amounts of money to pay for trillions of vote-buying free stuff that politicians hand out, including money paid to people to not work, which increases demand and reduces supply and you wonder why we have inflation? Where did all these Ph.D. economists at the Fed get their degrees? Was it from a Sears catalog? But why should we be surprised? Financial insanity fits into everything else we are being lied to about, including the need to wear masks and the need to get vaccinated even when it is now proven that people who have had COVID are far more protected than people who never had COVID but have been vaccinated. Then too there is the idea Democrats are selling, that men too can become pregnant. Why should we expect the Fed to be sane when every other sector of our society is not?

A whole lot of human misery results from the big lie. It took ~70 years of communism under the USSR before their economic lies resulted in a change of government. But eventually, truth prevails. And sticking out like Pinocchio’s nose is the rise in the 10-Year Treasury yield that is rising as the Fed can no longer lie about inflation rates. This rise in rates combined with Fed propaganda leading some to believe rates are rising because the economy is so healthy, along with other diversions like cryptocurrencies, may be why gold and silver have had such a rough time. But if anyone reading this commentary thinks the economy is so strong that it can endure rates rising much beyond where they are now, I have a bridge in Brooklyn that I’d like to sell you.

As noted above, U.S. Treasury rates seem to be rising in sympathy with rising levels of inflation. Normally when equities decline as they did this week, you might expect money to move into TLT causing rates to rise. But it seems reasonable to think rising commodity prices as well as gold and silver up a bit are consistent with rising Treasury yields. Of course, the Fed no doubt pulled some strings on Friday to bring the markets back a bit, so it’s hard to say whether things will be different next week. 

About Jay Taylor

Jay Taylor is editor of J Taylor's Gold, Energy & Tech Stocks newsletter. His interest in the role gold has played in U.S. monetary history led him to research gold and into analyzing and investing in junior gold shares. Currently he also hosts his own one-hour weekly radio show Turning Hard Times Into Good Times,” which features high profile guests who discuss leading economic issues of our day. The show also discusses investment opportunities primarily in the precious metals mining sector. He has been a guest on CNBC, Fox, Bloomberg and BNN and many mining conferences.