Day: June 28, 2022

Jun

2022

There is Only One Likely Outcome Here… And You Can Profit From It!

By Graham Summers, MBA

Yesterday I noted that the Fed is completely delusional about engineering a “soft landing.”

The reality is that the Fed has barely raised interest rates. As I write this rates are at 1.5%… while inflation as measured by the CPI is over 8%. And real inflation is likely much higher (CPI doesn’t accurately measure the cost of housing or other items).

Meanwhile, the Fed has yet to shrink its balance sheet… at all. It claims it can shrink it by over $1 trillion. That’s amusing since the last time the Fed tried to shrink it balance sheet by even $500 billion (2018) the corporate debt market froze and the stock market crashed.

The summate… the Fed has done next to nothing to stop inflation. And already the markets have lost over $25 TRILLION in wealth. The NASDAQ alone has lost 33% of its value in the span of six months.

Moreover… the economy is already in recession. The Fed’s own data shows GDP growth went negative in 1Q22. And it’s barely positive thus far in 2Q22. Even if the Fed massages the data to insure we don’t see two quarters of negative GDP growth, the reality is that the markets are telling us a recession is here now.

Copper is commonly called “Dr. Copper, the commodity with a PhD in economics” because it has so many industrial uses that its price is closely linked to economic growth. When the economy is booming copper rises and when the economy is contracting copper price falls.

What is the below chart telling you?

Add it all up… and the best the Fed can hope for is “stagflation” or a period of high inflation combined with economic weakness. And that’s assuming the Fed knows what it’s doing… which given the fact the Fed claimed inflation was “transitory” for most of 2021, is unlikely.

So what does this mean for investors?

That inflation will continue to run hot MUCH longer than anyone expects. The Fed is bluffing when it states it can get inflation under control easily… it’s going to take a LONG time and involve a LOT of pain for anyone who buys into the Fed’s nonsense.

But you don’t have to suffer during this nightmare.

On that note, we just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead.

The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.

We made 100 copies to the public… and they are going fast.

To pick up yours, swing by:

https://phoenixcapitalmarketing.com/inflationstorm.html

Jun

2022

Here’s How to Profit From the Fed’s Inflation Lies

By Graham Summers, MBA

The Fed is now telling us that it can avoid a recession… or engineer a “soft landing.”

It’s a pretty stunning argument… and it raises questions as to whether the Fed actually believes this stuff… of if it’s simply saying this for political purposes so people won’t panic.

Consider what the Fed has done so far in this tightening cycle.

The Fed has raises rates three times bringing them to 1.5%-1.7%. Historically, this is where rates would FALL TO during a market crash or economic downturn. Inflation, as measured by the Consumer Price Index or CPI is over 8%. So rates are extraordinarily low.

Meanwhile, the Fed has yet to shrink its balance sheet… at all.

That’s correct, despite all its claims of “taking action” and “moving to stop inflation” the Fed has yet to shrink its balance sheet. It’s literally done NOTHING in terms of draining liquidity from the financial system.

In simple terms, the Fed has done next to nothing to stop inflation. Rates are at levels that you would usually associate them to hit during easing cycles and the Fed’s balance sheet is ~$9 trillion.

Meanwhile, stocks and bonds have wiped out over $25 TRILLION in wealth… more than was wiped out during the Great Financial Crisis of 2008 and the pandemic Crash of 2020.

What does this all mean?