Banana Republic Corruption

01
Apr
2024

Are You Ready For the Second Wave of Inflation?

Our latest theme is that the U.S. Central Bank, called the Federal Reserve, or the Fed for short, is NOT politically independent, but is in fact a highly partisan organization that leans left.

The above items are not some conspiracy theory. The Fed’s own actions support this view.

By quick way of review…

1) The Bernanke-led Fed launched QE 3 just three months before the 2012 Presidential election. At the time, the economy was growing, unemployment was falling, and there were no signs of systemic duress in the financial system. So this was a clear intervention to aid the Obama Administration’s 2012 re-election bid.

2) The Fed kept rates at zero for seven of the eight years President Obama was in office.  Once it finally got around to raising rates, it engaged in one of the feeblest hiking schedules in history, raising them only once in 2015

and once in 2016.

3) Donald Trump won the 2016 Presidential election in a major upset to the political establishment. At that point the Fed suddenly began raising rates three to four times per year while simultaneously draining $500 billion in liquidity from the financial system.

4) Today, the Fed is actively juicing the stock market via multiple credit facilities designed to provide liquidity to help the Biden administration with its re-election bid. The Fed is also promising to cut rates despite the fact it’s an election year and inflation has not fallen to its 2% target.

I wish this was the end of this disturbing exercise, but it’s not: the Fed is also letting housing bubble up again. The reason? You guessed it, real estate is the single most owned asset class in the U.S. And boosting home prices during an election year is likely to sway voters.

TheS&P CoreLogic Case-Shiller U.S. National Home Price Index rose 6% in January. This is up from 5.6% in December 2023. As HousingWire notes, this represents the seventh consecutive month of annual price growth. It’s also the biggest increase since November 2022. 

By the way, inflation was around 6% at that time!

So we’ve got both real estate and stocks bubbling up again, courtesy of the Fed playing political games. In the near-term this is fantastic for Americans, who will see their net worth rise as a result of this.

The bad news is that there’s no such thing as a free lunch. And the Fed’s political shenanigans are unleashing a second wave of inflation.

Gold has figured it out.  It recently exploded to new all-time highs.

The good news is that those investors who are properly positioned for this stand to generate truly EXTRAORDINARY returns in the coming months.

On that note, the FREE copies of our Special Investment Report detailing three investments that will profit from the next round of inflation are rapidly being reserved. So if you want reserve one, you better move fast!

To pick up your copy, go to:

CLICK HERE NOW!

Graham Summers

Chief Market Strategist

Phoenix Capital Research, MBA

Posted by Phoenix Capital Research in Banana Republic Corruption, Central Bank Insanity, Inflation
27
Mar
2024

How the Fed is Juicing Stocks to Help the Biden Administration

Yesterday, I detailed how the Fed is a political entity… and it leans left.

By quick way of review…

1) The Bernanke-led Fed launched QE 3 just three months before the 2012 Presidential election. At the time, the economy was growing, unemployment was falling, and there were no signs of systemic duress in the financial system. So this was a clear intervention to aid the Obama Administration’s 2012 re-election bid.

2) The Fed kept rates at zero for seven of the eight years President Obama was in office.  Once it finally got around to raising rates, it engaged in one of the feeblest hiking schedules in history, raising them only once in 2015

and once in 2016.

3) Donald Trump won the 2016 Presidential election in a major upset to the political establishment. At that point the Fed suddenly began raising rates three to four times per year while simultaneously draining $500 billion in liquidity from the financial system.

It is possible that the above items are all coincidence. It’s also possible that Bigfoot could actually be Elvis living in disguise in the woods.

So what is the Fed up to now?

It’s trying to help President Biden win the 2024 Presidential election by juicing the two asset classes that have the largest impact on Americans’ net worth (stocks and housing ).

Today we’ll be assessing the stock market. 

The Fed is supposed to be draining liquidity from the financial system via its Quantitive Tightening (QT) program. However, the Fed is ALSO providing $155 BILLION in liquidity via its overnight credit facilities. To put that into perspective, it’s more liquidity than the Fed was providing via this facility in MARCH 2009 right after the worst financial crisis in 80 years!

As if that’s not egregious enough, the Fed is ALSO providing nearly $500 billion in liquidity via a process called Reverse Repurchase Agreements. 

Small wonder then that the stock market has been roaring higher. The Fed is providing EMERGENCY levels of liquidity to the financial system at a time when the economy is growing! So much for QT!

In the very simplest of terms, the Fed is juicing stocks higher to boost the Biden Administration’s 2024 re-election bid. And rest assured, I’ll detail how the Fed is doing the same thing with housing in tomorrow’s article. 

The good news is that those investors who are properly positioned for this stand to see extraordinary gains.

On that note, the FREE copies of our Special Investment Report detailing three investments that will profit from the next round of inflation are rapidly being reserved. So if you want reserve one, you better move fast!

To pick up your copy, go to:

CLICK HERE NOW!

Graham Summers

Chief Market Strategist

Phoenix Capital Research, MBA

Posted by Phoenix Capital Research in Banana Republic Corruption, Central Bank Insanity, Inflation
26
Mar
2024

Here’s Proof the Fed is a Political Entity… and It Leans LEFT

By Graham Summers, MBA

It’s time to tell the truth when it comes to Fed political interventions.

One of the biggest myths concerning the Fed is that it is politically independent. This is laughably false to anyone who has paid attention during the last 25 years.

Consider that in 2012, the Bernanke-led Fed announced QE 3, its largest QE program in history at the time (an $80 billion per month, open-ended program), a mere THREE MONTHS before the U.S. Presidential election.

Bear in mind, the U.S. economy was growing and the U.S. financial system wasn’t under significant duress at the time. So this was blatant political interference to aid the Obama Administration’s re-election bid by boosting the stock market and economy.

A second major example of Fed political bias concerns its major shift in monetary policy once Donald Trump became President. To fully grasp this, we need to provide a little historical context.

Between 2008 and 2016, the Fed engaged in eight years of extraordinary monetary easing, maintaining interest rates of 0.25% (zero), and engaging in over $3 trillion worth of QE from 2008 to 2015. Bear in mind that throughout this time, the U.S. economy was technically NOT in recession. Economic growth was steady:

And the unemployment rate was in a clear downtrend:

Once the Fed actually ended easing, it embarked on one of the feeblest campaigns of tightening monetary policy in history, raising rates only one time in 2015 and 2016. I would note that all of this took place under the Obama administration.

Then Donald Trump won the 2016 Presidential election, and suddenly the Fed “got religion” about normalizing monetary policy. It raised rates three times in 2017 and another four times in 2018. In 2018 it also began shrinking its balance sheet via a process called Quantitative Tightening or QT. It would ultimately drain $500 billion in liquidity from the financial system via QT in 12 months. That is quite a shift considering the Fed had maintained rates at or close to ZERO for eight years prior to this.

Throughout 2016-2018, the Fed ignored numerous signals that this pace of tightening was placing the financial system under duress, right up until the junk bond market froze and the U.S. stock market crashed 20% during the holidays in December 2018.

For those who would argue that the Fed’s sudden shift from maintaining easy monetary policy for the better part of a decade to aggressively normalizing policy in the span of 20 months had nothing to do with Donald Trump being President, consider that former Fed Vice Chair Stanley Fisher admitted in an interview that the Fed’s raising rates in December 2018 was done specifically to hurt the economy because the Fed was annoyed with President Trump’s constant tweeting about them.

So again… the Fed IS a political entity… and it leans LEFT.

I’ll detail what this means investors as we head into the 2024 President election in tomorrow’s article. But for now, gold is giving us a clue.

The good news is that those investors who are properly positioned for this stand to see extraordinary gains.

On that note, the FREE copies of our Special Investment Report detailing three investments that will profit from the next round of inflation are rapidly being reserved. So if you want reserve one, you better move fast!

To pick up your copy, go to:

https://phoenixcapitalmarketing.com/inflationstorm.html

Graham Summers

Chief Market Strategist

Phoenix Capital Research, MBA

Posted by Phoenix Capital Research in Banana Republic Corruption, Central Bank Insanity, Inflation
12
Feb
2024

The Fed and the Treasury Are Juicing the System for the 2024 Election

By Graham Summers, MBA

The Fed and the Treasury are juicing the markets to help the Biden administration with its 2024 re-election bid. And their actions are going to result in a massive crisis hitting some time in 2025.

The Fed is supposed to be politically independent, but everyone knows that is a fairytale.  The Bernanke-led Fed introduced QE 3 a mere two months before the 2012 election to help the Obama administration. Moreover,  former Fed Vice-Chair Stanley Fisher admitted that the Powell-led Fed intentionally raised rates in December 2018 (triggering a stock market crash) to hurt the economy under former President Trump.

Put simply, anyone who tells you that the Fed doesn’t play politics hasn’t been paying attention. And it is clear that today’s Fed led by Jerome Powell and today’s Treasury led by Janet Yellen are actively juicing the markets and economy to help the Biden administration with its claims that the economy is booming and everything is great.

Case in point, the Fed is talking about easing monetary conditions at a time when the stock market is at all-time highs and financial conditions are LOOSER than they were when the Fed first started raising rates!  Why do this? To keep stocks higher for the election.

The Fed is not the only one in on this scheme. 

The Treasury is pulling out all the stops to help the Biden administration. Typically, the U.S. runs a massive deficit during recessions in order to cushion the economic contraction. Today the U.S. economy is technically still growing… and the Biden administration is running the U.S.’s largest deficit as as percentage of GDP in history (outside of World War II).

Put another way, the U.S. is running emergency levels of social spending at a time when the economy is still growing. And this is adding trillions of dollars in new debt to the U.S.’s liabilities  every year.

The U.S.  owed $28 trillion in debt when Joe Biden was sworn into office in 2021. It owes $33 trillion today.  And the pace of debt issuance is speeding up, not slowing down: the U.S. has added $2 trillion in debt in the last 12 months alone. You can thank Treasury Secretary Janet Yellen for signing off on this insanity.

Worst of all,  the above items are happening for political purposes. There are ZERO fundamental reasons for the Fed and the Treasury to be implementing the above policies. But in today’s world of political corruption and systemic abuse of power, it’s simply how things are.

I’ll address how to profit from this in tomorrow’s article. If you’d like it delivered to your inbox, all you have to do is join our FREE daily investment commentary GAINS PAINS & CAPITAL.

To do so click the link below…

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Posted by Phoenix Capital Research in Banana Republic Corruption, Central Bank Insanity
07
Feb
2024

I Have a Serious Question For You

Who are you going to believe… the mainstream shills, or your own eyes and wallets?

The economic data in the US is telling us that the economy is booming. GDP growth is roaring at annualized rate of over 4%. Unemployment is collapsing, with over 300,000 new jobs being created last month. And inflation has been tackled, falling from a peak of nearly 9% to 3% where is sits today.

The mainstream media parrots these data points as if they were facts. There’s only one problem… if any of this were true, the Biden administration’s approval rating would not have just hit a new low of 37%. You can’t argue that the economy is doing great, but the President is doing an awful job at the same time. So one of these items (the economic data or the President’s approval ratings) is false.

It’s not the approval ratings.

The economic data in the U.S., particularly any economic data that is politically important (GDP growth, inflation, employment) is now largely fiction. And I don’t mean “fiction” as in there are honest mistakes being made because things are complicated; I mean fiction as in the bulk of the data is invented in a spreadsheet by a government beancounter.

Case in point,  we are told that in January the economy added 353,000 jobs. As ZeroHedge notes this happened in a month in which the economy actually LOST 63,000 full time jobs and gained 96,000 part-time jobs. Yes, somehow the economy “created” 353,000 jobs while losing 96,000 full time jobs.

Some added food for thought about the true state of the economy.  As I write this, the U.S. is adding over $2 trillion in debt every year.  The below chart needs no explanation. This is obviously NOT going to end well.

Why is the U.S. adding so much debt?

Because the Biden administration is running the largest deficit as a percentage of GDP outside of WWII. Yes, the deficit is larger today than it’s been during any recession in the last 100 years. Surely this must be because the economy is roaring!

If all of the above items make your head hurt, consider the added insanity that financial institutions and fund managers actually invest trillions of dollars based on this stuff.  And people wonder why no one ever sees a crisis coming in advance!?!?

Don’t fall for this stuff. There’s a lot of money to be made in the markets based on these lies, but it takes a lot of work and insight!

To start receiving our daily market insights every weekday before the market’s open (9:30AM EST), use the link below. There is no fee or cost to GAINS PAINS & CAPITAL. Access is free to the public.

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Posted by Phoenix Capital Research in Banana Republic Corruption, The U.S. is an Emerging Market
17
Jul
2023

Welcome to 3rd World USA!

By Graham Summers, MBA

We continue to receive signals that the U.S. is an emerging market.

One of the hallmarks of emerging markets, particularly banana republics, is that politically connected businesses are treated like royalty while everyone else gets screwed over.

This theme was on full display last week when JP Morgan reported its “outstanding” results. JPM reported record Net Interest Income that was boosted by the fact that the bank was given First Republic’s profitable assets for pennies on the dollar. 

But who picked up the losses? After all, First Republic failed!

You did. So did I and the rest of the public. 

The Federal Deposit Insurance Corporation (FDIC), which is part of the government that taxpayers fund, absorbed most of First Republic’s losses. Oh, and the FDIC also gave JP Morgan a $50 BILLION line of credit as part of the deal. 

How sweet was this deal?

JP Morgan immediately reported a one time gain of $2.6 billion as soon as the deal closed. And it is expected to make $500 million per year from the assets it bought for pennies on the dollar.

These kinds of sweetheart deals that benefit the connected while burdening everyone else are common in emerging markets. To be clear, the U.S. has had them for a long time as well. But they only reached “3rd world banana republic” levels after 2008 once the Wall Street bailouts went from being the exception to the rule.

Indeed, things have become so egregious as far as fraud, waste, and abuse are concerned that the head of the Small Business Administration (SBA) didn’t even bother showing up to a hearing on fraud related to COVID-19 loans.

By the way, the fraud in question is $200 BILLION.

Sweetheart deals that favor the connected and screw everyone else? Administration officials who don’t even bother showing up for meetings concerning hundreds of billions of dollars in government funded fraud? 

These are 3rd world, banana republic type issues. The fact that the U.S. can’t go a week without some new example of this stuff tells us just how far down the toilet the system has gotten.

aving said that, this kind of tectonic shift represents a “once in a lifetime” opportunity. Some investments are going to produce fortunes. Others will lose money for years… if not decades. And those investors who are positioned correctly for this will thrive while others struggle.

We recently outlined a unique “of the radar” investment that will outperform in this new economic landscape in an investment report called Billionaire’s “Green Gold.”

It details the actions of a family of billionaires who literally made their fortunes investing in emerging markets. And they just became involved in a mid-cap company that has the potential to TRIPLE in value in the coming months.

Normally this report would be sold for $249. But we are making it FREE to anyone who joins our Daily Market Commentary Gains Pains & Capital.

To pick up your copy, swing by:

https://phoenixcapitalmarketing.com/GreenGold.html

Posted by Phoenix Capital Research in Banana Republic Corruption
11
Jul
2023

Do You Like Bananas? Our Fed Does.

By Graham Summers, MBA

Yesterday’s article caused quite a stir. 

If you missed it, my main point was this: the U.S. is now an emerging market. And it’s getting downright embarrassing.

Last week our Secretary of the Treasury, Janet Yellen, arguably the most important financial figure in our country, and the person in charge of managing the U.S. dollar/ financial system, groveled in front of China’s Vice Premiere He Lifeng during her visit to China

Ms. Yellen bowed repeatedly to the Vice Premiere, groveling much as an emerging market financial official would kowtow to his or her counterpart from a more developed, superior nation upon which the former’s nation relied for aid/ support/ assistance.

See for yourself. And mind you, this is one of NUMEROUS bows.

I wish this was the worst thing about the current state of incompetence for financial/ economic leaders in the U.S., but unfortunately, it’s not. 

No, far worse is the fact that our central bank, the Federal Reserve, or the Fed for short, has become a political entity, as is often the case in emerging markets/ banana republics.

Let me explain.

The Fed, as per its Dual Mandate, is meant to focus on just two things: inflation and employment.

That’s the law. And for most of the last 100+ years, the Fed did focus on these issues above anything else.

No longer.

The Powell Fed is a den of corruption, incompetence, and political activism. In the last few years we’ve witnessed:

1) Scandals in which senior Fed officials were caught trading around Fed announcements. This is insider trading on a banana republic level!

2) The Fed ignoring literally HUNDREDS of signals that inflation was out of control… while still printing over $1 trillion per year and paying billions of dollars to banks.

3) The creation of the worst inflationary storm in 40+ years, all due to Fed incompetence (how did the Fed’s 400+ Economics PhDs and 150 research associates miss that inflation had arrived in 2020-2022!?!)

4) Fed Presidents pushing social justice issues openly in speeches. It’s one thing for them to discuss these things in private. It’s something else entirely for them to push for policies to address climate change, social justice, and other item as FED OFFICIALS.

5) The Fed testing the banking system for “Climate Change Risks.” Mind you, this is the same Fed that didn’t see the regional banking crisis coming, resulting in several of the largest bank failures in history.

All of the above would be downright hilarious, if the damage they inflicted on ordinary Americans wasn’t so devastating.

Let me be blunt here…

Few if any of us got rich during the pandemic. Multiple Fed officials did by trading on insider information. By the way, this continues today, with at least one Fed President caught actively trading during Fed “black out” periods when it’s illegal to do so. He wasn’t fired or forced to resign either.

Similarly, inflation has taken a heavy toll on Americans. And yet, NONE of the Fed officials who ignored the countless signals that inflation was appearing in 2020-2022 have been fired. And why would they? These are politically connected academics who haven’t worked in the private sector in years, if ever!

Again, the U.S. is an emerging market. All the signs are there: abject corruption, incompetence, politicizing everything, etc. The U.S. that existed from the 1940s until the mid-’00s is gone forever. And most of us are now on our own to navigate this new environment.

The only good thing that will come from this is that if you know how to invest in emerging market regimes, you can stand to make a fortune in the coming years.

Indeed, this kind of tectonic shift represents a “once in a lifetime” opportunity. Some investments are going to produce fortunes. Others will lose money for years… if not decades. And those investors who are positioned correctly for this will thrive while others struggle.

We recently outlined a unique “of the radar” investment that will outperform in this new economic landscape in an investment report called Billionaire’s “Green Gold.”

It details the actions of a family of billionaires who literally made their fortunes investing in emerging markets. And they just became involved in a mid-cap company that has the potential to TRIPLE in value in the coming months.

Normally this report would be sold for $249. But we are making it FREE to anyone who joins our Daily Market Commentary Gains Pains & Capital.

To pick up your copy, swing by:

https://phoenixcapitalmarketing.com/GreenGold.html

Posted by Phoenix Capital Research in Banana Republic Corruption, The U.S. is an Emerging Market