As I keep stating, the big theme for 2021 will be inflation. And a Biden administration will only accelerate this.
If you doubt me, consider that Biden has picked Janet Yellen as his Treasury Secretary.
Previously, Yellen ran the San Francisco Fed before eventually rising to be Fed Chair under the Obama administration. Throughout her tenure in these positions, she proved to be someone who LOVED using political reasoning to justify printing more money or easing monetary conditions.
In 2014, soon after taking the helm as Fed chair, Yellen gave a speech in which she stated that the Fed would have done a better job predicting and then navigating the Great Financial Crisis of 2008 if it had maintained more “diversity” in its workforce. She subsequently followed this up by creating the Fed’s first task force to improve the gender and ethnic diversity at the Fed.
Why does this matter?
Because NOWHERE in the original Federal Reserve Act of 1913, nor in its 1977 amendment, is there any mention of ANY of this stuff. The Fed’s job as explicitly stated in the legislature is to use interest rates to insure economic growth with minimal inflation.
THAT’S IT.
In picking Janet Yellen as his Treasury Secretary Joe Biden is effectively giving the purse strings for the Republic to a social justice warrior: someone who believes that social justice issues should guide monetary policy.
In plain terms, all of this means MORE MONEY PRINTING.
Think about it… what precisely could the Treasury do about diversity? The Treasury is responsible for printing money and moving it around. So, if the Treasury decides to take on political projects with the intention of making the economy “fair” all it really means is that the Treasury will be funneling more money into the economy.
Remember, the Treasury created the credit facilities through which the Fed bailed out the entire financial system in March 2020. It was through these credit facilities that the Fed began buying:
1) Municipal bonds.
2) Corporate bonds.
3) Corporate bond ETFs.
4) Asset backed securities, including assets backed by money market funds, auto loans, student loans, and certificates of deposit.
As such, the Treasury represents the conduit through which the Fed funnels record stimulus into the financial system.
As I’ve stated previously, the Fed spent $3 trillion between 2008 and 2016 fighting the Great Financial Crisis and its aftermath. The Fed spent that same amount in seven months in 2020.
It was only able to do this legally by using the Treasury as a conduit. And we also need to remember, that the Treasury was responsible for the dispensation of the $2 trillion in stimulus for the CARES act in 2020.
And Joe Biden has just picked Janet Yellen to run this organization: a career academic who has never worked in the private sector and who strongly believes that she should use her position to combat political issues such as diversity and climate change.
Again, all of this means MORE money printing is coming to the U.S.
This is the BIG theme for 2021 no matter what else may come: more money printing, more inflation, and more explosive moves in inflationary assets.
Those investors who are well positioned to profit from it could see literal fortunes.
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 are making just 100 copies available to the public.
As I write this there are just 49 left.
To pick up yours, swing by:
www.phoenixcapitalmarketing.com/inflationstorm.html
Best Regards
Graham Summers
Chief Market Strategist
Phoenix Capital Research