Let’s cut through all of the noise.
The #1 rule for investing is “don’t fight the Fed.” The Fed is the single most powerful force in the markets.
If the Fed is printing money to force markets higher… markets will go higher. And if the Fed is tightening monetary conditions to force markets lower… markets will GO LOWER.
I bring all of this up because from March 2020 to March 2022, the Fed printed almost $5 TRILLION in money. This money was used to push the markets almost straight up.
The consequence of this was raging inflation.
Inflation is now over 8%. And it has become the #1 issue for Americans. This is not a left vs right issue. Whether you believe polls from Fox News or CNN, inflation is the single most important issue for Americans today.
Supply issues are a BIG part of this. Economies are not like light switches: you can’t just turn them off… and then turn them back on without major problems. And the biggest problem is that the supply chain was broken.
Lower Supply + Regular Demand = Higher Prices/ Inflation.
The Fed has admitted it can’t do anything about the supply chain. It can’t print oil or dock workers/ truckers/ semiconductors… any of the things that are making it harder to find supplies today.
All the Fed can do is CRUSH demand… by triggering a recession.
Fed Chair Jerome Powell LITERALLY spelled this out yesterday when he told audience members at the Wall Street Journal Future of Everything Festival, “we have to slow growth.”
This is the single most powerful central banker in the world telling us to our faces that the Fed will crush economic growth (read: trigger a recession) in order to destroy inflation.
Bear in mind… stocks are already down almost 20%… and the Fed has only just stopped printing money. Put another way, it hasn’t even begun draining liquidity yet!
What happens when the Fed is forced to raise rates to FIVE percent (they’re 1% now)? What happens when it tries to shrink its nine TRILLION dollar balance sheet by $1+ trillion.
You get the idea.
The Mother of All Collapses is coming!