#inflation #government #Fed
… now they are powerless to do something, anything about it, as they have printed over $20-T in new money“– Paul Ebeling
The Fed has tried buying every asset you can name: corporate bonds, municipal bonds, student loans, auto loans, Treasuries, Mortgage-Backed Securities, etc..and inflation never ran Hot!
Now, with a simple move, government bureaucrats have accomplished what Central Bankers failed to do.
By shutting down the economy, the government has managed to create crises in both labor: people are not returning to work or have changed careers completely, and the supply chain.
These crises in labor and the supply chain are resulting in lower supplies of much needed resources. Factories are operating at partial capacity or in some cases, not operating at all.
Much lower supplies + normal demand = HOT INFLATION.
There’s nothing central banks can do to fix this. The Fed cannot 3D print employees or Crude Oil.
Plus, QE does not suddenly make factories operate normally. Yield curve control does not start unloading cargo ships that are sitting at docks.
The Biden administration announced that it will try to force Crude Oil prices lower by releasing 50-M bbls of oil from the SPR (Strategic Petroleum Reserve) over the next few months.
This number sounds like a lot till you consider that the US consumes 20-M bbls per day.
Again, this kind of inflation cannot be stopped by the Fed or the government. And it has presented us with the opportunity to profit from once in a lifetime event: the arrival of an inflationary crisis that cannot be slowed or stopped by the Fed or fixed by government policies.
During the last major bout of inflation in the 1970s, smart investors locked in gains in the 4X digits or 1,000% or higher. And that version of inflation was the kind the Fed could easily stop!
So you can imagine the profit potential of this crisis today.
Have a prosperous day, Keep the Faith!