In Dallas Powell Says Fed Policy And Economy Are Just Right Days After Voters Across The Nation Weren’t Buying The Goldilocks Economy Pitch
Powell and the Fed rely on artificial government economic statistics for their economic models and rate policy, while voters deal with the real economy. I strongly argue that voters have their fingers on the pulse of what is really happening with the economy. Meanwhile, the bond vigilantes are saying that inflation is too damn high.
The Fed would have everyone believe that their rate policy and the economy is just right and it is a Goldilocks economy. While voters and the bond vigilantes are saying stagflation is either upon us or getting uncomfortably close.
What is a poor gold bug to do?
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Powell gave his public relations pitch on the economy earlier today in Dallas. After he gave his opening remarks, he sat down for some questions. The first question that caught my attention was when he was asked for his thoughts about what voters were saying on election day about the economy. Instead of answering it, he pretty much ignored the question and didn’t feel he needed to give any answer.
His total disregard for how the voters are feeling about the economy is inexcusable. Today he ignored the question and last week in the press conference after the Fed meeting, he had no comment about the voters’ concerns about the economy.
Which shows a serious disdain for the voters opinion on the economy, pretty much saying that their economic models using artificial government economics are superior. They aren’t, voters understand the economy much better than the Fed economic models.
Economic models based on artificial government economic data is a perfect example of garbage in and garbage out. While voters deal with the actual jobs market, they have to deal with real inflation when they have to buy everything.
They don’t have the luxury of living in an economy based on fake economic statistics, they live in the real economy. As always, elections are about the economy, stupid. Voters were very clear, they don’t believe the Goldilock economy narrative coming out of the Fed.
Since the Fed meeting in September, when they went with a half-point cut. Which is almost always reserved for times of economic upheaval. The bond vigilantes haven’t agreed with the idea that the Fed can declare victory over inflation.
The bond vigilantes are on a buyers’ strike driving yields higher. Which doesn’t give the Fed a green light for a rate cutting cycle. If the Fed wants to stay on a rate cutting cycle, they are going to have to use their balance sheet to manipulate yields. QE during a Goldilocks economy sounds off to me.
I think Trump and his team heard voters clearly about their unhappiness about the economy. If the voters are right, they are saying that the economy is much weaker than the Fed models are suggesting. I doubt they want a recession early in Trump's second term.
Equally as troublesome for Trump is that the voters are saying the economy is weak while bond vigilantes are saying that inflation is too damn high. This paints a picture of stagflation, not a Goldilocks economy.
The last time there was stagflation, it was extremely bullish for gold. Get gold yet?
All the best,
Allan Barry Laboucan
