BigDKnight (@BigDknight)

Kevin Warsh between a Rock & a Hard Place on Inflation QUESTION: Kevin Warsh said that responsibility for 65 months of inflation is the Fed’s fault yet he seemed to to imply price stability and the speed of inflation is more important. Some say he just just flipped the script on inflation. Can you decipher what this means? HG ANSWER: Kevin Warsh has noted that the rise in long-duration Treasury bond yields had effectively done some of the work for the central bank. Higher bond yields at the long end of the yield curve can raise borrowing costs and temper above-average inflation. So he is saying the market is doing part of the job. He pointed out the importance that inflation not only decline to the FOMC’s long-term target, but that it does so in a timely manner. Kevin Warsh cannot say what I am about to explain because this is a CONFIDENCE game. FedDis Y Tech 6 10 26 Look, rates are going higher and the Fed is NOT in control. Even what Kevin Warsh has said that the responsibility for inflation lies with the Federal Reserve is total BS. That is the standard Keynesian propaganda crafter during the era of the gold standard when the US had a balanced budget. The absurdity that the stock market will crash if rates rise is the propaganda of the socialists from the Keynesian era. Trump Rally 2017 2020 FedDis M 2013 2023 Tech When you even visually compare the stock market to interest rates there is no such correlation that interest rates up stocks down. Interest rates are the market demand for compensation for inflation (the debasement of the currency as Henry VIII pulled off). CALLMONY MA This is not my personal opinion. This is simply FACT. I do not repeat what everyone else says to conform with the consensus. The truth is very clear. The stock market has NEVER peaked with the same level of interest rates even once. I retired from managing money, been there done that. I am not soliciting money for some investment, nor am I running for Congress or local dog catcher. I am a trader that realizes if you trade on theory, you go broken very quickly. The market peaks with with a third variable – expectation. If you believe the market will double, you will pay 25% interest. If you do not believe the market will rally by 1%, you will not borrow at 0.25%. It has always been the spread between the interest rates and expectations. This is the real meaning of Kevin Warsh’s statement, trying to instill confidence. Fed v Congress1 The Fed cannot control the fiscal side. The development of national debts changed everything. The exchange rate between currencies today rests on CONFIDENCE. The entire idea of inflation and the theories of the Austrian School are so outdated it becomes laughable. This was an era when the exchange rate between currencies was the metal content. That was the entire observation of the bad money drives out good by Sir Thomas Gresham who was the crown agent in the Armesterman exchange during the reign of Henry VIII. He saw the resistance to lending kings money when they would repay with debased coinage. Henry VIII Debased Groats The 15th century saw the development of more systematic, long-term debt in city-states, while the 16th century witnessed the rise of massive, empire-scale borrowing that could be considered a more “aggressive” phase. During the 1400s, borrowing became a regular tool for state finance, moving beyond occasional loans from wealthy merchants. Instead of relying only on the monarch’s personal credit, states began to create long-term debt instruments. In places like Italy and Catalonia, this took the form of public annuities (often called censals or rentes), which were sold to investors and guaranteed by future tax revenues. 1298 Banking Crisis The Bonsignori bank was known as the Gran Tavola, which had become the most powerful of the Italian merchant banking firms throughout Europe between 1255 and 1298. The Gran Tavola was indeed the greatest bank of the 13th century with branches in Paris, Marseille, Genoa, Bologna, and Pisa in addition to the main office in Siena. They fell victim to Philip IV of France. Philip IV AR Denier Debasement Philip IV of France was also strapped for funds. He chose the debasement of the coinage which was massive. Philip had no other course of action to meet the expenses of the war. He began with a massive debasement of the coinage. Silver began to migrate out of France. This debasement only accelerated after 1298 when Philip IV confiscated all the assets Italian bank known as the Gran Tavola in France on claims that they owed him money, without netting anything with respect to his loans owed to them. continued within: https://www.armstrongeconomics.com/markets-by-sector/interest-rates/kevin-warsh-between-a-rock-a-hard-place-on-inflation/?awt_a=1JPVU&awt_l=1VVi.&awt_m=95N8N.2OdS4vxrVU&utm_source=aweber&utm_medium=email&utm_campaign=new-post-feed-entry-title