Pivoting Away From Nuclear War - QPOL Issue #36
A deeper look at the Fed’s motives.
The positive outcome of the jobs report assured markets that there won’t be a recession in 2023. Powell knew the numbers before they were released Friday the 3rd, and gave the markets what they wanted and raised the FFR by 25 bips instead of 50. Everybody fled to dollars obviously because some confidence in the US economy was restored and seen in the dollar index. Hello, capital flight my old friend.
The fact that Powell didn’t have to go 50 means his monetary policy is working. He reassured markets the economy was healthier than expected, and the data in the jobs report confirmed it. Even though the American economy is not by an Austrian’s standard of “healthy”, it’s still the cleanest shirt I’m the dirty laundry.
Across the pond, the euro had a correction. This move was very similar and as important (if not more) than when Powell raised the reverse repo rate by 5 bips on June 16th 2021. Doing so made the euro plunge overnight as capital flew into dollars to get yield at the Fed.
It didn’t take Powell to raise 50 in order to keep pushing his boot down on the neck of the ECB. Those markets are weak as is. Lagarde having raised interest rates by 50 bips admitted that inflation is a problem. She said they’re ending sovereign QE in May and will start sovereign QT (meaning she’ll just stop buying it rather than selling it because nobody wants shitty Eurodebt).
However, she has now backed out of the decision to not raise another 50 in May. Why? - Because she’s planning on monetizing more debt to buy back corporate debt from companies that are on board with the ESG/Climate change agenda and are meeting their quotas and maintaining compliance (AKA a last-ditch effort to bail out BlackRock). Lagarde is effectively buying back the equivalent of mortgage backed securities but for ESG. It’s is trash debt that nobody wants. Now that the ECB effectively owns all of Europe’s sovereign debt, they’re working on corporate debt.
This is the Davos goal: nationalize the EU economy and implement their Great Reset in the 2020’s as opposed to 2030 or even the original plan 2050. The globalists are running out of options as Powell keeps raising and so they’re going pedal to the metal towards communism.
Now ask yourself who’s NOT doing this…America. Rather than consolidating financial power of the free-ish market to a nationalized model, the Fed and the US banking sector continue to pass policy focuses on the preservation of private capital via the commercial banks issuing loans that is indexed to a domestically focused, market-driven interest rates - SOFR.
Team Fed is not on the Davos/globalist train. There should be no confusion about this, nor should only raising rates by 25 bips be seen as them throwing a bone to Davos. Jaime Dimon stating the Fed plans to go beyond 5% and that the oil industry is here to stay for another half century is clear evidence that team Fed is working against any and all agendas that picture a world without them and their incentives in it.
In attempt to bang the final nail in the coffin of their goal to destroy the US and make the Fed finally pivot, Davos will try to drag the US into fighting the war against Russia. Then and only then would the Fed be forced to “pivot” by reluctantly monetizing the debt Congress would print to fund the war effort. Top officials at the Pentagon and notable authorities such as Douglas McGregor have noted many times the US is not ready to fight this war. Nobody benefits from nuclear war, not even the banks that fund it on both sides. 25 bips was not Powell “pivoting.” It was him being wise with reacting to the (albeit faulty) data and being efficient with monetary policy. If anything, his monetary policy is a pivot away from war.
Go #TeamFed.
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~ Phil Gibson
I love reading your stuff because you’re like the only person in the entire known universe who thinks the fed is good.