We watched this week as President Joe Biden announced from the White House the reappointment of Jerome Powell to another four-year term as Fed chairman.
This, said Biden, will put us in a position to “attack inflation.”
If we were churlish, we might ask, “What inflation?” That’s because Powell rolled out his “transitory” talking point back in March and has reaffirmed his view repeatedly including this month that inflation is only “transitory.” Perhaps in the metaphysical sense that all life is impermanence, he is right, but with the year coming to an end, inflation is still here in a big way.
If you are waiting for the Fed to stop inflation, you will want to park your money in gold while you wait. It’s going to be a long wait, and the purchasing power of the dollars you have will be eroding the whole time.
It’s hard for the authorities to keep up this transitory business. Powell admitted recently that inflation could persist until “late summer” 2022. It’s the new Fed talking point.
Treasury Secretary Janet Yellen now says, “I think in the second half of next year, we’ll begin to see inflation subside and the way you’ll be able to see that is by looking at monthly inflation rates.”
Meanwhile, we could point out to the president that inflation is not something that needs to be attacked. It just needs to be stopped. The authorities need to stop the electronic equivalent of money printing because it dilutes the value of the dollar. Including the ones you have been saving for your retirement.
But instead, we will just be mischievous and thank Chairman Powell for giving us the most expensive Thanksgiving ever.
Consumer prices have risen 6.2% and producer prices are up 8.6% over the last 12 months. Some say the government’s numbers understate the facts. Perhaps. The cost of the Thanksgiving spread has jumped 14% this year, according to the American Farm Bureau.
We can tell you how much money the Fed has printed under Mr. Powell’s watch: $4.255 trillion. In less than four years he and his colleagues have almost doubled the Fed’s made-up money assets. That is high-intensity money pumping.
There seems to be a strange code of silence around this. When you come right down to it, creating money is really the only thing the Fed does, and yet neither Biden nor Powell mentioned it. It’s as though Apple didn’t mention how many iPhones it sold. But the Fed has the commanding heights in this discussion since the media mostly parrots its talking points, which is why most people don’t know what is happening to their money.
By the way, the Farm Bureau wants you to know it is not the farmers’ fault that things cost so much more. In constant dollars (without inflation) the cost of Thanksgiving dinner is pretty flat over the last 20 years.
Meanwhile, the St. Louis Fed tweeted out that we could eat soybeans for Thanksgiving: “A Thanksgiving dinner serving of poultry costs $1.42. A soybean-based dinner serving with the same amount of calories costs 66 cents and provides almost twice as much protein.”
At least they didn’t tell us to eat bugs. At least not yet. And for that we are thankful!
We are grateful as well for all of our friends and clients. And for all your friends and colleagues that you have referred to us! Have a wonderful Thanksgiving, and best wishes from all of us at Red Rock Secured!
Let us provide you with a free one-on-one consultation to help you protect your retirement.
The opinions, beliefs, and viewpoints expressed in this article do not necessarily reflect the opinions, beliefs, and viewpoints of Red Rock Secured LLC or the official policies of Red Rock Secured LLC. Red Rock Secured LLC is not a financial advisor, is not licensed to provide investment advice and neither provides investment nor financial advice. Red Rock is a product specialist that can help evaluate your precious metals purchase options.