How to Front-Run the Fed

[Bill Bonner’s Diary]( How to Front-Run the Fed By Bill Bonner Wednesday, May 13, 2020 – Week 9 of the Quarantine [Bill Bonner] SAN MARTIN, ARGENTINA – Today, comes news that the Democrats are pushing for more fake money. Here’s News4Jax.com: …Democrats are pushing hard to include direct assistance to Americans, including recurring payments of up to $2,000 a month during the crisis. And here’s Bloomberg this morning: House Democrats proposed a $3 trillion virus relief bill Tuesday, combining aid to state and local governments with direct cash payments, expanded unemployment insurance and food stamp spending as well as a list of progressive priorities like funds for voting by mail and the troubled U.S. Postal Service. Good golly, Miss Molly! Recommended Link [219 American CEOs Quit – BEFORE the pandemic? (Bill weighs in…)]( [image]( Did you notice that a record number of CEOs willingly left or lost their jobs in January? 219 CEOs in America – gone in just one month. (Keep in mind, this was before the pandemic.) Tom Dyson noticed… and he knows why. It’s all part of why [Tom and I are hosting an Emergency Investment Summit on May 20th](. Tom wants to share with you exactly why he went “all in” 18 months ago… and where exactly he recommends putting your money now. I will be dialing into the summit as well. But I’ll likely be “audio only,” as I’m sequestered here in remote Argentina, with a shoddy Internet connection. I hope you’ll join us. [Just click here to enter your information, so we can save your seat](. ~Bill Bonner [Click here]( -- Sh*thole Finance Already, the federal deficit is expected to reach over $4 trillion this year. That’s four times last year’s deficit… and about three times the worst deficit of the 2008-2009 crisis. Add $3 trillion more? Heck, why not! When this new stimulus debt bomb is dropped, it will blow up the deficit to more than 30% of GDP. This is sh*thole finance, for sure. [In an era of disease, this “new cure” could be one of the most powerful medical technologies of our time.]( Of course, we doubt that Nancy Pelosi et al. will succeed in adding another $3 trillion. A few Republicans – some long-atrophied instinct suddenly stirring, like dull roots suddenly brought back to life by warm spring rain – will grouse and grumble. But, most likely, Mr. Trump – one of the biggest spenders ever to inhabit the White House – will bring them around. Recommended Link [(Bizzarro World) Fed nominee launches his own cryptocurrency!]( [image]( But that’s just the tip of the iceberg. There’s a bigger story coming… And it could forever change the way you save, spend, invest, and retire. Consider yourself warned. This story is unfolding quickly… And once it hits the mainstream, it’s going to be too late… You can get all the details you need to prepare for this massive change – as well as profit from it – by clicking the button below. [Learn the full details here]( -- Inflation on the March Meanwhile, comes this ominous headline from CNBC: US grocery costs jump the most in 46 years… Is consumer price inflation already on the march? Let’s take a closer look. One thing we know for sure: All this extra money must come from the Federal Reserve. There is no other source. And since the Fed has no real money, it must “print” fake money. We know, too, where that will lead… just as it does in every other sh*thole country. Inflation? You got it, Dear Reader. But wait. It’s not that simple. [Amazing 17-second Video Reveals Key to Tech Fortune…]( Recall that the Fed “printed” beaucoup money after the crisis of 2008-2009, too. And we don’t remember consumer prices rising then. So, what gives? Back then, the Fed was pumping up Wall Street. Stocks rose as the extra money inflated the whole financial sector. Main Street got little of the Fed’s money. But now? Won’t the Fed’s reckless money-printing drive stocks up again? Won’t the Dow hit 50,000? Shouldn’t we front-run the Fed by going “all in” on the stock market? Recommended Link [“The Man Who Refused $100 Million”]( [ad_img]( Legendary stock picker Teeka Tiwari—who picked Apple way back in 2003… and Bitcoin in 2016—was recently asked to manage $100 million… But he refused. Why? Because he recently discovered what he believed will be [his single biggest investment winner]( A novel technology (not 5G!) the World Economic Forum believes will grow 295,762% over the next 7 years… And Teeka wants “the average” guy to get a shot, too. “This shouldn’t stay in the hands of the elite only,” says Tiwari. As you’ll see in Teeka’s new exposé, his reasons for doing this are personal. And it could lead to a stunning $1.6 million windfall… [See Teeka’s Personal Story here]( Government-Induced Nightmare Maybe. But, this is not the same money-printing as we had during the last 10 years. In the first place, the Fed has less room to maneuver, entering the crisis with, effectively, no rates to cut. Real rates (adjusted for inflation) were already below zero when this crisis began. This time, it’s federal spending – not interest rate cuts – that will have to boost the economy. In the second place, the system is more fragile than it was before, simply because the Fed has encouraged more borrowing and less saving. Total debt in the U.S. rose some $21 trillion over the last 10 years, while GDP rose only $7 trillion. In the third place, today’s economic damage is much more severe. Total unemployment in 2009 reached 10%. Today, it is racing to 25%. In the fourth place… and this is the one that will count the most… this is not just a bubble-busting financial crisis… This is a government-induced economic nightmare. And combating it, the feds are not just feeding money to their friends on Wall Street. This time, trillions in fake money is going to Main Street. This means that a lot of the new money will go into the hands of ordinary people… and thus, into consumer prices. Eventually, we’ll see much higher levels of “inflation.” Three Components But wait. We are still in a deflationary downdraft. One poll showed that half of all U.S. small businesses expected to have to close up shop within six months. Two of our favorite restaurants in Baltimore have already closed; they say they won’t reopen. Surviving businesses – especially in the hospitality trade – will only re-open slowly… if at all. They’ve taken huge losses. They won’t be eager to lose more. Consumers, too, will be reluctant to spend. They’ll worry about a “double dip” recession… or another big wave of coronavirus deaths. There are three components to inflation. In addition to the volume of money itself, there is the velocity of money, v . This is the rate at which money changes hands. And there’s m – the “money multiplier” – the rate at which the base money supply is magnified by lending. When people are wary, they neither spend nor borrow. So the base money just sits there. And while the Federal Reserve can control its own balance sheet (the monetary base), it can’t control v or m . And the consumer price inflation we expect won’t really start to bedazzle us until v and/or m start to move. Under these circumstances, consumer price inflation will have to wait. We just don’t know how long. But here at the Diary, we have faith that, as former Fed chief Ben Bernanke put it, “a determined central bank can always create positive consumer price inflation.” Front-run the Fed So what should you do? The big money over the last 10 years was made by front-running the Fed – buying stocks and bonds, knowing that the Fed would pump them higher. How can we do that today? Once again, we know what the Fed will do. It will “print” money on a scale never before seen in America. And the result will almost surely be higher rates of consumer price inflation – but only after the deflationary impulse has been overcome by the determination of the central bank. In this setting, there’s only one good choice. When prices are falling (deflation), you want to be in “cash”... but in the kind of cash that won’t disappear when inflation picks up. Instead, you want to be in the kind of “cash” that will go up when v and m start to move. That’s when consumer prices rise sharply… and this “cash” goes wild. It’s what colleague Tom Dyson has been writing about almost every day in his [Postcards from the Fringe]( newsletter. This cash is “truth in money” – gold. Tom has his own ideas about how to “front-run” the Fed. He sees a dark story unfolding in America right now. Tom will explain more fully in his Emergency Investment Summit next Wednesday, May 20 at 8 p.m. ET. And he’ll tell us how he plans on making millions from the coming crisis. We want to know. And if you’d like to know, too, [just click here to register](. More to come… Regards, [signature] Bill Like what you’re reading? Send your thoughts to feedback@rogueeconomics.com. FEATURED READS [The Dow-to-Gold Ratio Says It’s Time to Buy Gold]( Bill’s colleague and Legacy Research editor Chris Lowe breaks down Tom’s Dow-to-Gold ratio… and explains why Tom is currently sitting on the sidelines in gold… [House Proposes Additional Coronavirus Stimulus Bill]( House Democrats are set to vote on another C-virus stimulus bill Friday, called the Health and Economic Recovery Omnibus Emergency Solutions Act, or “HEROES Act.” Read on to learn what’s in the bill… and how it could affect you. MAILBAG Dear Readers respond to Dale A.’s comment from Monday’s mailbag, in which he said: What is destroying America is the inherent racism of its white majority… America is the most racist country that has ever existed in the history of the world. As long as white Americans fight tooth and nail (many of them longing ardently for a “race war”) to keep Native Americans, blacks, hispanics, Asians, and all other non-whites “in their rightful place” of being subservient to the white man, America will power-dive into its well-deserved decline, crash and burn in Hell. – Dale A. I do believe racism is a problem in this country, but only because it is kept alive by the powers that be. Did Dale forget we elected a black president (and probably some of those who voted for Obama may have voted for Trump)? Dale seems to be more angry and releasing frustration than he is common sense. Obama could have been a great influence to lower racism while he was in office for eight years, but instead, his actions added to it. It appears to me that racism is alive and well and Dale is keeping it alive. The very thing he claims is the problem in this country. – Steven K. We are not the most racist country. Other countries still have slavery, and others have had slavery for much longer. He needs to go to a history class. Blacks are incarcerated because they commit the most crimes. Watch your local news every night. Has he ever spoken to an Asian or Hispanic person? Because their countries, perhaps not the people themselves, are very racist. It’s actually people like Dale, who in my opinion, are the reason for the racism in this country. We went backwards many years while Obama was president and now we have a larger social divide than ever. – Patti H. There is some racism here just like in all countries, but I have never seen the likes of racism in this country UNTIL a black man was elected. HE was the one that got the ball rolling on all the skin color issues. I knew when I started listening to his Reverend Wright and the things coming out of Michelle Obama, that THEY were the racists. – Wanda C. While others continue the C-virus conversation... You miss the point that Dr. Fauci is doing what I, as a taxpayer and veteran of the Cold War, want him to do. If his measures prevent my catching the coronavirus, as they have so far, then I support them. I want to survive. – Charlie N. Interesting, the two-dimensional money/life view with which you approach death by COVID-19, and the intrusions of government likely to produce death by economic insanity. Certainly there’s more beyond that paradox, in which you seem to opt for money over life and see the lockdown as “a sin against our species.” Are we talking about Homo Sapiens or Homo Sapiens Sapiens when it comes to species’ abilities to make good choices? And what “sin” of governmental choice are we talking about? – Roger W. This virus is small compared to what is coming. It is now inevitable that we will have hyperinflation. Our economy will be destroyed, the dollar and all, because Congress decided many years ago that they wanted to spend more than the revenues and did not have the guts to raise taxes, so they decided to create debt. It was so easy. Nobody will notice and they were right. This whole problem has been created by Congress. If I were king, all payments to past members of Congress would be stopped immediately. What a sorry bunch! – Bill B. Is racism in America kept alive by the “powers that be”? Is Bill missing the point in his C-virus analysis, as Charlie believes? Write us at feedback@rogueeconomics.com. IN CASE YOU MISSED IT… [Why America’s New “Digital Dollar” Won’t Come Cheap]( The coronavirus stimulus bill originally contained a dark secret… An early draft of the “Take Responsibility For Workers And Families Act”... Contained 31 references to the “digital dollar.” Have a look at the version first debated in the House: Democrats claimed it would be used to create a more “fair and equal” society. But in a surprise twist, [it could also destroy the retirement savings of millions of hard-working Americans.]( Most Americans barely have $500 in the bank – which makes this bill a potential windfall. But for people who have done the right thing and set aside cash for retirement – the effect could be devastating. In fact… By the time you read this, your retirement savings could already be losing value. [Go here right now for details on how to protect yourself... your family… and your retirement.]( [image]( --------------------------------------------------------------- Get Instant Access Click to read these free reports and automatically sign up for daily research. [image]( [The Ultimate Guide to Taking Back Your Privacy]( [image]( [The Three Best Gold Coin Deals on the Market Today]( [image]( [The Trader’s Guide to Technical Analysis]( [Rogue Economincs]( Rogue Economics 55 NE 5th Avenue, Delray Beach, FL 33483 [www.rogueeconomics.com]( [Share]( [FACEBOOK]( [Tweet]( [TWITTER]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. Rogue Economics welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-800-681-1765, Mon–Fri, 9am–7pm ET, or email us [here](mailto:memberservices@rogueeconomics.com). © 2020 Rogue Economics. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Rogue Economics. [Privacy Policy]( | [Terms of Use](