I Last Longer Than Jay Powell!

The market isn’t satisfied with only 8 minutes in The Hole. Were you forwarded this email? [Sign-up to Rude Awakening here.]( [The Rude Awakening] August 29, 2022 [WEBSITE]( | [UNSUBSCRIBE]( I Last Longer Than Jay Powell! - Powell finished as quickly as he could and then was outta there! - His speech was the shortest ever at Jackson Hole. - The market cratered on Friday, concluding this sucker’s rally. Recommended Link [Biden to Replace US Dollar?]( [Click here for more...]( A former advisor to the CIA and Pentagon predicts President Biden plans to retire the US dollar we know – and replace it with a digital “spyware” currency. Your US dollars could be confiscated – or made worthless. It is underway now. On March 9, Biden signed Executive Order 14067, which could pave the way for the new US currency. AOC tweeted her support. Dems could use this to hold onto power indefinitely. [View This Warning Now]( Sean Ring Editor, Rude Awakening Good morning on this fine Monday! I’m back from my trip to Doha and spent a pleasant weekend with the family. We left Milan on Saturday afternoon after a pleasant walk around the high-end shopping district. Located next to the Duomo, it made me reconsider my view of the city. My favorite place is the la Felltrinelli’s located under the famous Galleria Vittorio Emanuele II adjacent to the Duomo. La Felltrinell’s is a famous bookstore chain in Italy, akin to Barnes and Noble in the US or Waterstone’s in the UK. This particular store looks like it acted as a cavernous wine cellar for Milan’s richest. Credit: [urbanfile]( We walked out with ten new books, as my library is still stranded in Cebu. You may remember the costs are exorbitant to move heavy goods worldwide. So I’m taking the time to rebuild my library anew! I now think Milan is good enough for a few days. Who knows? If I get to know it better, perhaps I’ll think it’ll be worth more. As for Sunday, we walked around a great flea market they hosted in Asti. Pam and I like the old stuff. So she picked up a couple of cheaply priced antiques to spruce the apartment up. But enough about my weekend. Jay Powell’s swift entry and exit in Jackson Hole reminded me of the days when I didn’t have to care what the other half thought. FYI: All Powell quotes come directly from [this speech]( which you can read in its entirety in under 10 minutes. “Treat ‘Em Mean, Keep ‘Em Keen!” This seems to have been Powell’s intention on Friday. That wonton harlot known as The Market wanted more. More punch bowl. More free money. More inflation. And Powell just wasn’t having it. “Today, my remarks will be shorter, my focus narrower, and my message more direct.” Translation: Honey, it’s my turn. You’re just going to do me a favor today. Powell continued: The Federal Open Market Committee's (FOMC) overarching focus right now is to bring inflation back down to our 2 percent goal. Price stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy. Without price stability, the economy does not work for anyone. In particular, without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all. The burdens of high inflation fall heaviest on those who are least able to bear them. Well, gee, Jay. I’m glad you think so. Because for nearly the entire time you’ve been the Fed Chairman, you’ve utterly ignored the potential - now current - impact of printing money out the wazoo! Powell goes on: Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance. Reducing inflation is likely to require a sustained period of below-trend growth. Moreover, there will very likely be some softening of labor market conditions. While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain. Translation: Powell will raise rates, increase unemployment, and lower growth to get what he wants. But he’s doing it for your own good. My question is this: why didn’t he do this the entire time he was in office? Recommended Link [[NEW]: URGENT BRIEFING ALERT]( [Click here for more...]( In between inflation…war…sanctions…and rate hikes… It seems today’s market is simply bouncing from one big surprise to the next. But according to Jim Rickards… (former advisor to the White House, Congress, and the U.S. Intelligence Community)… …[what’s right around the corner could be much bigger.]( And he says if you aren’t prepared for what’s coming, then your portfolio could get blindsided (again). But if you know exactly what to do… [Then you could flip the next financial shocker into a world of fortune-building opportunity.]( Bottom line? Take 1-minute to watch this brand-new [urgent briefing…]( …before the next big surprise hits your portfolio. [Click Here Now]( It’s as if Powell had a blackout, came to, and realized the ship has been rudderless since he started. Or since Yellen started. Or Bernanke. Or Greenspan. He’d be right on all counts, by the way. Powell then said: Inflation is running well above 2 percent, and high inflation has continued to spread through the economy. While the lower inflation readings for July are welcome, a single month's improvement falls far short of what the Committee will need to see before we are confident that inflation is moving down. Translation: Last month’s inflation reading isn’t enough for the FOMC to stop raising rates. At our most recent meeting in July, the FOMC raised the target range for the federal funds rate to 2.25 to 2.5 percent, which is in the Summary of Economic Projection's (SEP) range of estimates of where the federal funds rate is projected to settle in the longer run. In current circumstances, with inflation running far above 2 percent and the labor market extremely tight, estimates of longer-run neutral are not a place to stop or pause. Translation: “I said I’m not stopping here! Do you get it?” July's increase in the target range was the second 75 basis point increase in as many meetings, and I said then that another unusually large increase could be appropriate at our next meeting. We are now about halfway through the intermeeting period. Our decision at the September meeting will depend on the totality of the incoming data and the evolving outlook. At some point, as the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases. As my erstwhile colleague, Jim Rickards, once said, “Three steps and a stumble.” If they raise another 75 bps in September, I think it’s the market’s death knell. Just in time for another market crash. With that in mind, let’s check the SPX: The S&P 500 bounced off its 200-day moving average. Not a good sign. It’s now had two straight down weeks after market watchers swore the bottom was in. Anyone who got long in the last two months will get carted out. This was another sucker’s rally. My call for 3,213 remains. By the way, SPX futures are down another 1% this morning as I write this piece. What Was Powell Trying to Do? Uh oh. Powell quoted Volcker in his speech: As former Chairman Paul Volcker put it at the height of the Great Inflation in 1979, "Inflation feeds in part on itself, so part of the job of returning to a more stable and more productive economy must be to break the grip of inflationary expectations." So Powell really is trying to do a Volcker? Maybe. But I must say I agree with Wharton School economist Jeremy Siegel. From [Bloomberg]( “Although there is inflation in the pipeline, particularly the statistical pipeline, my feeling is we should not get overly aggressive at this point,” he said, citing commodities prices and a slowdown in the housing market. “I see inflation as peaking in the real world, although we’ll remain high in the statistics.” He thinks the Fed needs to slow down with its rate increases. But if Powell has a savior complex, he won’t stop until he’s crashed the stock market. Wrap Up Damn the Dot Plot! We’re going all ahead flank in the fight against inflation! But this is like sprinting… after the gun sounded 10 seconds ago. Powell is late to the party he himself financed and can’t get that punch bowl away from the guests fast enough. His eagerness to hike would have been laudable - if it were done sometime last year. But he waited, called inflation “transitory,” and didn’t get up off his derriere until the lagging macro numbers started to come in. He’s been a disaster as Fed Head, and his tenure won’t be remembered well. Batten down the hatches. We’re in for a rough Fall. All the best, Sean Ring Editor, Rude Awakening [ARCHIVE]( | [ABOUT]( | [CONTACT US]( Rude Awakening is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to Paradigm Press delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from Rude Awakening, feel free to [unsubscribe](. Please read our [Privacy Statement.]( If you are you having trouble receiving your Rude Awakening subscription, you can ensure its arrival in your mailbox by [whitelisting us.]( © 2022 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. 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