The Federal Reserve Won’t Save Us

[Intelligent Income Daily]( Welcome to Cycles Trading with me, Phil Anderson. My aim with this three-day-per-week e-letter is to introduce you to the most powerful knowledge for building wealth. And that’s the 18.6-year real estate cycle and its key relationship to stocks. Every 18.6 years, property, economy, and stock markets move through a repeating series of peaks and troughs – like clockwork. And the market has followed this cycle for over 200 years. Using this knowledge, I’ve been able to forecast every major market move over my 34-year career. If this is your first time tuning in, catch up on my[background]( how I [predict the markets]( and how I’ll help you avoid [false alarms]( from the mainstream media. Rachel’s Note: [On Monday,]( we introduced you to master currency trader Imre Gams. Today, we’re sharing another insight from him… Plus, he’ll share the details of an experiment he conducted with two trading novices… we think the results will surprise you. --------------------------------------------------------------- The Federal Reserve Won’t Save Us By Imre Gams, Analyst, Market Minute As Mark Twain put it, “It ain’t what you don’t know that gets you in trouble. It’s what you know for sure that just ain’t so.” In early 2021, investors knew for sure that the already low rates would stay that way. It was around that time that I bought my property in Canada. The mortgage broker tried to sell me on a variable rate at around 1.6%. He assured me that rates wouldn’t rise until 2023 at the earliest. Fortunately, I had the knowledge to go against what this “trusted professional” was trying to sell me: [chart] [(Click here to expand image)]( But not everyone does. Especially when around the same time, Tiff Macklem, Canada’s version of Federal Reserve Chair Jerome Powell, told Canadians that “interest rates will be low for a long time.” Of course, it just ain’t so… Central banks hiked rates in unison in late 2021 and early 2022. Today, the average 30-year mortgage is above 7%. Those that took the variable rate are probably regretting it. Just last week, news broke of a family forced to sell the home they bought in 2021. Their mortgage payments jumped from $2,850 to $6,200. I don’t mean to make light of the situation. But in some sense, it’s a perfect illustration of the market we find ourselves in. Recommended Link [Revealed Tonight at 8 p.m. ET: Want to be on the winning side 79% of the time?]( [image]( Don’t trade another day until you see this! PROJECT X: Tonight at 8 pm ET. [JOIN US.]( (By clicking the link, your email address will automatically be added to Jeff’s RSVP list.) -- The New World Order The investing world order you have understood for the past 30 years or so is over. The biggest risk for investors going forward will be relying on the things they think they know for sure. Since the early 1990s at least, investors have known for sure that… - Inflation would stay low. - Credit would be readily available. - Central banks would always be there to save us. If these conditions sound familiar, they should. Broadly speaking, this is the financial and economic environment we have enjoyed for the past 30-odd years. When something lasts that long, people assume it will last forever. But it doesn’t… Investors were pleased with the latest inflation reading here in the United States. The topline figure from the consumer price index (CPI) clocked in at “just” 3.2%. Nevermind that core inflation was close to 5%. And nevermind that this figure calculates a change from July 2022, when inflation was raging the hottest. And never mind that the “official” numbers are inherently untrustworthy. And never mind that this is still a far cry from the Fed’s 2% target. Forget all that and, sure, celebrate the CPI print. [Chart]( What about credit? In May, Powell assured investors that: Conditions in [the banking sector] have broadly improved since early March, and the U.S banking system is sound and resilient. Maybe. Maybe not. By the Fed’s own data, banks are tightening lending standards as if we’re heading into a recession. And that’s a problem for an economy that depends on the continued expansion of credit just to operate. But surely, should anything go wrong, the central banks will be able to “save us.” After all, that’s what happened in 2008 and 2020. Well, this time I’m not so sure… The Fed finds itself between a rock and a hard place. The rock is the obvious signs of a looming recession (the yield curve is as inverted as it’s been since the early ‘80s). The typical “solution” would be to cut rates. But the hard place is the inflation levels that are still nowhere close to the Fed’s goal. There are no good options left. I don’t share this to scare you or make light of the situation. But if you’re relying on the things you think you know for sure, it’s going to be a very rough few years. And don’t let the tremendous rally of the last six months fool you. Every bear market has months-long countertrend rallies that trick investors into letting down their guard. The recent decline in the Nasdaq – down some 7% in the last month – should be evidence of that. So as an investor, what should you do? You Won’t Believe This… One of the best indications of near-term movements in stocks is sentiment and momentum. I know this completely flies in the face of everything you’ve ever been told or believed about markets before. Almost every financial adviser and investor out there relies on fundamental and conventional economic analysis to make decisions. For years, that “buy and hold” approach worked well. I think that’s over. Today, the best returns will be made by traders, the individuals who buy the bounces and mercilessly sell the tops. And contrary to popular opinion, anybody can be a trader… Here’s proof: Over the past few months, I conducted an experiment with two novice traders. The experiment was simple. Follow a handful of rules and execute them without exception. I think the results will surprise you. They had the chance to take more profits off the table than some of the highest paid traders in the world. Tonight at 8 p.m. ET, I’d like to [show you the results]( of what I’m calling “Project X.” More importantly, you’ll see how you can immediately use this information to make better financial decisions in the future. Go [right here]( to learn more. Happy trading, [Signature] Imre Gams Analyst, Market Minute --------------------------------------------------------------- Like what you’re reading? Send your thoughts to [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=RE: Cycles Trading Feedback). IN CASE YOU MISSED IT… [Digital Dollar Could Send These Three Stocks Booming]( A digital dollar (or CBDC) could soon replace the U.S. dollar. Most people could end up holding worthless dollars. But a few could get rich from this new shift. If you know the necessary steps to take right now, not only will you protect your money, you could come out of this shift wealthier than you ever thought possible. But you need to act fast. [Click here to get the exact steps to take right now.]( [image]( [Rogue Economincs]( Rogue Economics 55 NE 5th Avenue, Delray Beach, FL 33483 [www.rogueeconomics.com]( [Tweet]( [TWITTER]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. 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