Trade Secrets: The Fed Is Driving Using The Rear View Mirror

What is going to happen next? [image] [Sign up for Courtney's new Blog! It's free!]() The Fed Is Repeating Their Massive Policy Mistake The Fed made a huge mistake in 2020 and 2021 by keeping interest rates at zero and doubling the supply of money in spite of evidence that the economy was rebounding.They compounded the mistake by keeping the money spigot running even when the Federal governent was sending out a trillion dollars of government cheese to all Americans.Is the Fed now making a similar massive mistake?The short answer is yes. They are realizing that their Drunken Sailor monetary policy led to inflation and now they are hiking rates in a dramatic function to stem the inflation.Here's what their new mistakes are: - The economy is already in a recession so they might not have to be so aggressive - Their aggression is boosting the dollar which will lead to a financial and economic crisis overseas, particularly in emerging markets - They don't believe the economy is in recession because the labor market is still tight. They are ignoring the fact that the labor market is a lagging indicator of the econmy. [image] The chart shows the rate of initial jobless claims. Jobless claims are when a person first files for unemployment insurance from a state. As you can see, it is a very low number right now. This indicates that people are getting jobs rather than applying for unemployment. This is an indicator of a tight labor market. This, and the high numbers of jobs created and the low unemployment rate, are keeping the Fed tightening. They look at those numbers and see a very tight labor market and conclude that the economy is tight. But labor indicators are lagging indicators of the economy! Not leading. Leading indictors are saying we are in a recession and going to continue in a recession for some time. That means that the labor market will likely start to weaken early next year. But, by then, the housing market will be flat on it's back. The auto industry will be laying off people. The economy will be in a deep recession. At the same time, inflation will be about where it is today. Volatile factors will be declining but sticky factors will still be rising. The real question is what will the Fed do then? Ease to help the labor market or keep tightening to crush inflation. I suspect they will ease and trigger another bout of higher inflation. But, as always, how do we make money from this. I am still short the stock market and junk bonds. Certain sectors are going to get hit hard. I like the long side of the dollar and the short side of gold. Want to see my trades? [Sign up for my weekly video newsletter, Wall Street Winners by clicking wsw2021.com now.](=) Extreme Profits For Stock Trading! This new course is the first time that Courtney has taught the Extreme Profits techniques in the stock market. You will learn how to actually use the Kelly Formula in stock trading. This is the only course in the world on this subject. You get it free when you join the WealthbuilderInsider membership program. Click here to learn more about the WealthbuilderInsider.com Where to get more Courtney! New blog!: [Click here to join for free!]() Youtube: [Freebee Wall Street Winners]( Podcast: [The Courtney Smith Show]() Substack: [courtneysmith.substack.com](=) Medium: [Courtney Smith – Medium]() [Profile Image] COURTNEY SMITH WealthBuilder LLC Work (702) 761-6837 | Text Message (702) 718-8588 Support@WealthBuilderLLC.com CourtneySmith.com Share The Love If you like Trade Secrets, then please pass it on to your nearest and dearest so they can [sign up]( too. If you believe in the power of good journalism, make it something you subscribe to. Sharing is caring. [image] 1. Get your Option Strategy Guide and 7 Option Top Trading Tactics.[Click here]( 2. Health is very important at this time. Ian Cooper has a new report and LIVE trade sheet to learn which are the BEST Health care, Pharma, Biotech, Insurance Companies.[Click here](=) [image]() [Unsubscribe]( Wealthbuilder LLC 6671 Las Vegas Blvd South 210 Las Vegas, Nevada 89119 United States (702) 722-4584