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“The Fed’s “Fatal policy error” – and clarification of my Donald Trump thesis.”

by Andy Hoffman, Miles Franklin:

This is crazy; as the last time I awoke at 1:00 AM to write, was the night of the BrExit – after having been awoken by a phone call, by someone seeking to buy gold.  Subsequently, I couldn’t sleep – not to mention, as I wanted to get my post-BrExit article out before my early morning flight to Chicago, for the Q&A session Andy Schectman and I held the following evening.  Which, I might add, Andy and I promise to re-start later this year, in a city near you!

This time around, the circumstances weren’t so dire.  However, given yesterday’s, in my view, massively dovish Fed about face – as I suggested was eminently possible in yesterday’s “all out trade and currency wars, and a shocking new world order” Audioblog – I again had trouble sleeping.

This, and a desire to clarify my “Donald Trump thesis,” which I believe many have been misunderstood.

I’ll get to that shortly, but first let’s start with the Fed – which went into yesterday’s first post-Trump meeting with a headwind of dramatically weaker “hard” economic data like plunging retail and new home sales, durable goods orders, GDP, and mortgage and refinance applications; and even a shockingly weak Chicago PMI “soft” data report, which plunged from 54.6 in December, to a near-recessionary 50.3 in January.  Conversely, the majority of other soft data indices had risen sharply, led by the same meaningless “expectations” that generated false hope when Obama was inaugurated in 2009.  After which, I might add, the failure of a stimulus package known as the “American Recovery and Reinvestment Act” was passed just three weeks later.

Yesterday morning, mere hours before the Fed’s rate decision- which was widely expected to be unchanged, with a touch of incremental hawkishness – this disastrous data was supplemented by yet another “unexpected” plunge in hard data like mortgage applications – which fell 6% from a week ago; and December construction spending, which declined 0.2%; whilst U.S. gasoline inventories exploded to their highest-ever level.  Conversely, the increasingly meaningless ISM and PMI manufacturing indices rose, whilst the chronically inaccurate ADP reported yet another whopper of a bogus January jobs report – suggesting “jobs” grew strongly, despite collapsing real economic activity, and the worst holiday spending season since the 2009 crisis.  Heck, the Baltic Dry Index plunged by 17% in January alone!  In the reports’ wake, the benchmark 10-year Treasury yield againattempted to rise above the 2.5% “economic line in the sand” I wrote of three weeks ago – above which, the economy completely collapses; and yet again, decidedly failed to hold that critical level.

And the craziest part of all, is that by far, the largest component of the rise in said “diffusion indices” has not been production, new orders, or employment; but instead…drum roll please…prices paid; i.e., the surging inflation that is decidedly NOT bullish for business – as evidenced by the fact that corporate earnings have declined for six straight quarters.  In other words, if the Fed truly means to stand by its stated objective of raising rates when inflation rises above 2% – which the “core CPI” has been above for more than a year now, I might add – what could possibly be the hold up?  Apparently, “stagflation” is not nearly as “hawkish” as we thought, huh?

This, despite the dollar having been so “strong,” Donald Trump was forced to launch a “thermonuclear currency war” salvo last week – in not only saying the dollar was too strong, but accusing China, Japan, and Germany of being serial currency devaluers.  Which, in one of the great historical examples of chutzpah, Japanese officials had the gall to deny – stating, I kid you not, that Japan’s monetary policy is for the domestic purpose of beating deflation, and isn’t done with Foreign Exchange rates in mind.”  

FYI, the result of Trump’s “salvo” – aside from “putting the gold Cartel on notice” – was the dollar index’s biggest January decline ever.  This, as Europe is literally being torn apart at the seems – having itself, in the wake of exploding anti-EU sentiment in France, Holland, and Italy, experienced not only its biggest inflation surge since 2011, but the worst January for European sovereign bond markets ever.  To that end, the UK House of Commons nearlyunanimously ratified the people’s BrExit vote yesterday, leaving only the House of Lords to do so in the very near future.

Thus, it surprised many people – but not me, who predicted incremental dovishness in yesterday’s Audioblog – when just as it did a year ago, the Fed did an “about face” on its “three rate hikes in 2017” forecast; by LOL, not only making ZERO intimations of an impending rate hike; or double LOL, a reduction of its gargantuan $4.5 trillion balance sheet; but altering the text of its policy statement from December’s “market-based measures of inflation have moved up considerably” to “market-based measures of inflation remain low.”  Which by the way, doesn’t even logically make sense, as if they were deemed to have “moved up considerably” in December, how can they have remained low in January?  Yes, my friends, this is the intelligence level of Janet Yellen, the FOMC, and the 100-plus taxpayer funded lackeys sitting in on such meetings.

In the statement’s wake, the Cartel of course tried to slam Precious Metals – as they doevery time the Fed speaks.  However, when the dollar index’s subsequent rise was stopped cold at the key round number of 100 – which just happens to represent the post-election breakout point – PM’s turned around to end the day unchanged.  And as I edit at 3:20 AM MST, both metals have surged to new post-election highs, whilst the dollar has plunged to a post-election low of 99.25.  And oh yeah, Bitcoin is on the verge of again taking out $1,000.  So let’s just see what happens as the second month of a year I expect to be defined by money printing, draconian government actions, and monetary revolution.

As for Trump, the reason for my “clarification” is that several readers have expressed the view that I have switched from a vehemently “pro-Trump” stance before the election, to an “anti-Trump” stance thereafter.  Which couldn’t be further from the truth, on both fronts.

I have been as close to what Gerald Celente deems a “political atheist” for my entire voting career.  I care not about political affiliations – and in fact, I am a registered Independent.  In fact, I voted for Ross Perot in 1992 and Gary Johnson in 2012; whilst in 2000, 2004, 2008, and particularly 2016, voted principally for the “lesser of two evils.”  And while I didn’t have a strong opinion about Donald Trump either way, I believe Hillary Clinton to be one of the most evil people America has ever produced.  Not to mention, the man who would have accompanied her as America’s “first husband.”  To that end, I campaigned, through this blog, more vehemently for a Trump victory than any candidate in my lifetime; to the point that I actually coined the term “BrExit times ten,” which Trump subsequently used in several pre-election speeches!

In the wake of the “shocking” election victory I vehemently predicted, my initial relief – for the fate of America; and excitement – for the post-election Precious Meal rally that so rightfully should have occurred; was quickly turned to the same wrath, frustration, and disappointment that many of you, too, felt – in not only watching the Cartel smash paperprices viciously (to the point that Eastern physical premiums exploded to multi-year highs); but engineer an explosive stock rally, under the ad hoc “Trump-flation” meme fabricated by Wall Street to explain why a year’s worth of financial market fears of a Trump victory, had suddenly turned to wild, dot-com like elation.

Again, it was not Trump the man I was so enamored with; nor, for that matter, the campaign rhetoric – like any other aspiring politician – of policy change I knew to be either impossible, or politically unviable.  To the contrary, I was excited by 1) the fact that Hillary Clinton was deprived of a chance to destroy America; 2) that Trump’s violently anti-establishment victory might inspire the change required to once and for all destroy the hideous, 99%-destroying status quo; and 3) last but decidedly not least, blow a major hole in the gold Cartel’s armor.  Thus, any perceived “anti-Trump” sentiment from my subsequent writings has little or nothing to do with my view of his intentions – which generally speaking, I believe to be positive; but instead, my rage against the aforementioned, Wall Street fabricated “Trump-flation” meme.  Which, what a shock, suggests, just as the parallel “Clinton-flation” meme before it, that stocks should rise, whilst Precious Metals are slammed.

Look, it’s not new news that I believe the U.S. dollar Ponzi scheme is in its final, irreversible death throes.  And thus, that NOTHING can stop America’s economy, financial markets, and hegemony from plunging, if not collapsing, in the coming months and years.  To that end, I do not believe any person can alter this destiny – no matter what they attempt.  Let alone, someone who is so violently anti-establishment, he will be forced to fight an essentially unwinnable war, against viciously violent opposition.  Which, as we sawimmediately when he won; and even more so following the inauguration; will only grow more venomous – to the point that, per what I stated in yesterday’s Audioblog, it could literally tear America apart.

(Trump is) making enemies at a breakneck pace, whilst accumulating equally fervent supporters – in what shapes up to be a political and social polarization so violent, it may destroy the United States as we know it.”

Having lived in America my entire life – and now, raising a five-year old child in it – I take no pleasure in saying such things.  However, the reason for my rapidly rising popularity is that I tell the TRUTH as I see it.  And as I see it, Trump is up against insurmountable odds; as while it makes for good campaign rhetoric, there is simply no way America can ever beeconomically great again.  At least, not until the Ponzi scheme forged by the Fed a century ago; and supplemented by Richard Nixon 45 years ago, violently collapses first.  To that end, I can only hope Donald Trump proves to be a better leader during this inevitable cataclysm, than the pathetically weak Presidents that have resided over the economy since said Ponzi scheme peaked with the Dotcom bubble in 2000, and broke in 2008.

No, I am decidedly not “anti-Trump” – particularly as he hasn’t done anything yet.  And based on a very successful business career – flaws and mistakes notwithstanding – he unquestionably has a better chance to succeed where the political hacks Clinton, Bush, and Obama miserably failed.  However, at this late point in America’s “doomsday clock” economic and monetary cycle, I define “success” not so much in economic terms, but diplomatically.  As frankly, if he can “succeed” in creating a healthy environment for America to take the medicine that has been inevitably – and perhaps imminently – prescribed, he will be remembered as one of the nation’s greatest leaders.

To the contrary, I am “anti” anything that aims to prolong the hideous, nation-destroying status quo – like the fraudulent “Trump-flation” meme he had no part in fabricating; or the simultaneous, hideously blatant manipulation of financial markets that accompanied this last gasp attempt to kick the can by the “evil Troika” of Washington, Wall Street, and the “fake news” Mainstream Media.  Particularly, anything that prolongs the gold Cartel’s reign of monetary terror – which not only affects me on a highly personal basis, but has been the cornerstone of Central bank’ destruction of the global economy for decades – for you, me, and generations to come.

I truly believe Trump is an American hero – in standing up to an extremely powerful, andevil, establishment; and absorbing an untold amount of abuse, lies, and defamation, in the name of what I believe to be a genuine goal if “saving” the nation, and actually making it great again.  Unfortunately, for the mathematical reasons cited above, I strongly fear he will be a “classic tragic” hero; as his opposition is bolstered by violently anti-capitalist forces, supported by inexorably deleterious demographic trends that will only grow stronger with each passing day.  I truly hope (and pray) I’m wrong – but at this point, it looks to me like a case of Fukushima versus the Tsunami.

To conclude, I believe Donald Trump needed to win this election, as a first step towards America’s cleansing; rebirth; and hopefully, one day in the very far future, absolution for the sins of greed, imperialism, arrogance, debt accumulation, and inflation exportation it engaged in for decades; particularly, since the gold standard was abandoned in 1971 – and the Glass-Steagall Act in 1999, enabling Wall Street and the Federal Reserve it controls to destroy the nation, and the world at large.  I truly hope he is up to the gargantuan, in many aspects unwinnable task of being America’s first diplomatic steward of the post-dollar era, in which “success” will not be defined by an ability to kick the can a few inches further, but set the stage for America, in the aftermath of the economic hell it created for itself, to one day, après le deluge, be “great again.”

Remember, I am decidedly not a political commentator; but instead, an economic one, with an expertise in monetary issues; who just happens to be heavily invested in Precious Metals; writing a FREE blog, in the capacity of Marketing Director of one of America’s oldest, most trusted bullion dealers.  Thus, I am decidedly NOT trying to make a “political statement”; but instead, simply trying to financially PROTECT you from what is inevitably coming, due to forces put in place long before Trump emerged on the political scene.  Which, in my very strong view, can be accomplished through the ownership of the onlyassets to have maintained – and in most cases, significantly increased – wealth through times of political, economic, and monetary crisis throughout history; i.e., physical gold and silver.

Read More @ MilesFranklin.com

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1 comment to “The Fed’s “Fatal policy error” – and clarification of my Donald Trump thesis.”

  • Ed_B

    America will only ever be great again if government is slashed to a fraction of what it is today. We do not need trimming here or small reductions there. We need to reduce the size, scale, and scope of this economy-consuming monster called government. Further, we need to reduce it substantially and SOON. If not, then it will not even be saved, let alone great.

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