Is The Stock Market Up? Is The Market Predicting Consumer Price Inflation Based on U.S Regulatory and Fiscal policy? – January 12, 2022
Please don’t take what the writer is writing in this post as investment advice, what you’re reading on this post is pure speculation and opinion. Based on the data provided to me it appears that the U.S dollar is being debased and the market isn’t rallying. Now, to frame this in what I think is easier to understand, because of the U.S regulatory policy on the economy, there is little wiggle room for the producers to lower prices.
With that said, this doesn’t;t necessarily equate to the U.S dollar losing its value worldwide, it just means that domestically in the U.S market, it appears that the U.S consumers are going to have to get used to rising prices until a FEDERAL politician is willing to cut the regulatory environment. Why this could equate to a bull stock market rally, is that for the foreseeable future it’s the U.S government has backed itself into a corner in which during an election year, the government will provide some sort of support/welfare for the economy.
With that said a Stock market rally shouldn’t be confused with consumer price DEFLATION, the stock market very well might rise while the Mainstreet economy struggles. It also wouldn’t surprise me to see the prices of Gold and Silver retreat because both consumer price inflation as well as a controlled interest rate environment in an economy void any appetite for austerity measures, equates to a confident U.S dollar.
Does, this make any sense? Of course, it doesn’t, but leading up towards any market collapse, the only thing that makes sense are people drying to milk this market dry for everything it’s worth. As I’ve been writing for some time now, we might be heading for a Gold and Silver buying opportunity of a lifetime, do not be surprised if Gold and Silver get sold out when prices drop to historic lows.
You may even want to consider purchasing your Gold and Silver not at rock bottom prices but at the prices most comfortable to you. Because there will be Gold and Silver shortages.
Now, I will warn the reader that if what I think will happen does happen, after interest rates rise a bit, they’re going to come crashing down again and it’s at this point in which I personally believe a new round of inflation is going to run rampant. So to confirm your speculation, yes, I don’t think the inflation we’re seeing now is dollar debasement, I personally think once interest rates are forced down again, that’s when the reality of dollar debasement is going to grip the economy.
There’s still a belief that interest rates can be normalized, which is fine, the problem the follows is that as I like to point out, the appetite for austerity measures hasn’t arrived yet, and I have to remind the reader, that most politicians HATE austerity measures, because it equates to no more free promises to voters. Why will austerity measures be forced? labor force participation.
Inflation is occurring because there are shortages, but the market imagines that these shortage problems are TRANSITORY, if you listen to Jerome Powell, it’s almost like he’s saying he didn’t know Joe Biden would be this stupid. Jerome Powell assumed based on Biden’s experience and rhetoric that he would have turned the economy around by now, well, as we all know, Biden doesn’t appear to know what he’s doing.
Now, from a Federal Reserve policy standpoint, they have to pretend that they don’t understand the correlation between regulatory policy, and the Federal Reserve, after all the Federal Reserve is NOT supposed to get involved in politics. Jerome Powell has to wait for Biden to respond to him, not the other way around. If people remember, Jerome Powell was raising rates, until Donald Trump began bashing him publically.
If Powell began bashing Trumps’ policies, it would appear like Jerome Powell was in charge of the country. If you follow me here, it will be easier for you to see why I come to my conclusion. Sure I may have taken you down a road, that simplifies my argument, but you get the point here, let the politicians dig their own grave, I’m only the central banker!
So is the Stock market up? Yes, but I’d argue it’s only up because of the current regulations on the economy and the reality that the Biden administration is going to be forced to give out free welfare. or feel the wrath of the markets.
Interesting times ahead!
