저자: PeterSchiff · 외국인
요약 보기
워시 연준의장의 매파 발언은 실질 정책 변화 없는 쇼이며, 시장이 이를 과잉 반영해 금·은이 급락하고 달러가 강세를 보임. M2는 연 6% 수준으로 계속 팽창해 인플레이션을 오히려 키우고 있음. 재정적자와 4조달러 국가부채, 재무부의 바이백(오퍼레이션 트위스트) 확대가 장기채 만기를 짧게 만들어 정부를 더 취약하게 함. 연준은 정치적 동기로 움직이므로 데이터보다 정치를 봐야 한다는 주장.
다듬은 글
in my Puerto Rico studio. I want to start off today's podcast by focusing on the speech that was delivered today by Fed Chairman Kevin Warsh. And the speech, of course, was highly anticipated. I don't know why anybody cares what this guy says because it's obvious what he's going to say, and it's also obvious that despite what he says, he's not going to do what he says.
So, what he says is meaningless. What he does is what counts, and he doesn't do anything related to what he's talking about. And of course, he talks tough about inflation. He's serious. He's really going to bring the inflation rate down to 2%, and that is exactly how the speech today was perceived. Everybody was saying it was very hawkish.
Well, duh. I mean, what do you expect? He's not going to not talk hawkish. That That's his whole script. That's what he does. That's part of the Kevin Warsh show. You know, also, Trump does not criticize Warsh when he is hawkish the way he did of Powell. Again, that's all part of the show. It's to try to make everybody believe that the Fed is somehow independent, and that the Fed might actually start hiking rates and shrink its balance sheet and fight inflation.
But, they're trying to create a situation where when he doesn't do that, it looks as if he's not politically motivated, that it's actually economically justified. So, it doesn't really matter what he says. But, the markets, in particular, precious metals, gold and silver, really got hit hard today, and the dollar rallied based on the idea that, "Oh my god, he's going to get serious this time.
He's really going to start fighting inflation." In fact, the odds of a September rate hike, which stood at about 37% before he talked, rose to like 57% when he was done talking, even though nothing he said changed anything because Warsh has been talking tough about fighting inflation since before he was nominated and certainly even during the confirmation hearings.
It was all how tough he's going to be on inflation. So, what did he say today that was any different than what he's been saying? But the fact of the matter is despite all this tough talk, he's had multiple opportunities to hike rates and he did not do it. The balance sheet continues to expand, M2 continues to expand.
It's expanding at about a 6% annualized rate since he got the job. He is creating inflation despite the fact that he's talking about putting out the fire, he continues to pour gasoline on the fire. So, again, doesn't matter what the guy says. Look at what he's doing and what he's doing is creating more inflation.
He is making the same choice that his predecessors made. But I think even more important than what Warsh said today, and I'm going to get into that, is what he did not say because that speaks louder to me than what he chose to say. One thing he did not mention at all was the $40 trillion national debt.
How do you not talk about that in the context of fighting inflation? That is what's helping to create the inflation. Nor did he mention what is currently happening with the US Treasury and its operation twist, which by the way was expanded as I predicted it would already this week. Not only did they already double the buybacks from 2 billion to 4 billion, but earlier this week the Secretary of the Treasury said that the US government would use the general accounting fund to cover the cost of of the buybacks.
And there's something like a trillion that the government could in theory now tap into to buy long-term treasuries. Now, this is not free money. I mean, this is money they were going to spend anyway. And so, if they spend this money buying back their debt, they're just going to have to issue new debt to fund the spending that they're not going to cut.
Right? The government's not going to cut any spending. They're not saying, "Hey, we're going to use this money to buy back debt instead of spending it for other purposes." No, they're they're going to keep on spending. So, they're going to use this money twice, which means they've got to borrow. But, it means that you're going to have an even bigger twist where the average maturity of the national debt is going to shorten by an even greater amount, meaning that the US government will be in an even more vulnerable position if the Fed actually delivered on the rate hikes that the markets are now assigning a higher probability of actually taking place.
And again, I think that's part of the show here to get the markets to think that the Fed might hike rates to try to get the benefit of tighter money without actually having tight money. In fact, while having loose money, you get the markets to think that you're on the verge of tight money. And that's what caused gold and silver prices to fall, the dollar to rise.
I'll get into the market reaction a little bit later in the podcast. Right now, I want to stay focused on on what was said. So, I already mentioned what wasn't said, nothing about the reckless fiscal policy of the US government, the runaway debt. And because Warsh is not addressing the elephant in the room, you know, I know he's not going to do anything about inflation because you can't do anything about it unless you acknowledge what's really going on.
In fact, while Warsh did accept responsibility for inflation, he mentioned in his talk that for the last 65 months, inflation has been way above their 2% target. And he accepted responsibility on behalf of the Fed. Now, of course, he hasn't been at the Fed for most of those 65 months, but he accepted responsibility on behalf of everybody else at the institution.
But he said it was solely the Fed's fault. He said it was just the Fed. Basically, we own it. It's our fault, and we've got to do something about it. But that's not true. It takes two to tango when it comes to doing the inflation dance. And the Fed's dance partner is the US government. It's Congress, and it's the president.
Because it's the Congress that is authorizing and spending the money that it does not have that is leading to the inflationary policy that the Fed is pursuing to make that spending possible, to avert a financial crisis or bond crisis, which would happen if the Fed did not accommodate these deficits.
So, when you let your partner in crime off the hook, and then you claim that you're not going to commit the crime anymore, it's going to happen. Because it's impossible for the Fed to really fight inflation given what the the government is now doing. So, one of the first things, though, that Warsh said when he started his talk was he talked about forward guidance, and how it's outlived its purpose.
And I don't think it ever really had a legitimate purpose. But he said that it was created in the aftermath of the 2008 financial crisis. And that it's kind of overstayed its welcome, and that we don't need it anymore. But what happened was interest rates were at zero, and they were like, "Well, how do we ease policy?
We got rates at zero. We're already doing QE. How can we cut? We're we're already on the floor? And the way they did that was through this forward guidance. And the forward guidance was, "Hey, we're at zero and we're going to stay there for a long time. And we're going to keep on pretty muddy." Right?
Cuz they couldn't actually do much once they were at the zero bound. So, they wanted to keep talking about how long they were going to stay there to try to get, you know, to ease policy when they really They didn't want to go negative, right? Like some of the central banks went to negative actual nominal rates.
The Fed didn't go there. Although, I think at one point Donald Trump was agitating for that. He was jealous. He was saying, "Hey, other countries have negative rates. Why can't we?" Right? He he thought that was a a good idea that the Fed should have tried that. But, you know, Warsh is saying, "Look, we don't need forward guidance anymore." And he said the markets should not look to the Fed.
Investors should not make their next trade based on what they think the Fed is going to do. They should look at the data objectively, look at the economy, and then make their investments based on that, not based on what they think the Fed is going to do. But, that that's not going to happen because what the Fed does is very important.
Because if you just made your decisions based on the actual economy, you would think, "Okay, well, rates are going to go way up because we're going to have inflation based on the actual numbers." But, what markets are doing is they're trying to figure out, "Well, the Fed's not going to do the right thing." See, if I knew the Fed was going to do the right thing based on the data, well, then you could follow the data.
But, if you believe the Fed is going to do the wrong thing, then what difference does the data make? If you know the Fed is going to be political, that the Fed is just going to try to keep air from coming out of a bubble, to artificially sustain a fake economy, to try to help politicians avoid having to face difficult decisions, how can you ignore what you think the Fed is going to do?
Because the Fed is going to act based on political motivation, not just based on the data. In fact, the data may be irrelevant to the Fed. As much as they like to say they're data dependent, the data they may depend on are political polls or the popularity of the current administration. So, I think it's wrong for Warsh to even think that anybody
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