The Fed’s Nightmare Scenario

Monday, July 24, 2017
By Paul Martin

SilverDoctors.com
July 24, 2017

Is all of the condensed energy dammed up by the QE programs and the Fed asset purchases about to explode all at once?

Submitted by Streetwise:

Lior Gantz, founder of Wealth Research Group, analyzes how inflation will likely take off in the U.S., and why all of the condensed energy dammed up by the QE programs and the Fed asset purchases will explode all at once.

Wealth Research Group published an important update on the precious metals sector, which is trading in an unusual pattern, and how the bottom for junior mining shares is likely to play itself out in six to eight months.

For over nine years, central banks have been the front and center of the financial universe.

I can still recall the thrill of reading how Warren Buffett drove on a Saturday morning to the closed offices of GEICO, an insurance company, and the janitor told him that only the CEO is around, but he doesn’t believe he’ll accept him.

Young Buffett charmed his way into hours and hours of financial discussion with that CEO, which Buffett credits with opening his eyes to the magic of owning insurance companies. Wealth Research Group will soon be releasing another new Wealth Stock, and it will be a long-term insurance holding.

I read this story at 14 and bought my first stock at 16—of course, it was an insurance company and I’ve recently sold my position after 16 years—It was a big winner, rising close to 20-fold since my tiny $500 in babysitting earnings were invested in it.

When I bought it, I mimicked Buffett’s method of choosing an insurance company and didn’t think for one minute about what the Federal Reserve will do next. But today, it is essential to understand what the Fed does next—we’re in a whole different world.

The Fed, the European Central Bank, the Bank of Japan and the Bank of Canada, along with the central bank of China, have not, through a decade-long stimulus period, managed to usher in what they refer to as “healthy inflation.” The uncertainty gave birth to cryptocurrencies, about which we published an exclusive report as well as emphasized the importance of Safe Havens.

You and I both know what happened. The “easy credit” (the cheap money) reached the financial elite and they put it to work in the stock markets and real estate markets of their choosing.

It did not reach Main Street, and that’s the problem, but it is now reaching the public through the back door, and it’s the Fed’s worst fear.

That’s why you’ve seen bankers raising rates and persisting on continuing to shrink their balance sheets even though they haven’t met their targets.

Here’s what’s breathing down their necks: they’re afraid of a repeat of the 1965–1980 era.

The Rest…HERE

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