Modern Monetary Insanity And The Three Stooges

Modern Monetary Insanity And The Three Stooges from Investment Research Dynamics

James Kunstler summarized it perfectly. So rather than reinventing the wheel, here’s anexcerpt from his Monday commentary:

Jerome Powell [was] wheeled out on CBS’s 60 Minutes Sunday night, like a cigar store Indian at an antique fair, so vividly sculpted and colorfully adorned you could almost imagine him saying something. Maybe it was an hallucination, but I heard him say that “the economy is in a good place,” and that “the outlook is a favorable one.” Point taken. Pull the truck up to the loading dock and fill it with Tesla shares! I also thought I heard “Inflation is muted.” That must have been the laugh line, since there is almost no single item in the supermarket that goes for under five bucks these days. But really, when was the last time you saw a cigar store Indian at Trader Joes? It took seventeen Federal Reserve math PhD’s to come up with that line, inflation is muted.

What you really had to love was Mr. Powell’s explanation for the record number of car owners in default on their monthly payments: “…not everybody is sharing in this widespread prosperity we have.”

And so it went on 60 Minutes on Sunday evening. I strongly recommend reading Kunstler’s entire essay:  Ides and Tides…The Fed and the FOMC are not mandated to set monetary policy to stabilize employment and inflation. The Fed’s role is to help the banks maximize profits. That’s it in a nutshell.

The best way to fight and protect yourself from the Fed’s mandate is to own physical gold. Phil Kennedy of Kennedy Financial invited Bill “Midas” Murphy and I to discuss the gold market and where it’s going from here:

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Dave Kranzler

I spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, I traded junk bonds for Bankers Trust. I have an MBA from the University of Chicago, with a concentration in accounting and finance. My goal is to help people understand and analyze what is really going on in our financial system and economy. You can follow my work and contact me via my website Investment Research Dynamics. Occasionally, I publish on Seeking Alpha too. As a co-founder and principal of Golden Returns Capital, LLC Mr. Kranzler co-manages the Precious Metals Opportunity Fund, a metals and mining stock investment fund.