Dear Reader,
Florida Governor Ron DeSantis is now taking aim at the Federal Reserve. Somebody's got to. Desantis is calling attention to the ongoing failures of Chairman Jerome Powell to tackle inflation, job stability, and other mandates. He has also criticized the Fed's efforts to develop a central bank digital currency (CBDC) - something I fully believe the United States should not pursue.
CBDCs would be a disaster for financial privacy and monetary policy, opening a Pandora's box of political retribution.
This can't even be debated. And I can't imagine 90% of Americans want the government monitoring their spending and digging further into their accounts.
Bad as it is, the prospect of a CBDC is down there on our list of worries when it comes to the Fed.
Look, the Fed needs taking on; they're terrible. Monetary policy is boring, which is what makes it dangerous for a disengaged public. By keeping the terrible policy decisions coming, they're deepening our economic troubles and ramping up the odds of economic disaster.
Albert Einstein once said the definition of insanity is doing the same thing over and over again and expecting a different result. That's what's going on here: insanity. Poor, rich, middle class - the Fed's dangerous for just about everyone, fueling bubbles and popping them, eating into savings, sleeping on inflation.
Not even oil companies are immune for crying out loud - dozens of smaller players in the Permian are set to throw in the towel in the face of inflation and crazy policy; the majors are waiting in the wings. (This is actually one of the rare opportunities the Fed is handing us - one I think could be worth $50 billion to start. I'm hosting a special presentation on it Wednesday night at 8 PM - click here to RSVP.)
The debt ceiling crisis is about to explode, so as Americans, we have to engage and take a hard look at what the Fed's doing - we can't leave it to politicians like DeSantis.
Let's take a look...
Americans Don't Know Much About Nothing
No offense, but our countrymen are very uninformed. Most people can't name the three branches of government (just 47% of Americans can, according to the Annenberg Public Policy Center. A 2022 survey showed that 26% of Americans couldn't name any First Amendment freedoms. About 25% couldn't name a single branch of government.
So it's safe to assume they know even less about the (unelected) institution in Washington with far more power than any over their financial freedom: The Federal Reserve.
Information awareness is infinitely worse when it comes to the central bank. For instance, about 16% of Americans think the Fed is in charge of consumer credit scores.
It sure isn't.
About half didn't know the Fed raised interest rates back in 2017 - and during a survey at the time - few had any idea that Janet Yellen was the Fed Chair (she's now Secretary of the Treasury).
Last year, the numbers were even more alarming. About 20% of people didn't know anything about what the central bank actually did.
Just 7% of Americans believe they know a lot about the Fed's policies. Around 8% said they knew the Fed focuses on employment maximization. And about a third knew the Fed focuses on price stability through interest rate management.
These are seriously horrible numbers. Dismal.
Because it shows that very few of us realize the Fed's policies are what is carving this economy up. And in a media environment of extremes, it allows uninformed sycophants to deflect blame from bad fiscal and monetary policy to other political leaders.
There's an old adage that if you're explaining, you're losing.
And a war with the central bank is largely a losing proposition. It got Ron Paul nowhere.
The mainstream press dismissed Paul as an out-of-touch crank - even though he was correct about the Fed's policies. It seems very difficult to spend the next 18 months engaging in a widespread educational campaign around monetary policy from a disengaged national audience. And that's incredibly frustrating to me.
But as I said - I don't have any control over it. All I can do is continue to educate who I can about the Fed, its policies, and how it impacts your money. I hope the Fed becomes a major political debate topic in 2024 and beyond...
That said, I'm not holding my breath. Monetary policy is boring...
And that's what makes it so dangerous.
Today's Momentum Reading
WORLD'S BIGGEST INDICATORS
Broad Market: Red
S&P 500: Red
Recap: The World's Biggest Indicator (Momentum) is Red...
The pattern of lower highs and lower lows continues across the markets. I'm very bearish on banks right now, especially in the regional side. The combination of profit declines and deposit flight is a real problem. However, there are names that continue to intrigue me for the long term.
This Could Be the Hottest Flashpoint of the Year
The Permian basin is about to become a hotbed of mergers and acquisitions (M&A), in my view. After conversations with experts in deal-making in New York City two weeks ago, it is clear that a land rush in the oil patch is very probable in the coming months.
So, we're taking aim at the properties in this space that will be the most likely acquisition targets.
There's a lot to look forward to; when word got out that Exxon was thinking about acquiring Pioneer Energy's Permian operations, investors snagged monster profits... on top of an $8 billion dividend payout.
So go here to RSVP and get ready - I'll see you there on Wednesday at 8 PM.
Stay Liquid,
Garrett
The post Why Everyone (Not Just Ron DeSantis) Needs to Worry About the Fed appeared first on Midday Momentum.
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.