Inflation is a regressive tax. The hardest hit are wage earners, savers, and pensioners on fixed incomes – as well as those who own few or no tangible assets.
The probability of a recession is starkly high based on the extreme period in which the yield curve—which the Fed says is its best recession predictor—has remained inverted.
Hoye predicts a severe recession linked to yield curve inversion dynamics. He says the US dollar will remain chronically firm, and this will drive central bankers crazy.
Middle- and working-class Americans suffer the brunt of inflation, which is properly defined as the central bank pumping money into the economy thus reducing the dollar’s purchasing power.
The Fed has been consistently telling everyone what it will do, and with inflation creeping back up and the jobs metric that the Fed is watching holding strong, there is no leeway for the Fed to pivot.
Bullion investors are naturally concerned about unsound monetary and fiscal policy. Many of them buy precious metals, in part, because they recognize the federal government is out of control when it comes to borrowing and spending.
The Biden Treasury Department along with the Federal Reserve have been actively exploring the possibility of issuing a digital dollar. Trump vowed to stop it from moving forward if elected President.
Inflation is already nudging upward, forcing the Fed to stay at the fight longer, and markets that have bet themselves up on pivot hopes are going to be disappointed.
