No One’s Going to Save Us from What Comes Next
Aside from being the “tax no one voted for and everyone pays,” historic inflation accelerating to levels not seen in over four decadeshas serious consequences. One of those consequences is the near-certain probability of a major recession, resulting from attempts to “cool off” inflation.
A recession is the next logical conclusion, after all. It has historic precedent stemming from the 1980s, when former Fed Chairman Volcker made history by raising rates through the roof (ending at over 20%).
The resulting “Volcker Rule” is reminiscent of the strategy Powell is applying now. One Barron’s op-ed called it an “impossible job” and described the before the Fed:
Sounds to me like Powell might be shifting blame away from Fed’s failure to manage inflation! In addition, this comment does raise three important questions:
The answers to these questions aren’t as important as the reality they reflect. Let’s take a quick look at that for a moment…
Economic impacts that are hard to overlook
The average American doesn’t have to look too hard to discover the scope of the economic despair on the way.
For example, Jordan Weissman’s recent article summed up the situation nicely:
Yes, it looks bad. Yes, it’s likely to get worse before it gets better. What’s more important is the now-apparent lack of meaningful solutions if Powell’s rate hikes fall flat.
Another snippet from Weissman’s reporting that’s probably correct: “The Fed isn’t aiming to create a recession, but it will probably tolerate one if that’s what it takes to get inflation in check.”
In other words…
At times like these, it’s worth remembering the Federal Reserve is not looking out for your wellbeing. If I’m feeling generous, I’ll grant they’re trying their best to keep the entire economy healthy.
They’re looking at statistics, not individuals. They see surges in food and energy prices as “normal volatility.” Chairman Powell doesn’t care it cost you nearly $100 to fill your gas tank.
And if a recession’s what it takes to make the economy healthy again, the Fed will let it happen, regardless of the consequences for normal folks like you and me.
Seems like we’re on our own
One final quote from Weissman’s article:
If you were hoping for the White House, or Congress or Powell’s Fed to ride to the rescue, you’re out of luck.
That means it’s high time to take your financial security into your own hands. And unlike the Federal Reserve you’re not out of options.
It’s time to buckle down and do some serious financial planning, including looking forward into the next decade. Now is the time to shore up your savings, possibly with inflation-resistant investments to ensure you’ll be able to count on today’s money tomorrow. Now is a great time to learn how to diversify your savings with physical gold and silver to help you through rough times ahead.
As former Federal Reserve Chairman Ben Bernanke said,
Don’t wait, because (like car insurance), after the wreck, costs go up – and it will be much more difficult to recover financially.
Prudent folks know they need their protection, their insurance, all settled before they need it.
Now is the time. No one but you is responsible for your own, and your family’s, financial wellbeing.
Peter Reagan is a financial market strategist at Birch Gold Group. As the Precious Metal IRA Specialists, Birch Gold helps Americans protect their retirement savings with physical gold and silver.
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