Money Printer Go Brrrr! – FRONTIER METALS

The mainstream financial media buried the lede in its reporting on last week’s Fed meeting.

They reported on the rate cut. They sliced and diced the dot plots. They analyzed every syllable coming out of Jerome Powell’s mouth. However, they barely mentioned the biggest story — the Fed just restarted quantitative easing (QE).

In this week’s Midweek Memo podcast, host Mike Maharrey covers the stuff the mainstream reporters left out. He explains what the Fed plans to do, why it is QE no matter what they call it, and how it will impact normal people.

Hint: it means more inflation.

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Mike opens the show explaining a phenomenon in journalism known as “burying the lede.”

“This happens when a reporter doesn’t mention the most important part of the story until several paragraphs in. So, let’s say a city council had a meeting. The reporter starts off by telling you that the city approved funding for next year’s Fourth of July fireworks, and then five paragraphs in reports that the council voted to remove the mayor from office. Yeah. That’s a tad more important than the fireworks thing!”

Sometimes, reporters bury the lede because they aren’t very good reporters. And sometimes they bury the lede because they don’t want you to notice an important part of the story.

We can debate why they did it, but the mainstream financial media definitely buried the lede in their reporting of the December Federal Reserve meeting.

“You’re almost certainly aware that they cut interest rates again. But you might not realize the central bankers did something much more significant. They restarted quantitative easing!

“Now, that seems like an important detail, no? Well, CNBC didn’t get around to mentioning it until the 19th paragraph of its story. And the Associated Press? They didn’t mention it – at all!

“Well, we don’t bury the lede here on the Midweek Memo, so I’m going to tell you exactly what’s going on and some of the ramifications.”

Mike points out that the mainstream financial media focused on the 25-basis-point interest rate cut. That set the Federal funds rate at between 3.5 and 3.75 percent. They also obsessed about the latest dot-plots projecting just one more rate cut in 2026 and one in 2027.

“They did not focus on the resumption of quantitative easing. I guess they don’t consider money printing when inflation is still elevated a big deal. It is.”

Mike explains that the Fed announced plans to start by buying $40 million in Treasury Bills, with purchases remaining “elevated” for a few months.

“Of course, you will not hear any central banker or mainstream pundit utter the words ‘quantitative easing.’ In fact, if pushed, they’ll almost certainly deny that they’re doing it. They’ll call it ‘reserve management,’ or tell you they’re engaged in ‘technical operations’ to keep the financial system’s plumbing moving. However, an expansion of reserves is an expansion of reserves. You can call it QE. You can call it reserve management. You can call it tap dancing with unicorns. In practice, the Fed plans to start buying Treasury bills with money created out of thin air. This will increase the money supply and put downward pressure on Treasury rates. The balance sheet will grow; liquidity will increase; risk asset bubbles will get more air. This is exactly what QE does. So, call it what you want. As the saying goes, if it walks like a duck, and talks like a duck, it’s probably a duck!”

This is also, https://www.moneymetals.com/news/2024/01/12/common-definition-of-inflation-you-hear-today-is-wrong-government-propaganda-002925" rel=”noreferrer”>by definition, inflation.

Mike notes that the markets were happy with the Fed’s moves because it means they’re getting even more alcohol in the punch bowl.

Many people dubbed it a “hawkish cut.”

“What exactly was hawkish about it? Certainly, nothing that Powell & Company just did was hawkish. They cut rates – again. They announced balance sheet expansion. But Jerome Powell did say some things that one might perceive as hawkish. Powell was clearly trying to tamp down expectations of future rate cuts. He framed it as a ‘wait-and-see’ situation.”

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Mike highlights some of the comments Powell made during his post-meeting press conference, including his attempt to blame inflation on tariffs.

“Establishing a scapegoat now was probably wise, given the inflationary actions the Fed just took.”

The Fed’s latest dot plots projecting the trajectory of interest rates were also viewed as “hawkish.” But as Mike notes, “These dot plots are virtually worthless. FOMC members are notoriously bad at projecting the trajectory of interest rates, even though they’re the ones literally setting the rates.“

So, why does any of this matter?

“The Fed is cranking up the inflation machine. And we already have elevated inflation.

“The central bankers at the Fed are revving up the inflation machine while trying to convince you they are diligently fighting the inflation dragon. They made two concrete moves to loosen monetary policy, but they said some things to make you think they might not loosen much more. Bear in mind, we got this same song and dance at the November meeting. The Fed cut and ended balance sheet reduction, but then tried to convince you there would be no December cut.

“And here we are.

“I suppose the Fed could theoretically hawkishly cut all the way to zero!

“And again – I can’t emphasize this enough – this money creation and credit expansion is inherently inflationary.”

Mike points out that we’re already seeing the inflation impacts of the prior cuts, with a rapidly accelerating increase in the money supply.

“The fact that money supply growth has ramped up since the Fed began cutting interest rates underscores an important point. The central bank doesn’t have to create money through quantitative easing to increase the money supply. Artificially low rates are inflationary in a fractional reserve banking system. And now we’re going to get QE on top of it!”

Mike emphasizes that it’s crucial to watch what the Fed does and to not focus so much on what they say. When they talk, they’re trying to gaslight you. In fact, they’ll even claim inflation is good for you.

“Conventional wisdom holds that falling prices are detrimental to the economy. Once again, conventional wisdom is wildly wrong.”

Mike proceeds to destroy this myth.

“The idea that falling prices are bad is nothing but gaslighting by the government and its enablers in academia and corporate media. They need constant monetary inflation to support government borrowing and spending. Fiat money is fuel for big government.”

Mike says that’s why you can never vote this policy away. The powers that be don’t view the inflationary characteristics of a fiat system as a bug. It’s a feature.

Mike ends the show with a call to action: get real money – gold and silver – to protect your wealth from this relentless government and central bank devaluation. Call 800-800-1865 and talk with a Money Metals precious metals specialist today!