I have long ago figured this one out:The U.S. is a "debt-soaked nation desperate to "inflate away its debt."
"When you've got 8 to 9 percent CPI inflation, you're not going to fight that with a 4 percent, 3 percent, or even 5 percent Fed Funds Rate, which we can't even afford," he explained. "The truth is that the Fed, like most central banks throughout history, wants inflation to be higher than interest rates."
Piepenburg also suggested that if inflation were measured according to 1980 criteria, it would be "closer to 18 or 19 percent." Since 1980, the composition of goods that the Bureau of Labor Statistics uses to calculate CPI has changed. Official U.S. headline inflation was 8.3 percent in August.
He suggested that the U.S. is a "debt-soaked nation who has its back against the wall," and would reduce the Fed Funds Rate to "inflate away its debt."
"I think Powell is seeking inflation," said Piepenburg. "The only reason they're raising rates today is not to fight inflation. It's so they'll have some [reason] to cut [rates] when the real recession becomes an official recession."
He pointed to the Fed's tightening of monetary policy as contributing to a stronger dollar.
"It's a disastrous policy, because it forces the dollar to go into a situation where emerging markets, with trillions in dollar-denominated debt, are stretched too thin," said Piepenburg. "[The Fed is] going to have to make the dollar weaker."
The dollar will fall "slowly, and then all at once" once the DXY drops below its critical support levels.
"It would be nice to see a central banker be honest about it," said Piepenburg. "But to take no responsibility, and then blame it on COVID, climate change, or Putin, in my opinion, lacks a lot of courage and honesty."
Maybe we should actually buy TURKEY for Thanksgiving! The country that is!
Turkey has one of the highest inflation rates in the world. In June, consumer prices rose 78.6% year-over-year, according to the Turkish Statistical Institute
Edited by Rogerdodger, 18 September 2022 - 10:43 AM.