Fed’s QT Taper Talks Are Already Behind The Eight Ball

On June 1, 2022, the Jay Powell Chaired Federal Reserve formally commenced Quantitative Tightening (QT).  The Fed’s balance sheet had topped $8.9 trillion.  Consumer price inflation was rocketing towards a 40 year high.

“Brace yourself,” advised JPMorgan Chase CEO Jamie Dimon at the time.

The master plan was for the Fed to reduce its holdings of Treasuries and mortgage-backed securities by a combined $47.5 billion per month for the first three months.  Then, in September 2022, this monthly reduction was increased to $95 billion (i.e. $60 billion in Treasuries and $35 billion in mortgage-backed securities).

Aside from the abrupt $400 billion spike in March of 2023, when Silicon Valley Bank, Signature Bank, First Republic Bank all failed in rapid succession, QT has continued according to plan.  Today, the Fed’s balance sheet stands at just under $7.7 trillion.

The next FOMC meeting is on January 30 and 31.  And the scuttlebutt from the Wall Street Journal is that the Fed’s now considering a change of plans: Continue reading

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The Rapid Closure of America’s Technological Power Gap

You may not know this.  It wasn’t widely reported.  Certainly, it is something the elites in Davos would rather not acknowledge.

In late 2023, the U.S. Energy Information Administration reported that U.S. crude oil production hit an all-time high.  Reaching 13.25 million barrels per day in September 2023.

What’s especially remarkable about this new all-time high is that as recently as 2010, monthly crude oil production in the U.S. was just 5 million barrels per day.

We all know the story of this extraordinary turnaround.  Oil extraction advancements in hydraulic fracturing and horizontal drilling have allowed U.S. oil producers to deliver an abundance of oil to consumers.

These improvements in drilling efficiency have led to record production, at competitive prices, while using fewer oil rigs.  Moreover, this record production has been attained in the face of the Biden administration’s restrictive oil and gas policies.

This abundance of U.S. oil, and the price it’s being delivered to market at, has resulted in higher exports to Europe and Asia.  In fact, rising U.S. exports of crude oil to Asia were a major factor in the decision by Saudi Arabia to cut its oil prices for Asian buyers last year.  Intense competition from U.S. oil producers forced Saudi Arabia to fight for its market share. Continue reading

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Yellen’s Bald-Faced Lies

Did you see the recent government propaganda from the U.S. Bureau of Labor Statistics?

Not the latest faulty claim that consumer prices increased at an annual rate of just 3.4 percent in December.  But rather the claim that 216,000 jobs were added in December.

Upon release, and right on cue, Treasury Secretary Janet Yellen declared that the U.S. economy had achieved a soft landing.  She also said that her “hope is that it will continue.”

What Yellen neglected to mention was that October employment was revised down by 45,000 jobs and November was revised down by 26,000 jobs.  That’s 71,000 jobs the government recently reported which didn’t exist.

How many of the 216,000 jobs reported for December will wind up being pure fantasy?

Yellen also didn’t mention that 52,000 of the reported jobs are in government, 59,000 are in health care and social assistance, and 22,000 are in food services.  These aren’t the kind of jobs that create and spread new wealth and abundance to the economy.

In addition, there are 4.2 million workers that are employed part time for economic reasons.  This represents individuals who prefer full-time employment but are working part-time because their hours have been cut or they cannot find full-time work. Continue reading

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Facing Up to the Wreckage from the Past

The New Year brings both hope and optimism.  A chance to turn over a new leaf.  To pursue goals.  Work hard.  And make all your dreams come true.

The sentiment is admirable.  It is vital to attack challenges with renewed vigor.  However, the outcome, even for the most disciplined, can be a giant letdown.

January, named for the Roman god Janus, protector of gates and doorways, is depicted with two faces.  One looking into the past.  The other into the future.

The calendar year may have started anew.  But, as Janus reminds us, past actions – both good and bad – endure.  By this, there’s an abundance of wreckage from the past that still needs to be reconciled.

In the realm of money and politics there are mega amounts of leftover wreckage produced by central planners in Congress, at the U.S. Treasury, and the Federal Reserve.  Decades of deficit spending and currency debasement come with unpleasant effects.  The consequences of which dramatically impact your life and your livelihood. Continue reading

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