The 3 Mandates The Fed Has, Means Inflation Will Run Out Of Control
Summary
- Fed wants to support the stock market any time it dips.
- Fed wants to support the bond market any time it dips.
- Fed wants to support unemployment any time it rises.
- Gold and Silver will be the beneficiaries going into the summer months and end of year.
Market participants are to use to having the fed reflate deflationary events but they are not aware of the feds unwillingness to deflate inflationary events. Especially when the fed has too many mandates that are contradictory to deflation. They want to support the stock market any time it dips. They want to support the bond market any time it dips. They want to support unemployment any time it rises. All of these are inflationary mandates. If inflation gets out of control and any of these 3 are moving in the opposite direction that the fed intends for them what will they do? If they do what they have done over the past 10 years and react then they will be supporting continued inflation and not deflation. And if all 4 events happen at the same time what will the fed do? If inflation rises, bonds fall, stocks fall, and unemployment rises, will they risk an out of control moment of inflation just to save any one of these three events from continuing? My guess is yes and they will be so behind the curve on inflation that they will rather support their mandate and not looking bad than trying to fight an inflationary spiral. They will be credited with destroying the economy but only when its too late. Gold and Silver will see higher prices going into the summer months and end of year.
Analyst's Disclosure: I am/we are long SLV.
not a financial advisor don't believe anything i say
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