The Federal Reserve cannot fix inflation: Here is why!
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This whole Federal Reserve interest rate, ah, what are they going to raise again? Ah, inflation is sticky. Ah, it’s giving me angina for crying out loud. The Federal Reserve can’t fix inflation with higher rates. Can’t do it. Powell, Federal Reserve, they have zero control, zero control over fiscal policy. They have zero control over government regulations. That’s what’s driving inflation.
Jay Powell is a, he’s a wimp. Guys, he’s afraid to tell Congress what they need to hear. It’s their ridiculous spending that’s causing all this. You raise rates all you want. Go ahead, check, check if you don’t believe me. Take a look at all of the government projects coming from Biden’s first almost $2 trillion post COVID. What’d they even call that thing?
Was it American recovery? I forget. Then you got the infrastructure bill. You got the chip spill. You’ve got the inflation reduction act, which is probably the most ridiculous names for an act ever. And it’s the opposite. All of this money hasn’t even been spent yet. It’s getting doled out now. What do you think prices are going to go up? It’s government spending. It’s on ridiculous.
fiscal policy. And that’s what’s driving inflation. I was on Mornings with Maria today and Kevin Hassett, again, I wish I had a chance. Problem with television. Sometimes things get bumped around and I didn’t get a chance to question him. And he was talking about that the Fed really needs to raise rates above 7% and really to knock inflation down.
it’s gonna actually make things worse because then we’re just gonna have to borrow more money to pay interest on all of the ridiculous spending that we’re doing. I think rates are fine. I don’t think that they need to cut anytime soon. I think that that’s ludicrous. I really do. I think you need to let money be priced properly. But I mean, you go through, you go through some of these things. I’m gonna go through a couple with you and use these things as an example. And again, this is problematic.
on more than one front. So talk about inflation here in this country, not just inflation, it’s gonna be our inability to compete globally. Yeah, we talk hem and haw about China all the time. China this and China that, Chinese are gonna steal our stuff. They’ve been doing that for years. Intellectual property theft, all these things that China’s been involved with for a long period of time, we know all of this.
But they still can’t beat us if, if what? If we do business, if we do business the right way, if we don’t run the country’s economy out of Washington, DC, the state capitalism that we’ve managed to get ourselves into. There was a story here about Ford. And we talked about Ford. We talked about Ford and the Lightning versus Tesla.
Ford is getting a $9.2 billion low interest loan, below market rate loan. And it’s there to build battery factories because the powers that be in Washington DC want batteries. They want batteries, they wanna push this issue. If you think that Ford would go out, be going out and building battery factories for EVs on their own, they wouldn’t.
They went, take a look, we went over the numbers. They sold what, 4,000 something Ford F-150 electric trucks. They sold 170,000 combustion engine ones. Yeah, I got a lot of contractors out there. And I’ve got a lot of contractors and plumbers as clients. Do you think that they’re going to go out and spend $100,000 on a pickup truck for their job?
Anyway, it all has to be run out of Washington DC. And that’s, again, that’s how China runs things. And we’re told, oh, that’s the way of the future. That’s what needs to be done. No, it never works. Take a look at China. They were supposed to have this big recovery after COVID. They don’t. 20% youth unemployment. You go right down the list. So Ford’s gonna get this $9.2 billion low cost loan. Okay.
What’s it gonna do? It’s gonna just fuel inflation. And that the projects are one after another, after another, after another. Not to mention, talk about ridiculous, they want inflation for you. Oh, you’re gonna love this taxpayers. Boeing. Boeing is charging the Pentagon $52,000 for a trash can. For trash can that was previously priced at $300.
Yeah, $52,000 for a trash receptacle used on board the NAWACS plane. Oh, and there’s more. New York-based Jamaica Bearings Company sold the Pentagon 13 radio filters. They were priced at $350 each. Hey, hey, Pentagon will pay for it, just send them a bill. Now $49,000 each. Lockheed Martin jacks up the price.
an anti-submarine surveillance plane. Yes, they ranked it up by 1400%, raking in an additional $133,000. Again, that’s the Pentagon. They don’t care what they’re spending money on. Government doesn’t care. Every single one of these problems. You want inflationary? Wall Street Journal, another CIA told you so here. Fraudulent COVID aid drove up US home prices and many markets.
Every single time people, the government gets involved, it causes a disconnect. And you know, oh, Jay Powell’s a nice guy. He doesn’t want to make enemies there. I’m sorry. You know, Paul Volcker back in the day would have no problem, no problem whatsoever calling it out, which he did. There’s a fiscal side of the equation. So again, a government can, can.
you know, say, oh, yes, you know, we’re going to, our deficits are coming under control. Then no, they’re not. They’re not. And like I said, the spending hasn’t really even kicked in yet. And we’re told, yeah, we’re told, yeah, jobs market’s gonna break and unemployment’s gonna go up. I don’t see it. I’m trying to figure out how that’s gonna be the case when you need to hire all these people for this, all these infrastructure projects.
that are all over the country. Again, I don’t see it. So, you know, getting back to Jay Powell and raising interest rates, how is that gonna help with inflation? How is it gonna help with inflation? And again, the idea that inflation is gonna come under control with higher rates, gonna come down back down to 2%, that’s their target. It was absurd before when they were telling you it was 2% because we told you it wasn’t.
on the things that are most important. With government regulations going through the roof, government spending, you tell me how that’s possible. Explain it to me. All of you people are like, yeah, we need the rates, he’s gonna have to raise more, gonna get inflation under control. How’s it work so far? I don’t think raising rates has done a damn thing. Has it done anything to drive down the price of eggs? No, the avian flu, by the way. We got greater supply there. Sometimes things, it’s not so much of a demand problem, people.
It’s a supply problem. And it’s also a government spending problem. It’s a regulatory problem. That’s what drives up costs, period, the end. And again, obviously when you increase the money supply, there’s that side of the equation as well, but that’s being dealt with. It’s being dealt with. So again, I don’t know what the Fed is going to do next. Don’t.
Maybe they’ll raise in July, quarter point. Who knows? I’m just telling you, it’s not gonna do a damn thing. Watchdogonwallstreet.com.
