Paul Tudor Jones fears worse inflation, and he is not alone
But here is the six million dollar question; is the Fed stupid, or just playing stupid?
Maybe we are foolish to ask the question. Think about it. The Fed owns the world’s most valuable brand, USD, they have unlimited resources to hire top talent in finance and economics, and develop computer models. They even own think tanks.
So, don’t you think behind the stage Fed chair knows better than all of us that global lockdowns will cause supply disruptions? Paying workers to be nonproductive by putting them under house arrest leads to boredom and a boom in watching streaming movies and buying items online. Moreover, in an environment of risk businesses investments are cut, the capacity falls, leading to further supply shortages.
“the six million dollar question; is the Fed stupid, or just playing stupid?”
WEALTH TRAINING COMPANY
So forcing an already lackluster global economy to shutdown, leads to supply disruption, collapses the economy and business investment, then printing trillions of dollars, and you get a toxic cocktail inflation and declining output.
We believe the Fed must have known this and only dropped the temporary inflation narrative when it became impossible to keep pedaling as people started realizing that putting their Thanksgiving dinner on the table was costing a lot more.
Paul Tudor Jones fears worse inflation, and probably the Fed as well
“I think to be the No. 1 issue facing Main Street investors is inflation, and it’s pretty clear to me that inflation is not transitory,” Jones said Wednesday on CNBC’s “Squawk Box.” “It’s probably the single biggest threat to certain financial markets and I think to society just in general.”
“I think to be the No. 1 issue facing Main Street investors is inflation, and it’s pretty clear to me that inflation is not transitory”
PAUL TUDOR JONES
Why did the Fed keep pretending inflation was transitory?
The Fed can not make any meaningful rate hikes without causing a financial calamity. When the Fed attempted to normalize monetary policy by making a measly 25 basis point hike to 2.5% in December 2018, stocks collapsed. It was the worst December on record.
Fast forward three years, and the US National Debt is 29 Trillion and there is 226 trillion in global dollar-denominated debts means that USD.
So if the Fed can’t raise rates without causing a financial calamity and Paul Tudor Jones fears worse inflation, what can the Fed do?
Lockdowns could be their new policy, bearing in mind we already have a centrally planned market, so it seems logical central planned economy comes next.
A new totalitarian way of controlling consumption is by keeping the population under house arrest.