Hey There Income Hunters,
Here’s a headline for the ages:
“Welcome, Comrade! Biden’s Soviet-born nominee for Comptroller of the Currency thinks Fed should ‘end banking,’ admires USSR’s economy because there was ‘no gender pay gap’ and says hedge funds are an ‘a**hole industry’”
The story is about Saule Omarova, President Biden’s nominee for currency comptroller — and a harbinger of a radical shift in the administration.
You see, the Office of the Comptroller of the Currency (OCC) charters, regulates, and supervises all national banks and federal savings associations, as well as federal branches and agencies of foreign banks. And it’s nominally an independent bureau of the U.S. Department of the Treasury …
Independent? No, no, no. This is the next phase of Janet Yellen’s personal agenda to reverse the wealth gap.
A few other observations:
- Omarova is a Cornell Law School professor who graduated from college in Moscow, where she attended on a scholarship named after Vladimir Lenin.
- She wrote a paper advocating for the Federal Reserve to take over Americans’ personal banking in order to have more policy clout against big banks.
- Republicans and bank lobbyists already oppose her nomination to lead OCC
Today we’ll review Yellen’s true intentions and what they mean for the market — and your wealth.
The Real Janet Yellen
Let’s begin with Yellen’s initial quotes as Secretary of the US Treasury:
- “Right now, with interest rates at historic lows, the smartest thing we can do is act big.”
- “We should have greater cooperation between the Fed and the Treasury, with both the monetary and fiscal policy working together and supportive. This is a good backdrop for risk sentiment.”
Not sure what she meant by risk sentiment, but vision is certainly filled with risk.
In February, I addressed an op-ed piece in the Washington Post byLarry Summers, a past senior US Treasury official under Bill Clinton, in which he wrote that President Biden’s stimulus plan, while admirably ambitious, was too expensive and could risk runaway inflation.
“We face a huge economic challenge here and tremendous suffering in the country. We have got to address that,” she said. “That’s the biggest risk.”
Yellen only sees the wealth gap as the risk to this country. She chooses to crush the markets and the wealth of the rich in favor of equality.
Next, my Feb 19 editorial Fed calls for “society wide" commitment to reaching full employment …
Here’s what I said in my Feb. 19 editorial about the Yellen and J-Pow were putting us on …
- Back in the late 1970s, inflation was soaring, but the US had very low debt … so, we could raise rates to stop it.
- Here’s the poison pill before us today … when companies have high-interest costs to service debt, higher rates will cause massive defaults.
- That is why hyperinflation is a real possibility, the Fed will not have the monetary tools (interest rates) to slow it down when 3-4% inflation arrives…
They absolutely do not have the tools to slow inflation down without creating a debt crisis that would burst the housing, stock, and bond bubbles.
The Proof is in the Pudding
The Fed is putting a lid on Mortgage rates as they purchase 2x the number of mortgages a month from the banks …
What happens when they decrease the number of mortgage purchases a month?
We have seen this movie before (The Big Short) …
- Mortgage rates widen as lenders demand greater protection against defaults
- Affordability drops and the market turns from home buyers to home sellers
- Housing prices drop and homeowner’s equity in the home drops causing them to pull back on spending
- Once the equity falls below the principal on the mortgage, default rates rise causing the housing market and the economy to weaken
Bring It Home
The Delta variant has pushed the US closer to a deep correction in financial markets.
This is a necessary step down a path to correcting the errors of our Fed and Government …
They are now both in desperation mode, which will certainly cause them to make hasty decisions and mistakes …
The Democrats are desperate enough to push the US into hyperinflationary mode and the signs to watch for include:
- Yield curve controls, which they must incorporate at some point or risk bursting the everything bubble they have created
- Janet Yellen re-writing the Fed charter to allow the Fed to use the reserves on their balance sheet as legal tender and send it directly into the economy
- Digital Dollars, which would give the Fed much tighter control on the monetary system by requiring every citizen to hold a digital wallet at the Fed
It is time to micromanage the information flow as we head towards the end of the year … This is crunch time when it is critical to stay ahead of the market narrative and anticipate what’s next.
And that’s exactly what I’m here to help do in Power Income.
Live and Trade With Passion My Friends,