Hey There Income Hunters,
If you’ve been reading Power Income for any length of time, you know I think Jerome “J-Pow” Powell and his minions at the Fed are clueless as to how the financial markets really work.
The problem has always been that they never understood human behavior and the psychology behind the economic cycles.
First, Powell told the public that the Fed would be patient with inflation as it approached the central bank’s 2% target …
Then he said it was “transitory” at +3% …
Now at +4%, it’s a real problem.
As I have said many times, the Fed, the banks and the government (otherwise known as the “Wall Street Government”) have been trapped under their self-inflicted debt burden for 40 years.
It’s a debt burden they turned into an inflation problem because they decided it was the best solution for THEM. It certainly wasn’t for the hard-working Americans they were meant to protect.
Here is the worst part of what … someone will get a call from the Fed and be told when they are about to make a real policy shift.
That is why in 2008, when just about every American suffered a loss of wealth, the Wall Street Government made a fortune.
But that’s OK — because this time, it’s the real investors who will make the money.
You see, now it’s the Wall Street Government that is trapped by the driving forces of inflation.
You know what they say about payback, and this time we are on the right side of the table.
Option Pit wants you to come along for the ride as we level the playing field and take advantage of this paradigm shift of the Street.
Would you like to be privy to how this is all going to come down — and make a ton of money at the Wall Street Government’s expense?
I’ll give you a taste of what’s to come …
We are not Even Halfway to Where Inflation is Going
Here is just a sample of what the J-Pow and the crony capitalists in Washington hide from citizens …
You see, the moratorium placed on evictions and rent was purposely used to keep inflation down. Landlords were told to put zero in the column for rent if payment was delayed. This kept the impact from rising rents much lower than normal. Analysts believe it took off 1% from core consumer price inflation (CPI).
This component just happens to represent 33% of overall core CPI. So, now that the moratorium is expiring, we are going to see a jump in inflation just when it should be subsiding.
What Will They Do?
The only thing the Fed and Government can do is stall and talk tough.
We will hear taper (reverse QE) is coming. This is when the Fed sells securities to the banks, which drains funds from the system as they try to slow inflation.
However, this tactic will be like bringing a squirt gun to a brush fire …
And get this, tapering will cause short-term bond yields to rise and long-term bonds yields to fall. That is called a narrowing of the 2-year/10-year r yield spread and it will put significant pressure on bank earnings because it shrinks their profit margin on loans.
Bring It Home
The Option Pit team has decades of experience working inside global banks, in Washington and making markets in options …
We have a community capable of not just leveling the playing field, but tipping it in your favor.
And that is why you need to join us on Thursday for …
You can learn how to trade like a hedge fund — without the performance pressures. Plus, you’ll have access to the intel from the experts who have operated on the inside …
And you can speak directly to pro traders who turn current events into the day’s best trade ideas …
Don’t miss it!
Keep sending your awesome feedback and questions, and as always …
Live and Trade With passion My Friends,