Craig Hemke – Is The Fed About To Make A Policy Mistake That Roils Markets Later This Year?

Craig Hemke, Founder and Editor of TF Metals Report, joins us to discuss his general outlook on how Fed policy will affect interest rates, the bond markets, general equities, and the precious metals in 2022.  We start off discussing interest rate, bonds, the TIPS reaction to recent FOMC meeting minutes released on Wednesday afternoon, and the volatile whipsaw reaction in other markets.   Craig mentioned he could see the early part of 2022 just being a continuation of what we have been seeing in 2021, but then believes that when Jerome Powell does start hiking rates in the Spring that this will shift things and for the PMs it may be more like 2010 or 2019 where the action was all in the latter half of the year.


Next we opined on where the buying in US treasuries would come from once the Fed removes their billions of dollars of monthly accommodative buying, and Craig felt some of it may come as a safe have reaction if there was a corrective move in the general markets due to rising rates, which would essentially flatten out the yield curve again. Craig also expanded on the idea that since there is so much central bank liquidity being injected into all markets that at times all markets are responding in unison like a “universal chart.”   To that point, even if there is a correction in most markets due to the anticipation of a rate hike, that he could see gold recovering first, but still expects the Powell to backstop the markets and that they’ll also recover, and that both asset classes could move up in tandem.


We highlight the challenges that may arise if the central bank is about to hike into slowing growth and slowing economy, with the backdrop of persistently high inflation in prices, energy, and wages, and how it could be a policy error to start hiking into that stagflationary backdrop, while “inflation expectations” rise and take root.  There is a spirited debate about why there may finally be a loss of confidence in the central bank, and how even main stream generalist investors may look through Fed jawboning at how high and how long the rate hiking cycle can go before needing to reverse course again.

Click here to visit Craig’s site – TF Metals Report.

    Jan 07, 2022 07:25 AM

    Gold, Silver Plunge After Hawkish Fed Minutes Boost Dollar, Treasury Yields
    By: Carl Surran – Jan. 06, 2022
    “Gold and silver prices turn sharply lower, a day after minutes of the Federal Reserve’s December meeting flagged the potential for rate hikes to come sooner than previously expected, lifting the dollar and Treasury yields.”

    Jan 07, 2022 07:27 AM

    Rick Rule: Gold & Silver About to Go Much Higher

    Palisades Gold Radio – Jan 6, 2022
    Time Stamp References:
    0:00 – Introduction
    0:41 – Rule Investment Media
    3:28 – Regulations and Advice
    5:57 – Higher Quality Thinking
    11:19 – Notable Asset Classes
    20:50 – Bullishness & Stupidity
    23:12 – Scary Economic Cycles
    26:33 – Crypto and the Metals
    31:27 – Sprott Uranium Trust
    37:30 – Uranium Projects
    42:35 – Other Opportunities
    48:42 – Farm Land & Prices
    50:28 – Rick’s Offer & Wrap Up

    Jan 07, 2022 07:37 AM

    Lynette Zang – A Message That Everyone Needs To Hear Right Now
    I Love Prosperity w/ Jake Ducey – Jan 6, 2022

    Jan 07, 2022 07:05 AM

    SPQ(PE) :
    Set to short NatGas again (KOLD).
    Very big miss in the NFP.
    PMs SHOULD rally!

    Jan 07, 2022 07:19 AM

    The Fed sets up a “perception”, but behind the curtain they are physically intervening in markets. That is why we can’t audit them. We would find out just how much of “future tax payments of the tax payer” are being fabricated electronically and poured into the markets and under the table to the Banks.
    The intervention manipulates markets to desired levels and not reality. One algo triggers another algo and mainstreet “pennies” are not effective.

      Jan 07, 2022 07:31 PM

      Nearly all such transactions are recorded at the DTCC (Depository Trust and Clearing Corportion), which is like the ‘County Seat’ for securities; however, their data is not public.

    Jan 07, 2022 07:52 PM

    Nice dividend on POTX. Enjoy the products and get paid to wait.

      Jan 07, 2022 07:18 PM

      POTX is the main vehicle I’ve been using to get exposure to the cannabis sector lately.

    Jan 07, 2022 07:02 PM

    Based on UUP, today’s pullback in the dollar wasn’t necessarily the start of a renewed decline. UUP fell on low volume to one cent above its Jan. 2 close today which perfectly filled its big gap up from Jan. 3…

      Jan 07, 2022 07:46 PM

      agree totally…..dollar going up……but Matthew previously you said that happens from time to time when both gold and dollar are rising…because both offer safety in a storm in theory and the euro is toast and a biggest reason i forgot…because….why?….in my world it would be because over the time required to correct price in a seasonal time frame, simply not enough selling emerged to crush it but rather to shake out weak hands…now it rises again on fundamentals i suppose…..

        Jan 07, 2022 07:28 PM

        Yes, the dollar and gold rise together more often than most think. I’m talking about the dollar index, of course. Gold does not rise if the dollar in your pocket is strengthening in purchasing power but it often rises while the dollar rises versus the euro. It’s partly for “organic” reasons like safe haven appeal but mostly it’s just a side effect of market composition. Exiting S&P stocks and many other assets automatically puts a bid under the dollar since dollars are what you get when you hit the sell button and the fear that results causes many to reduce their short dollar positions including margin balances. We choose dollars by default by reducing our exposure to the most popular markets. So, dollar strength is often automatic and mechanical while gold’s is due to mindful and deliberate action.
        Gold was the world’s senior reserve asset until just 50 years ago when it was replaced with the debt substitute Federal Reserve Note. The “dollar” is the substitute for gold while the euro can be seen as one of many substitutes for the gold substitute.
        All currencies are trash that will continue to buy less and less just like the dollar despite any short term illusions to the contrary.
        The dollar is currently 95.72. When it traded at that level in early 1999, gold was under $300. That should tell everyone how useless the USDX is as a unit of account and a store of value. Imagine what would happen if other weights and measures were similarly unstable/dishonest. If the mile had been pegged to the dollar since the international commies forced their central banks upon us over 100 years ago, it would now be much less than 100 feet.

          Jan 08, 2022 08:51 AM

          oh right, now i remember…the dollar going up is an anomaly of it being trapped in a basket of 6, i believe, world currencies…so the largest being euro is junk w assets leaving europe…… so the dollar goes up by default…it is a math illusion…thanks Matthew…i will try to remember that clear relationship…lmao

          very possible that /GC does a triple bottom on daily at price around 1770 or a bit less….that would be a wunnerful classic……in retrospect traders will admire the perfection of chartism……’re gonna like it soon…..glta

            Jan 08, 2022 08:46 PM

            I think the pullback to the 1780s might have been all we’re going to get. It’s like the market needed to take gold back to where it was before everyone took off for the holidays. It’s similar to most overnight trading. Gold often goes up significantly in the middle of the night only to find its way back to the levels of the previous day by the time US trading hours start again.

    Jan 07, 2022 07:22 PM

    Another good article on concerning Fed bailouts of Deutsche Bank and further mentions prior investigations concerning Russian money laundering through Deutsche Bank. That brings up some possible thoughts about other clients of Deutsche Bank that may surface. Of course JP Morgan is a key player as usual as well as The Fed spending future tax payer money on a foreign bank or banks. Another strain on the people.