Craig Hemke – Are Central Bank Policies Truly Helping The Little Guy Or The Economy?
Craig Hemke, Founder and Editor of TF Metals Report, joins us for a wide ranging discussion on the key effects to the markets, economy, and consumers as a result of ongoing central bank policies. We start off recounting how the Fed put the US economy and other central banks on this experiment of massive injections of liquidity through quantitative easing (QE) 13 years ago, and now is trying to exit the process and hike the Fed funds rate to temper inflation, mute demand, without crashing the markets. Craig points out that most of the general equities are still held by the top 10% income earners, and that the inflation created from all this liquidity is most negatively impacting the middle income to lower income citizens, that got the least benefit from the last 13 years of these policies.
As we continue to see the stagflation backdrop develop with persistently high inflation, high energy prices as a tax on everything, a slowing economic growth outlook for GDP so far in 2022, and changes coming the labor markets where company’s are starting to layoff workers, Craig asks: “How is any of this really helping the little guy?”
Next we review the possibility at that after this current rate hiking cycle plays out, and the Fed is forced to pause or reverse course, that they’ll likely be thrust into being the buyer of last resort once again in the bond markets, as there is no good rationale for holding treasuries if the coupon yields are being steeply wiped out by higher inflation. We wrap up with a discussion of if there could be a rotation out of bonds and into the precious metals as investors seek ways to find shelter from the storm and preserve their purchasing power.