0:01 The Federal Reserve will be turning the
0:04 money printers back on. So, get ready
0:06 for more inflation. So, if you remember,
0:09 I predicted back in 2024 that they're
0:10 going to turn the money printers back on
0:13 in 2026. And it looks like there's now a
0:16 high probability of that happening. So,
0:18 I want to tell you what happened and
0:20 what this means. Jerome Powell, who's a
0:22 chair of the Federal Reserve, spoke at
0:24 the NAB conference in Philadelphia this
0:26 week. So, that was about 47 minutes
0:29 long. And I I don't want to waste 47
0:30 minutes of your life. So I'm just going
0:31 to show you the highlights which
0:34 consists of three video clips and then
0:37 I'm going to give you my insights.
0:38 Okay. A big question is will the Federal
0:41 Reserve cut interest rates at their next
0:43 meeting? The Federal Reserve's next
0:45 meeting is going to be on October 29th.
0:47 So not too far away. So I'm going to
0:49 show you this video clip which gives us
0:51 a hint at what they're going to do.
0:53 Please take a look.
0:55 Based on the data we do have, it's fair
0:57 to say that the outlook for employment
0:59 and inflation does not appear to have
1:01 changed much since our September meeting
1:04 four weeks ago. Okay. Jay Powell said
1:07 that their outlook on employment and
1:09 inflation have not changed since their
1:10 last meeting. Now, this is very important.
1:12 important.
1:14 At their September meeting, they gave
1:15 their projection about what they're
1:18 going to do for the rest of the year.
1:19 You can see their projections right
1:22 here. So, let's take a look at that. You
1:24 click on that and that will open up
1:26 their report. And if you go to page two
1:29 of the report, you're going to see this.
1:31 Right now, the federal fund's interest
1:35 rate is at 4.25%.
1:36 In September, they projected that
1:38 they're going to cut interest rates down
1:42 to 3.75% by the end of this year. It
1:46 says 3.6% 6% because it's a range of
1:49 3.5% to 3.75%.
1:50 But we just use the top end of the
1:53 range. Anyways, this means that if their
1:56 outlook on inflation and employment have
1:58 not changed since September, then
1:59 they're going to stick to their
2:01 projections, which means that they're
2:04 going to cut interest rates by 0.25% on
2:06 October 29th. And then they're going to
2:08 cut interest rates again by another
2:12 0.25% 25% in December, bringing the Fed
2:14 funds interest rate down from the
2:19 current 4.2.5% to the projected 3.75%.
2:21 Okay, so does the market believe that
2:23 it's going to play out like this? The
2:26 answer is a strong yes. According to the
2:29 CME Fed Watch tool, there's a 97.8%
2:31 chance that the Federal Reserve will cut
2:34 interest rates on October 29th. Now, let
2:36 me show you the odds for the December
2:39 meeting. There's a 92.8% 8% chance that
2:40 the Federal Reserve will cut interest
2:43 rates by 0.25%
2:45 on December 10th.
2:48 Now, what does this mean? It means more
2:50 easy money is right around the corner.
2:52 And this is going to be a tailwind for
2:54 the stock market and also for precious
2:56 metals. Moving on to the second
2:58 highlight. When the Federal Reserve
3:01 prints money, it's called quantitative
3:03 easing or another way to say it is
3:06 balance sheet expansion.
3:07 I mean, those are just fancy ways of
3:10 saying money printing. If the Federal
3:12 Reserve wants to suck money out of the
3:14 system, it's called quantitative tightening.
3:15 tightening.
3:17 I want you to take a look at how much
3:18 money the Federal Reserve has been
3:21 easing or printing since the GFC, the
3:23 great financial crisis.
3:25 To prevent an economic collapse, they
3:29 had to print around $4 trillion.
3:31 And then during the pandemic, to prevent
3:33 an economic collapse, they had to print
3:35 another 5 trillion. And then of course
3:38 we got the raging inflation. And then to
3:41 fight inflation, what did they do? In
3:43 addition to raising interest rates, they
3:46 started to suck money out of the system
3:49 with quantitative tightening with QT.
3:50 Now I want to show you this video clip
3:52 of J. Powell suggesting that
3:54 quantitative tightening could end soon.
3:58 So please take a look. Since June 2022,
3:59 we've reduced the size of our balance
4:03 sheet by $2.2 2 trillion from 35% to
4:06 just under 22% of GDP while maintaining
4:09 effective interest rate control. Our
4:11 long-stated plan is to stop balance
4:13 sheet runoff when reserves are somewhat
4:14 above the level we judge consistent with
4:17 ample reserves conditions.
4:18 We may approach that point in coming
4:21 months and we are closely monitoring a
4:23 wide range of indicators to inform this decision.
4:24 decision.
4:26 >> So listen, this is what I said back in
4:28 2024. I said first comes the interest
4:31 rate cuts and then they're going to stop
4:33 the tightening which is right around the
4:36 corner and then comes the quantitative
4:40 easing or the money printing in 2026.
4:42 I mean their playbook is obvious because
4:44 they're cornered. They have no other
4:46 choice. And unfortunately it's going to
4:48 require a greater amount of money
4:51 printing in every subsequent crisis
4:54 which means more monetary inflation.
4:56 This is why you see the price of gold
4:58 doing its thing, acting as an inflation
5:01 hedge. If you didn't know, gold has gone
5:04 up by 60% year to date. The more dollars
5:06 that they print, the more gold is going
5:08 to go up. And they're warming up the
5:10 money printers.
5:12 So that's why people say that gold is a
5:14 safe haven because they can print
5:16 dollars, but they can't print gold. And
5:17 the more money that they're going to
5:20 print, the more devalued dollars it's
5:23 going to take to buy an ounce of gold.
5:24 And just so you know, the Federal
5:26 Reserve hates gold. Like, do you know
5:28 why? Because the Federal Reserve's
5:31 ability to print money gives them more
5:34 control and more power. But people are
5:36 catching on to this unfair game. Other
5:38 countries, they picked up on this a
5:40 while back and they started ditching the
5:41 dollar. They started ddollarizing right
5:44 after the GFC.
5:46 Now, more and more Americans are waking
5:47 up. They're catching on to this because
5:50 of inflation. Now, I want to show you
5:52 this last highlight. It's when J. Paul
5:54 was asked about the alarming rise in
5:56 gold prices. So here's what he said.
5:57 Please take a look.
6:00 >> Uh so one of your predecessors, Alan
6:01 Greenspan, used to view the price of
6:04 gold as an indicator of inflation risk.
6:06 So in that context, how do you view the
6:08 rally that we've seen in gold? And if
6:10 you want to throw in Bitcoin, you can
6:12 comment on that, too.
6:14 >> I I you know, I'm not going to comment
6:16 on any particular asset price uh
6:20 including that one. And uh I think we we
6:23 think of of uh inflation as driven by
6:26 you know fundamental supply and demand
6:29 uh factors and uh it's not something we
6:31 look at you know actively.
6:33 >> Okay. Fair.
6:35 >> There you go. Paul gets asked about the
6:37 rising price of gold and how does he
6:39 respond? He responds with no comments.
6:41 I'm telling you he knows like he knows
6:42 what's up. He just doesn't want to tell
6:45 the truth. It's pretty straightforward.
6:47 The more money that's out there, the
6:50 more devalued each dollar is, and the
6:52 more dollars it's going to take to buy
6:53 anything, not just gold, not just
6:57 silver, but a home, groceries,
7:00 utilities, etc., everything. And I'll
7:02 just say that it wouldn't be a problem
7:05 if incomes rose on par with the rate of
7:06 money printing. But that's not the
7:08 reality. And it's a problem because all
7:10 this money printing, it's going to widen
7:12 the wealth gap because some people are
7:13 closer to the money printers than others.
7:15 others.
7:17 So, what's that proverb? The closest to
7:19 the money printers will benefit the
7:22 most. So, what do we learn today?
7:24 They're still on track to continue
7:26 cutting interest rates. They're going to
7:28 stop the tightening soon and they're
7:30 warming up the money printers.
7:32 Inflation's going to continue. We're
7:34 going to see more asset price inflation.
7:37 And I'm telling you, we are making
7:38 history. We're in the middle of the
7:39 great meltup. And I'll say it again,
7:42 it's a process. It's not an event. So
7:44 when people read about us like this
7:46 situation right now in the history
7:47 books, I'm talking about like 50 years
7:49 from now, this is going to be known as
7:52 the era of when the central bankers took
7:54 control and greed and recklessness
7:57 ruined our country.
7:59 But on a lighter notes, I appreciate
8:01 your support. Thank you so much. Please
8:03 subscribe and I wish you a very nice
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