The Fork In The Road: Fight Inflation or Save The Global Economy?

Mar 22, 2023

The Fork In The Road

Fight Inflation or Save The Global Economy?

In just under eleven months, the Fed Funds rate has skyrocketed from 25 basis points to 450 basis points, representing an eighteen-fold standard deviation increase. It’s likely to move another 25 basis points higher when the Fed announces their policy decision in the next 30 minutes.

Regardless of today’s decision, we will soon see a Federal Reserve pivot, as the recession they’ve been attempting to orchestrate hits in earnest in the coming months. Fed traders are calling for 100 basis points of cuts this year and beginning as early as May.

The fork in the road is now a cul-de-sac.

The Fed is headed for a U-turn, it’s only a matter of when.

Lower rates into higher inflation equals devaluation of the currency.

As depositors worldwide withdraw their funds from banks in unison, we are witnessing a financial revolution characterized by the occurrence of "bank runs," a phenomenon not witnessed since the Great Depression almost ninety years ago.

Where’s everyone running to?

Today’s depositors are moving out of cash and into other financial instruments that offer yield.

According to an article published two weeks ago by Business Insider, the average annual interest rate for savings accounts is 0.33%.¹

Why accept the paltry interest rate offered by banks when you can get five times as much holding a certificate of deposit or a short-dated treasury note?

It is ironic that the devaluation of government bonds, which is causing the collapse, is also the very thing that many investors are seeking for yield. Despite the risk, investors are rushing to lend money to a government that can only repay them with devalued dollars.

This is what it looks like at the end.

Unlike the Great Depression, today’s bank runs require no physical running. Worryingly, they are happening with the “click” of a button. It’s a situation that cannot be reacted to and can only be survived by acting in advance.

The avalanche has yet to slide in earnest. I believe it is imminent.

Vladimir Lenin famously said, “There are decades where nothing happens and weeks where decades happen.” We at Brentwood Research have spent the last five years researching and preparing for the moment unfolding before our very eyes.

Weeks are now happening in milliseconds.

Bank runs now happen with clicks.

Everything happening now, was predictable. So too are the next steps.

Rather than fixate on what the Monetary Wizard Jerome Powell says today to pump up our financial markets as he attempts to instill confidence in the final days of the Ponzi, we instead remind our subscribers of the big picture.

I came across the initial summary I submitted to the publisher for The Great Devaluation, which was completed about three and a half years ago in October of 2019. The book warned about an upcoming revolution that would result from a widespread loss of faith in the monetary and financial system. It's worth noting that the publisher changed the book's original subtitle to “How To Embrace, Prepare, and Profit from the Coming Global Monetary Reset”.

Keep in mind that the book was submitted:

• Before the coronavirus.
• Before Biden took office.
• Before the Russian invasion of Ukraine.

As you read it, keep in mind that what we are witnessing is not a complex phenomenon, but rather a cyclical one:

The Great Devaluation

The Quantitative Failure of The Federal Reserve and the end of the Global Monetary System

What if you could tell the future by truly understanding the past? What if there was an unknown gold secret sitting in plain sight on the balance sheet of the Federal Reserve? What if Donald Trump was aware of this secret and was prepared to use gold in his war against the Fed?

In this groundbreaking expose, national bestselling author Adam Baratta unveils the dark truth about the Federal Reserve, their suppression of gold, and how their biggest weakness (gold) could turn out to be the key for Donald Trump to make America great again.

Summary

The Great Devaluation is a book about the imminent and future failure of the global monetary system. It covers the history of The Federal Reserve, how it was formed and why, and the secretive nature of the independent institution. It will highlight how going off of the gold standard has facilitated the long-term devaluation of the US Dollar and has made the institution the most powerful in the world.

The book will make the case that years of manipulation by central banks have led to distorted and negative interest rates around the globe that central banks are powerless to normalize. This reality, coupled with ongoing massive government debt and deficits, indicate that central bankers have lost control of the monetary system. The extreme measures that are now being taken by central banks put the world economy at tremendous risk. The book will make the argument that the next recession will be the nail in the coffin for the Federal Reserve and the global monetary system as we know it as central bankers are left with no tools. As this occurs and becomes more obvious, gold, which has been the Federal Reserve’s “kyptonite” since their inception, will explode higher in value.

Speeding up these challenges is the presidency of Donald Trump, the first president to openly and aggressively attack the Federal Reserve. Trump’s agenda is at odds with the Federal Reserve as he seeks monetary policies that will reduce our negative balance of payments and revitalize investment at home, a major key for his reelection hopes. He has made Jay Powell and The Fed his public enemy number one, having tweeted several hundred times in the last year about their “bonehead” policies. Trump’s bullying has put The Fed and their policies front and center, further complicating their ability to control monetary policy and setting up a head-to-head battle between Trump and The Fed.

All of which is set against the backdrop of the ending of the supercycle which lasts roughly 90 years. The book will highlight the major similarities between where we are today and where we were 90 years ago in 1929. It will examine the looming generational battle between Baby Boomers and Millennials and highlight how the next financial crisis will be a catalyst for a mindset shift away from monetary policies and more towards socialistic fiscal policies in the coming decades. It will foretell the of the emergency measures that will need to be taken and similar to FDR’s New Deal programs of the 1930s.

The book will make the case that nothing happening today is new. These shifts are an exact replica of what occurred after the Great Depression as policies shifted from monetary to fiscal. The book will examine the perfect storm of events that will lead to a serious and painful recession that may very well become the catalyst for World War IIII.

The book will warn readers and investors of the risks they are facing with the potential collapse of the US Dollar and the global monetary system. It will suggest that they prepare ahead of time in order to avoid the pain associated with the collapse of the monetary system. The Great Devaluation will make the case that the government bonds which have been sold to the world as the “least risky” investments, are themselves the actual problem. These assets can only be devalued as interest rates rise. As this occurs currencies all of the major currencies of the world will devalue against tangible real assets.

In the end, we will learn that those who forget history are doomed to repeat it, and that gold, the biggest weakness of the Federal Reserve, will become the cornerstone once again.

References:

1. https://www.businessinsider.com/personal-finance/average-bank-interest-rates