Don’t Get Caught In The Fed Trap Again

The Government surprised the world in 2008 when the Fed bailed out the banks at the expense of seniors and savers.

The Fed dropped interest rates to historic lows while buying U.S. treasuries and bad loans through their Quantitative Easing (QE) program. Seniors and savers lost over $4 trillion in interest income they would have normally received.

The stock market tanked. Investors, desperately searching for yield, redeployed their money into the market and higher risk bonds. Retirees had to take on more risk in order to survive.

Former Fed Chair Ben Bernanke called the consequences “collateral damage”. Seniors and baby boomers called it “catastrophic damage” as they downsized and altered their retirement plans.

Since the 2016 election, the Fed raised rates 8 times. In January 2019 they held rates, but continue to sell off mortgages and treasuries. It appears the Fed is starting a U-Turn and we could soon see more QE.

Chuck Butler reports about the recent Fed announcement:

“The Fed’s FOMC meeting ended with no rate hike and a short speech by Fed Chairman Jerome Powell. …the rate hikes might be on pause for a while and he sees the first rate cut in 2020….”

Investors were blindsided last time. This time around, if we are not prepared, it’s our own fault!

Do we really want more QE?

Chuck predicted the U-turn for quite some time. It’s time to talk with the master Fed guru….

DENNIS: Chuck, once again, on behalf of our readers’ thanks for taking the time for our education.

QE was different. It was more than a normal rate adjustment. It included buying bad debts from banks and private companies. I’d like to unbundle that for a minute.

Capitalism depends on rewarding those who do well and punishing those for making bad decisions.

I’ve received hundreds of emails complaining about the Fed, while no one praised the Fed saying they were better off today. I agree with Bill Bonner when he says, “…. The fix was in. And whether the man on the street knows how it worked or not, he’s beginning to resent it.”

Who really benefitted from QE?

By bailing out the banks and companies like GE, didn’t the Fed reward incompetence at the expense of hard-working taxpayers? It’s no wonder socialists scream capitalism doesn’t work.

CHUCK: Thank you, Dennis, for another invitation to speak to your readers. I want to say this up front so it doesn’t get mixed up with what else I have to say….

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Bill Johnson 1 month ago Member's comment

Sometimes I think the Fed causes as much damage as good.