CELENTE: What to Expect from the Fed
If the Fed cuts interest rates by only 25 basis points tomorrow, it will not heavily ramp up the equity markets
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Every eye on Wall Street is on how much the Federal Reserve will lower interest rates after its meeting tomorrow. Again, not “if” but how much!
The guess on The Street, according to a CNBC Fed survey, is a 25-basis-point reduction. Should that be the number, it will do little to regenerate sagging economic and job growth.
As for what the rate cuts will accomplish, this is how Gregory Mannarino sees it:
“This is how SEVERE the current issue is with central banks now inflating the world money supply at a pace which has never been seen before. (Keep in mind, this is going on at the same time that the world economy is contracting at its fastest pace on record).
“The Global Broad Money Supply Reached $129 Trillion in December 2023. Global broad money supply increased from $26 trillion in 2000 to $129 trillion in 2023. During this period, the global money supply grew by 4.9 times, nominal GDP by 3.1 times, real GDP by 2.2 times, and the Consumer Price Index (CPI) by 2.6 times.
“As I have explained REPEATEDLY. Inflation is a MONETARY POLICY ISSUE! And monetary policy is dictated by central banks. In this case, the Federal Reserve. This issue is about to get EXPONENTIALLY worse starting on Wednesday, yes, THIS Wednesday. (Conclusion of the FOMC meeting).”
Yes, the central banksters and the politicians have created the inflation model. Go back just a few years ago. In 2020, when they launched the COVID War and forced everybody to stay home and not go to work, they artificially propped up the economy by pumping in countless trillions of fake money backed by nothing and printed on nothing.
As a result of flooding the world with cheap money, zero and negative interest rates—from hi-tech to heavy industry, from housing to shipping costs etc.—across the economic spectrum inflation skyrocketed. In the U.S., for example, home prices soared nearly 50 percent… and again, across most of the economic spectrum, many of the prices that went up, did not come down.
What’s Next
If the Fed cuts interest rates by only 25 basis points tomorrow, it will not heavily ramp up the equity markets and may actually push equities lower.
The same with gold prices.
How low will gold go? Possibly a drop of $100 per ounce, since it has not had a steep correction for months. But considering the geopolitical turmoil with the Ukraine and Israel wars ramping up, as evidenced by Israel’s latest attack in Lebanon, despite interest cuts of only 25 basis points, gold prices may well spike much higher.
This is The Times of Israel headline as we go to press:
“Several killed, thousands injured as vast wave of pager explosions strikes Hezbollah – Terror group blames Israel, vows revenge; hospitals in Lebanon overwhelmed by wounded, including Iranian envoy, after unprecedented, coordinated attack amid surging war fears.”
Yes, thousands wounded and several killed including an Iranian envoy, allegedly by Israel. Yet, those blaming Israel and seeking revenge for the killings are called “Terror group,” when in fact, Israel should be called the terror group. And now with another Iranian official killed by Israel, Tehran will also retaliate.
The Israeli terror attack was embraced as “brilliant” by pro-Israel media whores in the U.S.
John Podhoretz, the editor of Commentary, posted: “So this would qualify as the single most perfectly targeted strike against an enemy force in the history of the planet Earth.”
At least nine people are dead and some 4,000 injured across Lebanon – all in an effort by Israel to spark a wider war—fully protected by Washington.
TREND FORECAST: Tracking trends is the understanding of where we are and how we got here to see where we are going. And as we say, “Opportunity misses those who view the world through the eyes of their profession.” Thus, most in the economic arena have no clue about the current events forming future trends. And most only believe in what they want to believe rather than seeing things for what they are.
It should also be noted that in today’s Wall Street Journal, a back page article was about the U.S. yesterday warning Israel not to ramp up the war against Lebanon:
Israel’s ramping up the war with Hezbollah will not “ensure the return of Israel’s northern communities to their homes,” it will only “un-ensure” a return because the war will now escalate. And to make this clear, in 2006 Hezbollah defeated Israel and forced them out of Lebanon. Also, the killing of another Iranian official has pushed Iran to strike back.
As we say in trend forecasting, all things are connected. Thus, as a result of the escalating war, oil prices and gold prices are on the cusp of a sharp escalation. And as we have long forecast, should Brent crude hit the $130 per barrel price, equity markets and the global economy will crash.
Thanks Gerald and Greg.