The Cure Is Worse Than the Disease

The Fed is printing money to save the economy from a recession. The cure could be worse than the disease.

The largest manufacturer in America, Boeing, is considering layoffs.[1] Bank of America think that we are already in a recession and Federal Reserve Bank of Saint Louis President James Bullard thinks that unemployment could hit 30%.[2][3]

Therefore, the Fed is bailing out municipalities and is buying mortgage backed securities with at least $4 trillion ready to lend (out of thin air).[4][5][6]

Oliver Harvey at Deutsche Bank thinks that one should hedge against inflation.

“ We are worried that the real pain trade for markets – and the economy – is the long awaited return of inflation.

A good hedge would be to buy gold, as well as inflation linked bonds in the US and Euro Area, which are currently trading at all time lows.”[7]

At best, stocks will be inflated along with everything else- defeating the purpose and killing the dollar.

Weimar, here we come![8]

[1]https://www.wsj.com/amp/articles/boeing-considers-dividend-cut-layoffs-amid-cash-drain-11584637183

[2]https://www.google.com/amp/s/www.cnbc.com/amp/2020/03/19/bank-of-america-says-the-recession-is-already-here-jobs-will-be-lost-wealth-will-be-destroyed.html

[3]https://www.bloomberg.com/amp/news/articles/2020-03-22/fed-s-bullard-says-u-s-jobless-rate-may-soar-to-30-in-2q?__twitter_impression=true

[4] https://www.wsj.com/articles/federal-reserve-to-increase-frequency-of-dollar-transactions-with-foreign-central-banks-11584712851?redirect=amp#click=https://t.co/nwa99gU8o6

[5]https://www.newyorkfed.org/markets/opolicy/operating_policy_200319a

[6]https://www.marketwatch.com/amp/story/guid/C1659ACA-6C39-11EA-A687-9E83803F6B96?__twitter_impression=true

[7]https://www.zerohedge.com/markets/deutsche-bank-helicopter-money-will-be-disastrous-and-will-lead-hyperinflation-buy-gold

[8]https://www.hamiltonmobley.com/blog/inflationary-stock-market-recessions