The FED officially cut interest rates to 3.50-3.75% in a move that screams QE Déjà vu…hidden under the guise of “fresh balance sheet expansion through Treasury bill purchases.”
Translation: We’re Gonna Need a Bigger Printer.
And to keep most Americans from figuring this out, they have cleverly named this new money printing scheme as “Reserve Management Purchases.”
AKA: Quantitative Easing.
But is doesn’t change the outcome.
Why?
Once again, liquidity is being conjured out of thin air, because the most indebted federal government in U.S. history needs someone to quietly buy its bills for it.
Seriously, this is NOT about “stimulating growth,” “supporting labor markets,” or any of the other bulls**t PR lines Powell is forced to recite at press conferences.
And we use the term “forced to recite” because ever since FDR hijacked the system (the FED) and consolidated power in the District of Corruption, the Fed became an accessory to fiscal irresponsibility.
The system broke when the government swapped corporate paper for sovereign debt.
And it was all by design (Thanks Roosevelt).
Because once the Fed became the buyer of last resort for federal spending, inflation became a political problem and not a monetary one.
In an email from February 6, 2024 titled Why the Fed is Not Satan, we wrote:
So, what was once an independent central bank – owned by the bankers to prevent taxpayer money from being used to bail out the banks no longer exists.
Today the banks may own the Fed in name only, but the reins of power are political.
The president appoints the head – not the bankers.
(Read the entire article HERE)
QE Déjà Vu…
Contrary to what the Boyz want you to believe, inflation is NOT under control.
Which is why we’re now seeing QE Déjà vu …Ooops! Sorry, I meant “Reserve Management Purchases.”.
Don’t be fooled, inflation is driven by Fiscal Policy, not monetary policy.
Congress can run deficits ad infinitum…and the Fed has no authority to stop them.
And yet everyone wants to point their finger at the Fed.
Truth is you can raise or lower interest rates all you want.
But it will not change the fact that government spending has blown past anything sustainable.
Think of it this way…when you borrow without any end in sight, servicing that debt (paying interest) becomes a greater share of national income.
And that is where the real inflationary pressure comes from.
It has nothing to do with whether a handful of hawks sitting around a conference table want 25 bps or more.
Unfortunately, this will get much worse after Trump names his new puppet Fed Reserve Chairman in February 2026.
Learn why in our upcoming December newsletter (HERE).
P.S. We will also reveal what investments perform well in during a money printing environment (“Reserve Management Purchases”).
Share this with a friend…especially if they think the Fed is Satan. They’ll thank YOU later.
And tell them:
We’re Not Just About Finance
But we use finance to give you hope.
“And you shall know the truth, and the truth shall make you free.”
~John 8:32~
