We talked about the Fed’s silent coup yesterday. It stems from the battle between the New York banking interests and the old-world European power structure.
What this battle is really about is control over the engines of finance.
As the Austrian economists have pointed out, the fractional reserve banking system allows the commercial banks to pyramid credit on top of base money at a 10-to-1 ratio.
This effectively gives the commercial banks the ability to create money from nothing as well. The central banks aren’t the only money-printing game in town.
And this allows the banks to determine what gets financed and what doesn’t. There’s an immense amount of power in this.
For example, should we finance oil exploration and small-module nuclear reactors… or acres upon acres of windmills and solar farms?
Should we finance small local farms… or push all agriculture into a few multinational corporations?
The ability to aggregate and allocate capital is absolutely critical to modern civilization. Those who control the engines of finance have an outsized ability to shape our world.
And here’s the thing – there’s fierce competition among the commercial banks. This ensures that each bank strives to make good credit decisions. Most of the time, anyway.
The better their loans perform, the more money, power, and influence they accumulate. So they want to finance promising companies and projects.
The European Deep State wants to usurp this power for themselves.
And they want to eliminate all competition so that there are no consequences for poor decisions. This would allow them to favor pet projects specifically designed to restructure society according to their aims.
That’s the heart of their “stakeholder capitalism”. That’s what the “Great Reset” is all about.
So the battle is on.
The Fed’s aggressive actions this year have been about beating back the old-world European powers. The “combatting inflation” meme was just a cover story.
And this is why the Fed is not going to pivot any time soon. It’s going to get the Federal Funds Rate back up between six and seven percent.
And I think they are content to let it stay there. The Fed isn’t raising rates now just to cut them dramatically later. Those days are over.
That means we’re living through an incredible macroeconomic shift. The Fed is not going to support the U.S. stock market anymore.
We better tailor our investment approach accordingly. What’s worked well for the last thirty years will not work so well going forward.
The solution? Strategic asset allocation.
More information right here: Finance for Freedom Masterclass