Free Market or Fed Market?

Money Jul 8, 2022

It's been awhile since my last post, I've been so busy with so many projects that I don't see ending anytime soon. Anyways, I'm now posting again about how I view the market that we have today and what I think will happen in the future. Again, this is not financial advice and just me expressing my opinions.

First, we're now seeing how the Fed destroyed a free market, it's been there for a long time but now I think it is very evident that entire markets go up and down depending on what the market thinks the Fed will do next. It is evident with how the market goes up every time we get bad news about the economy, especially the US economy, as it might cause the Fed to slowdown or even U-turn with its tightening, and the opposite happens every time we get good news. The Fed is now acting as the single most important factor in the direction of the market.

Second, I think the Fed is really not trying stop inflation. Real interest rates, from what I know, need to be positive if it is to fight inflation. All of this is a show to try to tell the public that it acknowledges and is doing something to fight inflation, that's after an entire clown show last year of convincing the public that inflation is transitory, I don't think they got it wrong, I really think they lied, it isn't hard to guess where inflation will go and there were so many warnings.

Third, the Fed will more likely prefer inflation than an economy falling down a cliff caused by tightening soon. I really think that they will starting pumping the economy again, definitely before the end of this year while growth will be stagnant or close to negative. Inflation will be worsened by governments not wanting to reduce spending, which is where their power comes from, while giving away inflation relief checks that will cause even more inflation if governments don't reduce their spending.

Fourth, I think CBDCs, if it will be able to catch up, will be used for fast distribution of inflation relief checks and will have a hard time competing with cryptocurrencies. I mean crypto wasn't introduced to remove the limitations of the traditional financial system but to limit and eventually stop governments from printing money, it creates inequality by inflating asset prices, destroys those in fixed income though are working hard or have worked hard to have something that they can tap on in the future. CBDCs I think will promote the adoption of crypto instead, as people will not see any difference but the value, though I think CBDCs will excite and attract a number of people before it goes down.

My fear is people will blame capitalism even though we've moved far away from pure capitalism a long time ago. We're more socialist now with governments and central banks saving bad companies and individuals that the market (the people) doesn't want or is consuming more value than they are creating. I think keeping everyone informed and educated is what will save us.

So that's it! Let me know what you think. Have a happy life with me.

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