Fed Worried Cost of Living Not Rising Fast Enough – Ep. 112

* The Dow Jones finished up almost 140 points - back over 17000 * The Dow has now rallied 1,000 points since its lows on Friday following the lower than expected Non-Farm Payroll number * The market originally sold off until traders realized that bad news is good news and they bought the dip * The buying intensified today following the release of the FOMC minutes from the last meeting * I predicted the markets would experience a rally based on the weak Non-Farm Payrol number * The U.S. market looks like it's standing still compared to the markets overseas * Now that so many traders are starting to connect the dots and realize that a rate hike is not around the corner we've seen a huge rally in overseas stocks, particularly in emerging markets * All currencies continue to gain against the dollar * Silver prices earlier in the week hit a 3-1/2 month high * Gold got back above 1150 * Oil prices are close to $50/barrel * All of this is happening because traders are beginning to pare back their rate hike bets * In light of today's release of the dovish September FOMC meeting minutes the trend will intensify * Why were people surprised by the dovish minutes? * If you read the minutes, the real reason the Fed did not raise rates is because inflation is too low * They also said they would risk credibility raising rates below 2% * Lose credibility with whom? * If they are afraid to raise rates with inflation below 2%, they why have they been bluffing that they are about to raise rates? * The official inflation number has been below 2% the entire time they have been talking about a rate hike * I have been saying that they will continue to pretend to raise rates, but they won't * I thought it was funny that Netflix raised their rates 11% - the Fed must have thought this was good news * The real reason the Fed won't rais rates is that they don't want to prick the bubbles * We have a bubble in the stock market * A bubble in the real estate market * A bubble in the bond market * Auto loans, student loans, consumer credit, art - you name it * The Fed doesn't want the government to deal with higher interest rates * Look at the headline in the Wall Street Journal about foreign central banks beginning to dump treasuries * Look at how many treasuries China has sold * This is the tip of a huge iceberg * How is the Fed going to end QE when it has to take the other side of the mother of all trades? * CNBC cited overseas problems washing up on our shore as the reason why the Fed won't be raising rates - these are not overseas problems * The problems started here - they're just coming back * The overseas markets were reacting to higher interest rates and a strong dollar * This game is going to end - the next time the dollar goes down, it's down for the count * Rather than having foreign central banks coming to its rescue, they are going to be joining in the dollar selloff just like everybody else * I wanted to comment on an Robert Wenzel's article in the Economic Policy Journal * Wenzel appears to be referring to me but does not mention my name * Here's the title of his piece, dated September 18, following the most recent Fed meeting: * "The Absurd Idea That The Fed is Not Going to Raise Rates" * Wenzel refers to "certain so-called Austrians out cheering that they were proven correct in their view that the Fed will not raise rates..." * Many people commented that he must be referring to Peter Schiff, but he denied this * Wenzel seems to believe I do not think the Fed should raise rates * I am not saying what I think the Fed should do, I'm saying what I think they will do Our Sponsors: * Check out FRE and use my code LISTEN20 for a great deal: https://frepouch.com * Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD * Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy