Jay The Hawk
About to make a kill
One of the main power centres in the world are Central Banks, which are privately owned by old wealthy families. They used to operate quietly in the background, but in more recent times have taken centre stage. They have done this as they need to be more highly activist as their debt based fiat currency system approaches it’s inevitable collapse phase. (inevitable due to the magic of compound interest)
The lead central bank, the Fed, is that of the US due to its position as the controller of the global reserve currency, the dollar, and its leader is the chair, Jay Powell. He has the power, and therefore the responsibility for its actions and their effects. As you know, there is currently an existential war in effect between the CBs and INFLATION. (the Monster) Essentially the global CBs needed to massively ‘print’ to fight the effects of the plandemic, and that created the Frankenstein Monster, which now must be killed, or it will eat the global economies.
One of the weapons the CBs use against the monster is raising interest rates. In a highly indebted global economy as we have today, this weapon comes with great risks, as it adds great stresses to debtors who face increased debt servicing costs on variable rate loans and loans that come due for rollover and new loans. Too far too fast and the whole system could break. Systemic risk is high.
The CBs led by the Fed have been raising rates at the fastest rate of change (ROC) in history, as they started late. Now they are closing in on the limits, and the dangers are high of going too far. This risk is difficult to judge as there is a long lag between the raises and the effects to the economies. There are two sides on this issue, called Doves and Hawks. The doves want to go slow and carefully, while the Hawks say what is needed is faster and higher. There is a Fed meeting (FOMC) coming up this week, and the rate increase decision will be announced at 2 PM eastern on Wed Feb 01. The market major players are predicting a raise of .25% which is what the Doves prefer. This would be a reduction from the last, which was .50%, and markets have been rallying strongly on this assumption. This eases financial conditions and that feeds the Monster, which also risks destroying the economies. So all this puts a great deal of stress on the lead Fed player, the chair Jay Powell, who has everything riding on winning the war with the Monster.
I posit with very high conviction that he will surprise the market players and raise .50% (at least) due to the following:
Since .25% is already priced in, he gains nothing by only going that far
The players have loosened too much already, and the risk is for more
Jay likes to be transparent and he has already said that they will raise higher and for longer than the players have priced
The dollar has been weak and Lagarde has warned of intention for two more .50% Jay doesn’t like Lagarde and needs a strong dollar
Jay has stated he is unconcerned by the risk of going too high, but is very concerned about the risks of not “staying the course”
The players have been giving Jay the middle fingers by loosening, and he only gains critical face/cred by cutting them off
To raise by .50%, Jay needs to fight the doves, led by vice chair Braindead. His hero, Volker, had to fight the doves, and so will he
As chair, he has the power to raise by .50%, and so due to all the above he will
Jay knows it will hit the markets hard, but doesn’t care, as its the price that needs to be paid to win the Monster war
Global market players are not positioned for this, and betting against them is the high reward play.