FED TOLD TO SPEED UP TAPERING, IMPROVE COMMUNICATIONS AND RELEASE PAPER ON DIGITAL CURRENCY

Guest Writer, December 4 2021

Jerome Powell and his colleagues at the Fed are getting advice from a new generation of college students; maybe that’s a group they’ll listen to.

They’re telling them to speed up the tapering, enhance communications with the public and finish their study on digital currency.

For a few minutes every semester or two, the students act as Fed officials and compete to pitch staffers the best direction for the economy.

Never mind the Wall Streeters. Here’s a fresh look from the next generation policymakers.

By Dave Allen for Discount Gold & Silver

Jerome Powell and his colleagues at the Fed are getting advice from a new generation of college students; maybe that’s a group they’ll listen to.

They’re telling them to speed up the tapering, enhance communications with the public and finish their study on digital currency.

For a few minutes every semester or two, the students act as Fed officials and compete to pitch staffers the best direction for the economy.

Never mind the Wall Streeters. Here’s a fresh look from the next generation policymakers.

Liza Brover, a senior at Penn who competed in the College Fed Challenge this year, explained:

“This competition is a window for the Fed to see how young people look at the economy. To that extent, people should care what we have to say about inflation and employment.”

Earlier this fall, college Fed clubs around the country took a look at the economy.  Covid was finally starting to level off, when the Delta variant reared its ugly head. 

Inflation was getting hotter and hotter, but it appeared to be transitory. And job gains, after a summer surge, looked to have slowed.

The Fed students debuted a policy decision based on those conditions — much like the real one we get from the actual FOMC roughly every six weeks. 

The best presentation wins Round One and then moves on to Q&A with Fed economists and other staff.

The latest winners were students from Pace University. That team recommended that the Fed issue a new document that’s more explicit about the path of the economy.

They also presented other recommendations, such as keeping the current pace of its asset purchases.

Pace senior and team co-captain Fiona Waterman “It’d be around two pages, just letting market participants into the mind of the Fed and the specific indicators that help guide their outlook…”

That advice still holds true as the Fed made a recent hard right turn. Bowing to the possibility that surging prices might stick around, Powell announced the Fed will likely speed up the tapering of its bond purchases.

Plus, it added, an interest rate hike might not be as far off as it had been saying.

Another Pace captain Winnie Liu said, “The Fed should be more specific about what kind of [specific] conditions would trigger liftoff. 

“If the economy continues to grow and inflation stays elevated, how long can the Fed afford to wait to raise rates?” 

Other students say the Fed should have better prepared the public for that switch dynamic.

Penn sophomore (and co-captain of the club that won 2nd place this year) Brian Lee, noted:

“What we would have hoped to see was the [specific] conditions which would have led the Fed to r...

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WILL THE FED RAISE RATES 6 TIMES IN 2 YEARS TO REIGN-IN INFLATION?

Guest Writer, December 1 2021

Market bull Phil Orlando believes the Fed will raise interest rates six times over the next two years to reign in significant ongoing consumer price increases.

Last week he said, “…we will see two quarter-point rate hikes…in the second half of [2022], and perhaps another four quarter-point rate hikes over the course of [2023].”

In other words, Orlando and his firm, Fidelity Hermes, see the Fed Funds rate rising from its current 0% to 0.25% range to 1.75% to 2.0% two years from now.

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TIGHTENING LABOR MARKET GETTING TIGHTER - It’s Especially Squeezing School Teachers

Guest Writer, November 20 2021

One measure of that is the latest JOLTS ratio, showing that for every job opening in September, there was significantly less than one person actually seeking a job.

The 0.7 job seekers available per job is an all-time low, with the exception of one month — April 2019 — when the stat hit 0.69. That’s according to the government’s Job Openings and Labor Turnover report, released last Friday.

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RISING INFLATION NOT OVER YET - Is Bigger Income Growth a Consolation?

Guest Writer, November 17 2021

Inflation came in like a hot potato last month.

At 6.2% for all items, virtually no economist wants to touch it, politicians just want to play the blame game, and few everyday Americans see a silver lining.

There are always a ton of ways to slice and dice inflation, including what it actually is and the best way to measure it. 

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CHINA’S XI POISED TO BECOME PRESIDENT FOR LIFE - He Paves the Way at the CCP’s Plenum this Week

Guest Writer, November 10 2021

Mao Zedong and Deng Xiaoping have nothing over Xi Jinping. 

Mao and Deng are the only two Chinese Communist Party Leaders to pen a so-called “historical resolution”…that is, until now.

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FLATTENING YIELD CURVE HAMMERS WALL STREET BANKS

Guest Writer, November 6 2021

Last Friday, the DJIA, S&P 500 and NASDAQ all closed up. But too big to fail banks lost billions of dollars in market cap. 

Among the biggest losers were Citigroup — closing down 1.7%, Credit Suisse — down 1.6%, and Deutsche Bank — down 1.3%. 

In the second tier, JPMorgan Chase, Barclays and Goldman Sachs closed down between 0.1% and 0.4%.

Their problem appeared to be the flattening of the Treasury yield curve.

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CORPORATE AMERICA JACKING UP WAGES - Execs Expect the Trend to Continue

Guest Writer, November 3 2021

Corporate America is shelling out higher wages to employees, and business executives expect to continue doing so.

According to its new quarterly survey released today by the National Association of Business Economists, a record high 58% say they increased pay at their companies during the 3rd quarter.

            Just about the same number expects that trend to continue in the months ahead.

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WHERE YOU STORE YOUR GOLD AND SILVER MATTERS - Just Don’t Keep it at Home

Guest Writer, October 30 2021

So, what do you do after you buy 100 gold or 1,000 silver coins? More to the point, where do you store them?

This latter question is perhaps the most important you can ask — whether you’re a new precious metal investor or a seasoned veteran. 

Why? Because your investment’s long-term security — and growth — depends on storing it in a safe place and being able to access it when you want to “cash” it in.

Yes, it seems so elementary, doesn’t it, dear Watson? 

But what good is your nest egg if it’s not there when it hatches, i.e., when you want or need to cash some of it in?

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TOO BIG TO FAIL BANK PROFITS SOAR - Also, Consumer Sentiment Falls as Retail Sales Rise…Go Figure!

Guest Writer, October 27 2021

And the winner is…

Mega money beast Goldman Sachs took back the crown for the top equity trading desk on Wall Street.

Revenue at the too big to fail bank edged out that of competitor Morgan Stanley, which is usually Number One.

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TRADING SCANDAL FORCES FED'S HAND - Change in Personal Investment Rules Coming

Guest Writer, October 23 2021

Yesterday, the Federal Reserve announced changes to its rules regulating its officials' personal investment practices.

The changes come after recent scandals over some members' trading practices raised eyebrows and produced a firestorm of criticism.

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FED CHAIR?

Guest Writer, October 20 2021

Everyone — from Vegas casinos to online startups DraftKings and PredictIt — is accepting bets for who will be the Fed’s next chair.

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POST-MORTEM ON JOBS REPORT, DEBT CEILING, STAGFLATION AND GOLD

Guest Writer, October 16 2021

Wednesday’s article listed a handful of reasons why the coming months could be opportunistic for gold. Add one more to that list… 

Investors are beginning to worry about stagflation — a combination of lower growth and higher inflation — which hasn't been a thing since the early 1980s.

But too big to fail Goldman Sachs reported today that "stagflation" was the most common word in client conversations last week as equity market volatility remains elevated.

This week, their clients are focused on the risks posed to growth by supply chain challenges and rising energy costs.

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THE REBOUND HAS STALLED - Gold Is Positioning Itself to Take Off

Guest Writer, October 13 2021

Don’t look now, but the economic recovery, rebound or whatever you want to call it has stalled.

It’s not exactly drowning in quicksand (at least not yet), but it’s definitely mired in pools of thickening sludge.

The U.S. reported disappointing job growth for the second straight month and for the third time in six months.

Just 194,000 nonfarm jobs were added to what has got to be characterized as an restless economy in September — a significantly slower pace than the 366,000 number a month earlier. 

Economists had been expecting to reach at least 500,000 this time around.

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IS A PLATINUM COIN THE SOLUTION TO OUR DEBT CEILING DILEMMA? (Is a Ridiculous Solution the Answer to a Ridiculous Problem?)

Guest Writer, October 6 2021

Congress managed to avert a recurring crisis last Thursday, as it passed a short-term appropriations bill that will keep the lights on in the hallowed halls of Washington through December 3rd. 

That leaves members with the rest of what Hayes Brown calls “the to-do list from hell” — at the top of which is what to do about the debt ceiling.

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PRICES RISING AS HOLIDAY SEASON APPROACHES - Negative Real Interest Rates Good for Gold

Guest Writer, October 2 2021

Buy your holiday gifts now.

That’s the message from retail executives, who are warning that both shoppers and investors should brace for a challenging holiday season.

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