Wolf Street founder and publisher Wolf Richter blasted Nomi Prins of the Wall Street Journal (WSJ) for her "optimistic" analysis of the Federal Reserve pivoting and surrendering in its fight against inflation.
Prins, an author and journalist, said she expects the Fed to begin reversing course and becoming accommodating – given that the the U.S. already recorded two consecutive quarters of negative gross domestic product (GDP) growth. It followed the central bank reducing the pace of rate hikes to 50 basis points and neutralizing its policy.
However, Richter expressed skepticism over her remarks, saying that Prins was just one of many talking heads enticing investors to come back to the stock market.
"Obviously, these people cannot be that dumb," he said, citing other Wall Street analysts. "They had a purpose, and that purpose was to hype stocks into the stratosphere. They did it for days, and it worked."
An August 2022 speech by Federal Reserve Chairman Jerome Powell delivered in Wyoming appeared to dash Prins' hopes.
"Reducing inflation is likely to require a sustained period of below-trend growth. Moreover, there will very likely be some softening of labor market conditions. While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses," he said. "These are the unfortunate costs of reducing inflation."
A blog entry published by Birch Gold Group highlighted the reason why the Fed seems to be rooting for the stock market to fall.
"Essentially, raising interest rates broadly suppresses economic activity. This is sometimes referred to as cooling the economy and stock markets falling are a clear indicator of this economic cooling," it said.
"Powell left out one pretty obvious piece, though – that slower growth, unemployment and pain will materialize in the midst of a plunging stock market."
Gold is holding down the fort when all else is failing
When all else is crashing in the market, there is one asset that can be counted on to hold down the fort – gold. (Related: Gold demand surges in first quarter.)
"Gold dropped about $30/oz on the CPI [consumer price index] news this morning," Richter said.
"Gold, a classic and time-proven hedge against inflation over the long term, after a huge run-up during the Everything Bubble, has remained roughly flat since the Fed pivot late last year. But 'roughly flat' is great compared to the Nasdaq Composite, another hedge against inflation, which plunged 5.2 percent today and is down 28 percent from its peak in November."
According to SchiffGold.com, gold demand surged to kick off the year, up 34 percent year-on-year in the first quarter of 2022.
The total demand came in at 1,234 tons in the first quarter, which was the highest quarterly demand since the fourth quarter of 2018 as per the World Gold Council's Gold Demand Trends report. Demand in the first quarter of this year was 19 percent above the five-year average.
A lot of experts have started to turn to invest in precious metals due to inflation woes and threats of a great "financial" reset.
During the Sept. 18 edition of "Situation Update" podcast, Health Ranger Mike Adams advised people to invest in physical things such as gold and silver in case the "music stops."
"I do not want to have any cash in the banks when the music stops. We're going to lose all that cash. The bank will give it back to you slowly over time as the dollar just collapses in value. So basically, it's gone," he pointed out.
Visit GoldReport.news for more news related to how gold is doing in the market nowadays.
Listen to the Health Ranger Mike Adams talk about how a surge in demand for physical metals causes an increase in retail sales.
This video is from the Health Ranger Report channel on Brighteon.com.
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