Interest rates have finally risen from their artificial lows, giving savers ADIATS (A Different Investment Alternative To Stocks) and thus a reward to being prudent in managing their fiscal affairs, unlike the Federal Government. Ever wonder why politicians clamor for low interest rates..?
Well, haven’t the last two weeks been interesting? From Silvergate, Silicon Valley, and Signature Bank all failing (must be an “S” thing), throw in Credit Suisse across the pond getting nationalized (for all intents and purposes), then a run on select US regional banks, add in a dash of moral hazard (fully insuring all depositors above the FDIC limit of $250k) and a 1/4 point rise in interest rates and what has changed? Nothing.
What’s not to like? Blue Skies, Gentle Waves, A Beach 🙂 However, that was most certainly not, 2022. In fact, last year, except for Cash, every major asset class I can think of got hammered. No matter where you went, nothing worked.
“The legend lives on from the Chippewa on down of the big lake they call Gitchee Gumee…” so begins the eponymous ballad by Gordon Lightfoot about the Edmund Fitzgerald.
The unelected entity and purveyor of chaos, better known as The Federal Reserve, will issue its latest edicts today and the guardian of the dual mandate of 2% Inflation and Full Employment is brewing up, nothing short of a disaster.
A recent article in the WSJ espouses the virtues and foibles of backward running. Great in concept, but difficult to pull off, once, let alone constantly. Kinda reminds me of the Federal Reserve and their attempt to execute their dual mandate (full employment and 2% inflation (unrestrained laughing).
Is this the year we transition from pandemic to endemic..? Let’s hope so, otherwise the fatigue all things Covid-19-related will trudge onward, unfortunately. In the interim, a quick look back at 2021 saw the Grand Slam in pursuing the asset class, Ether.
Since the Fed is keeping emergency pandemic-level interest rates on the floor, with no end game in sight, you are seeing commodity prices skyrocket. But it’s all transitory, so says the Fed. Have you tried to buy a house lately? Or what about your trip to get gas? Last, how is that trip to the grocery store going? Do you think those prices are transitory? Didn’t think so.
Ah yes; So starts the live version of the Three Doors Down song, in case you travel on Delta. A great tune, heading down the runway. Anyway, I digress. In case you have not heard of DeFi, (Decentralized Finance) it is fast becoming a silent, but booming concept. Simply equate blockchain with DeFi and that is a quick example of what I am describing.
I purposely waited some time, before I penned the 2021 inaugural GAZBIT, to understand the changes that were and are occurring, once the Senate results in Georgia became official on January 6th, giving Democrats de-facto control of the White House, House and Senate. Since January 20th, what have I learned..? Simply, the pendulum swings back the other way and nothing changes.
