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).
In case you didn’t hear in May, the Fed all but telegraphed a 50 basis point move in June and emphatically wasn’t considering a raise of 75. So what did they do yesterday, raise 75 basis points. (More unrestrained laughing) Forget following the data, how about maintaining any shred of credibility. Everyone, except the smartest, unelected people in the room, saw QE needed to end and interest rates needed to go up LAST YEAR.
Now, we are truly running backwards and not missing the many potholes out there. Gas prices (we were energy independent) baby formula flown in (really..?) I could go on, but where does the buck stop? Not with Biden, certainly not with Powell and this time it is different. Yet the Fed “fine tunes” our economy and the resulting sound in just plain flat.
Make no mistake, Cash is King. As debt levels are higher than ever, corporate and personal, if defaults start, and they will, the only issue is how much will the cascading effect harm us? No academic playbook, CNBC-talking head or economist with 15 degrees knows how stocks are to be valued at present. Unless you were around during the Paul Volcker-led Federal Reserve, shut up. You know nothing. You weren’t there and all the statistics, back testing or gobblygook you spew has no credibility. Just like the Fed.
Good Luck, Good Night and keep your money close to your person. There will be time to invest, just not now when uncertainty reigns supreme.