Real Macro Chessboard: Yield Curves, Wall Street, and Famine - FED 87

In this episode of the Fed Watch podcast, I cover topics we were unable to cover on the weekly livestream. I go back over the importance of the Sarah Bloom Raskin withdrawal, what the Fed is thinking by signaling hawkish policy so aggressively, and do a deep dive into the emerging food crisis that could result in a continental scale famine.

Fed Watch is a podcast for people interested in central bank current events and how Bitcoin will integrate or replace aspects of the aging financial system. To understand how bitcoin will become global money, we must first understand what’s happening now.

I mentioned Sarah Bloom Raskin on the previous episode but here I go back over that thread and try to make it crystal clear what I think her withdrawal of her nomination tells us about the real power politics at play.

Raskin is a progressive globalist who believed in using the central bank to further a Davos agenda. It didn’t work. I think it makes the distinction between Team Fed, including Powell and Wall St. versus Davos globalists (Dems, Neocons, and European project people) perfectly clear. 

Next, I introduce the concept of the Fed credibly promising to be irresponsible, this time on the hawkish side. In 1998, Nobel Prize winning economist Paul Krugman, said of the Bank of Japan’s inability to stimulate out of a stagnant economy what they needed to “credibly promise to be irresponsible”; go big or go home. The Federal Reserve is now attempting to be irresponsible in the reverse direction.

The Fed will come right out and say that their policy works through inflation expectations. Typically, they talk about how much QE they will do, in an attempt raise expectations of inflation, that makes people act as if inflation were higher, manifesting that inflation in the future. Right now, it seems as if they are trying the reverse.

Ask yourself, how would the Fed lower inflation expectations? They have to act hawkish, and talk about raising interest rates and QT. That is what we are seeing now. Everyone sees the yield curve inversions happening. They know the world is sliding into war and deglobalization, two things that make people expect higher prices in the future. They have to attack those stubborn inflation expectations with very hawkish rhetoric in order to tame those expectations back to “normal”.

In this section, I walk through the images below to explain the yield curve, the inversions right now, and what they mean. I’m not sure if there will be a video version of this episode on Bitcoin Magazine’s YT channel.

In the last section of the podcast, read through an article with the headline: War in Ukraine sparks concerns over worldwide food shortages from France 24. In it they point to the wheat shortage from the war in Ukraine that is already causing food shortages in North Africa.

The UN Food and Agriculture Organization (FAO) estimates that an additional 8-13 million people worldwide face undernourishment if food exports from Ukraine and Russia are stopped permanently.

The article is good at summarizing one aspect of the looming food crisis, a shortage of wheat. What they do not even mention is the shortage of fertilizer. Both of these things together threaten a continental scale famine where that number of 8-13 million new people facing hunger is probably understated by 10x.

That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, and REVIEW on iTunes, and SHARE!