Record Stock And Housing Prices Mean The
Fed’s Past Four Years Of “Kamikaze” Money Printing Is Starting To Flood The Market And Create A Tidal Wave Of Inflation….
The Federal Reserve’s printing press continues to shell out new dollars at an alarming $85 billion per month, diluting your life-savings.
At that pace it will take only 10 months to print $850 billion. That’s a shocking rate of speed when you consider it took 95 years to print the first $800 billion.
(That’s why we follow a strategy, based on expert analysis, to protect and grow wealth no matter how much money they print. You can review it here.)
It took nearly 100 years for the Federal Reserve to print the first $800 billion. Now the Federal Reserve is set to print $850 billion every 10 months.
But this isn’t the first time the Federal Reserve’s printing press has been firing on all cylinders.
In 2008, it took just 3 months for the Federal Reserve to double the money supply to $1.6 trillion.
And by 2011 the money supply had pushed passed $2.4 trillion.
So with all the money printing, one would expect inflation to already be flying off the rails.
But is it really? Yes and no.
Today, you can see inflation in the price of gas, rising food costs, and a stock market pushing record highs.
But where is the huge rise in the cost of living some have been predicting?
The answer is as simple as a kink in a garden hose.
How a Kink Stopped Inflation… For Now
Think of a garden hose. When you turn the water on, it flows down the hose until eventually pouring out the nozzle.
Even if you turn the hose off, the water you released will make it out of the hose one way or another. It will not reverse course and head back up the hose.
But if before the water exits the hose, it runs into a kink, the water will sit still waiting for the kink to be removed.
That’s exactly what inflation has been doing the last few years. Sitting still and waiting.
Here’s how it happened…
The Federal Reserve first printed $500 billion in 2008 to buy up bad mortgages from the banks.
This was a great deal for the banks. They dumped their mistakes onto the Fed and were rewarded with cold hard cash for the pleasure.
The hope was that the banks would then lend this money out, letting it filter out to the economy.
(And once that happens, inflation starts.)
But the banks didn’t lend out the cash.
They saw millions of Americans out of work with damaged credit scores and decided to sit on it.
So instead of the money flowing its way into the economy and creating inflation, it just sits there, like water sitting behind a kink in a hose waiting to be set free.
That’s why the Fed decided to try something different with the latest round of money printing, “QE3.”
QE3 is All About Removing the Kink
When the Federal Reserve first decided to print money for bad mortgages, they made $500 billion the limit. They made no promises about buying more mortgages after that money was spent.
Well that just helped to convince banks to stop lending.
So for this latest round of money printing, the Fed is trying to lure the banks back into the mortgage business with an open-ended promise.
The Fed has promised to buy $40 billion worth of Mortgage Backed Securities from the banks each and every month… indefinitely, until the economy recovers and people are put back to work.
Mainstream pundits have coined this “QE to Infinity and Beyond.”
This gives banks full confidence that they can lend to home buyers, then immediately turn around and sell these mortgages to the Federal Reserve, who is conveniently in the market for $40 billion dollars worth of mortgages each and every month.
While some think this is good policy, we seriously disagree.
This policy removes the kink from the hose and threatens to unleash inflation into the economy.
In fact, signs show it’s already working…
Have You Checked Your Local Home Values Lately?
If home prices in your town are anything like the rest of the nation, you should be seeing an uptick. For example,
- In Manhattan, where the big bankers live and you’d expect to see inflation first, condo developers are raising the price of new units twice a month to keep up with demand.
- Southern California, which was hit hard by the housing bubble, just experienced the highest number of January home sales in 6 years. And the median price paid for a home was up 23.5% year over year.
- Across the nation, median single-family home prices are up 10% year over year, the strongest increase since 2005.
The Federal Reserve is hoping that increased home prices will make people feel wealthy again and encourage them to spend. They may even be hoping people will return to extracting equity from their homes to spend on new cars and vacations.
Peter Schiff, CEO of Euro Pacific Capital and one of the few to predict the financial crisis, refers to what the Fed is doing as “Kamikaze monetary policy.”
They print obscene amounts of money and give it to bankers to distribute through the economy, creating massive inflation along the way – all in the hopes that it will fix the economy.
Whatever their intentions, the end result could be disaster. And…
This May Be Your Last Chance
to Prepare for Rising Inflation
The kink in the hose is coming undone, and the inflation is starting to flow through. First to the housing sector, next to consumer prices.
The Elevation Group has been preparing for this for years.
We’ve created more than a dozen video strategy sessions with financial experts who saw this crisis coming years in advance, including gold and silver experts, real estate visionaries, and financial advisors to the ultra-wealthy.
We even brought in an expert who lived through Chile’s hyperinflation of the 1970’s to help us learn the best investment moves you can make before inflation really kicks in.
One gem he taught was that while high inflation can bring financial devastation for most, it can also mean unprecedented opportunity for a few.
And what separates one group from the other is knowledge. It comes down to, “Do you understand what is happening and do you know how to turn it into opportunity?”
During high inflation and hyperinflation, that question is more important than ever.
The Elevation Group can teach you what’s happening, why it’s happening, and how to turn it into an incredible opportunity to grow wealth.
To learn more about preparing for inflation, hyperinflation, and growing wealth during these strange times, come see what we have to say:
Find Guidance on Prospering During High Inflation Here
Your Partner in Prosperity,
The EVG Research Team