Tag: Jackson Hole

The Fed’s 2% Inflation to Lower Wage Rates: Micromanaging employers and causing quite a mess

There is a dirty little secret that the Federal Reserve has about its role in mass society that needs to be discussed in relation to interest rates and what it considers managed inflation.  The Fed recently met at its annual Jackson Hole meeting, and it reminded me of many things, particularly the time when my grandkids wanted chicken nuggets from McDonald’s and their dining room was closed.  We were in my RV, so the only way to place an order and collect the food was to use the drive-thru window, which I barely fit through.  The McDonald’s in Jackson Hole is very close to where the Fed meets against the backdrop of the Teton mountains.  For a tourist town with one of the largest concentrations of wealth in the world, it’s a small McDonald’s with a pretty small parking lot.  Certainly not RV friendly.  However, I managed to make it work with less than an inch on all sides of my vehicle, and it’s a story that has gained a lot of popularity in my family.  “Remember that time grandpa did this?”  And everyone says, “Which one?” because there are a lot of things to talk about.  The town itself is one of my favorites, and I can understand why all the bank presidents who are members of the Fed want to meet there to discuss monetary policy.  It’s a really good place to go and is America’s version of Geneva, Switzerland.  I think the Tetons are better, though.  So after the Fed meeting there, Jerome Powell indicated he was going to do what I said he was going to have to do, and what J.P. Morgan had been pressing for, along with President Trump, and that was the Fed was going to lower interest rates.  Not happily, but because they have to.  The economy is too good to hide phony interest rate profits for the banks behind artificial inflation numbers meant to frighten the world away from Trump’s presidency. 

However, there is another issue at play that we need to address regarding employment.  The Fed believes that in managing money, it must bake in 2% inflation per year because that is the only way to offset the erosion of wages that employers provide to employees, which dilutes the actual value of labor.  Because the Fed believes, which is one of the reasons for its existence, that employers will not incur the hard cost of paying employees less for their labor as they age and become less valuable.  Therefore, the Fed believes that it must step in and manage the economy because employers won’t do so on their own.  Often, when a company gets out of step with its cost structure, it has an obligation to reduce its costs, either through a reduction in force or wage cuts.  However, most employers are hesitant to lose their legacy talent and invest a significant amount of money in retaining them, when in reality, they should consider letting them go on the open market and replace them with cheaper and younger workers.  The NFL has to do this all the time with salary caps, which are imposed on teams to keep them fresh and relevant.  If a player wants to leave a team for more money, then that team can turn to free agency to replace that player.  If the market wants to pay a lot for that experienced player, they certainly can, but there is a salary cap, so that team won’t be able to pay a lot to other workers as well. 

That’s why we should operate in America with some gold standard, because value has to be protected. Instead of the Fed having the temptation to print more money, it would micromanage the economy with continuous infusions of cash, ultimately diminishing its buying power and hiding the inflation it creates in the process.  And try to hide it behind other economic conditions as a justification, which had worked until Trump came along and called the Fed’s bluff.  And because the Fed believes that free market pressures won’t manage the economy effectively, they have baked into all their assumptions about economic flow that they must micromanage employers who won’t trim their fat with inflated wage rates at their companies, as they fear losing talent to their competition.  So, the Fed bakes 2% inflation into everything.  That’s why, when reviews are conducted with employees, a standard minimum of 2% is required to maintain your wage value at the same level as the previous year.  The trick is that as you get older, you actually lose buying power in most cases because inflation eats up whatever increases you manage to get for yourself.  The goal is for Americans to earn less over their working years, not more, because the actual value of labor must be managed by the Fed, which introduces all kinds of problems, as it’s not really employers who are the problem.  That is just the excuse that the Fed applies to cover a lot of liberal politics, for which they are prone.  Labor unions, for instance, are very guilty of propping up wage rates that are artificially too high, which then feeds the Fed’s argument for mass micromanagement of the economy with incremental inflation to let people believe they are being paid a certain amount on paper, but in truth, the money is worth a lot less.  People don’t notice because it happens over time.  However, every three years, at a minimum, workers lose 6% of their buying power if they do not receive raises in their pay that are well above 2%.  To receive an actual 2% raise, employees would need to obtain a 4% raise with each yearly evaluation.  Which certainly isn’t the case for most people. 

Consider the problem at the McDonald’s in Jackson Hole that I mentioned, which had its drive-thru window closed due to the COVID-19 pandemic.  And the government was pushing for a minimum wage increase that inflated the real value for entry-level jobs, such as McDonald’s workers making $15 per hour, when the real value for their jobs is likely under $10.  When politicians interfere in the process of manipulating market values, the Fed must attempt to cover up the mess with interest rate hikes to conceal the inflation it creates, which often exceeds 2%.  Our goal with inflation should be zero, and if we held it to the gold standard, it would have to be.  These are the problems you get when you let pin-headed bureaucrats micromanage an economy with Marxist ideas instead of free market capitalism, and it’s a real problem.  So Jerome Powell knows all this and is reluctant to lower interest rates, even though all the parts of the economy that they usually hide behind at those Jackson Hole meetings are too good, forcing his hand.  So he’s not happy about it.  But a lot is coming that he won’t be pleased about.  There has been a significant amount of tampering that has impacted wage rates, and employers have not been the primary source of the issue.  It’s too much administrative mess that comes from the Fed, and short-term politicians who have caused all the problems.  McDonald’s workers, like the one in Jackson Hole, should not have employees making over $20 per hour.  Wal-Mart should not have employees making $20 to $25 per hour because all other labor has had to increase their wage rates to obtain workers.  But the money is all on paper.  People are not actually making those actual wage rates because the Fed has had to hide the impact through inflation.  And now they are being forced to lower interest rates, which will expose the whole mess.  Although the meeting in Jackson Hole might have been very scenic, it wasn’t enjoyable.  There will be a lot more to happen with monetary policy in the coming months.  And the Fed is going to lose a lot more control, as they very well should. 

Rich Hoffman

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The Fed’s Plans for a CBDC: It’s the entire reason for the Biden presidency, and they are close

I love Jackson Hole, Wyoming; I spent some time there recently with my family.  It’s where the Fed gets together with bankers from all over the world, it’s the bean counter version of Davos, and it’s something I have paid attention to for a long time.  It’s also where one of my favorite movies, Every Which Way You Can, was filled.  While there, I had to visit all the filming locations for the big fight at the movie’s end.  And it is there that my daughter and I like to get new cowboy hats; there is an exceptional store on the square that is fantastic.  But it is there that I wanted a hat because I wanted to think about the notion that much of the world’s problems are created through monetary policy, and it’s a reminder that Jackson Hole, as lovely as it is, brings out the most pretentious in these stiff bankers, and aligns them with all the horrendous out-of-touchness that is typical at the World Economic Forum meetings in Davos.  Smart, stiff people suddenly surrounded by beautiful mountains who start to think of themselves as the gods from Mt. Olympus.  Then suddenly, they lose track of reality and become the kind of tyrants people scream “freedom” from.  But that doesn’t make Jackson, Wyoming, a bad place because people go there and create bad monetary policy.  I see it as a place of adventure, and during that most recent trip, I pulled my RV through the McDonald’s drive-thru to get my grandchildren some chicken nuggets before heading south into Utah for the next leg of our journey, which caused quite a stir.  They had never seen anybody do something like that, which maybe is the actual message. Perhaps they should because a bit of managed recklessness is essential to significant economies and avoids disastrous discussions about the Fed proposal of a CBDC (Central Bank Digital Currency)

Of course, the Fed wants to abuse its power, most institutions find those temptations too seductive, and there will never be a group of people who handles too much responsibility well.  That doesn’t mean you never have groups of people with massive responsibilities, it just means that you can never allow them to have too much power, and that is what all central bankers are looking for in the world, more security for them and less freedom for you.  It’s also why I say that the election fraud was so bad in 2020 because many financial forces aligned with the World Economic Forum are looking for stability that the Trump economy was set not to provide for them.  So they conspired together to commit the most significant election fraud in the history of the world, and they did it essentially to make a CBDC in America possible. (Central Bank Digital Currency) The Fed is already practicing Modern Monetary Theory, so it’s all on the table with a CBDC to control every aspect of our lives. That’s the plan and has been the plan coming up every August at these Fed meetings in Jackson Hole for a long time now. Suppose you know anything about those timid types who desire with all their hearts some centralized stability in global communism. In that case, you can understand why they cheat in elections, especially in 2020. They will do anything to win again and protect their worldview. ANYTHING!  The current status of Central Bank Digital Currency is that many central banks around the world are exploring the possibility of creating their digital currencies. The goal is to provide a secure and efficient way of conducting transactions while maintaining control over monetary policy. Some countries, such as China, have already begun testing their digital currencies. However, many questions and concerns still surround implementing CBDCs, including privacy, security, and financial stability. It will be interesting to see how this technology develops and how it will impact the global economic landscape in the future.

Joe Biden was put in place in 2020 over President Trump to establish a CBDC during his term.  The first term would set up the conditions; the second would get it done.  This is the one world currency discussed and why the World Economic Forum wants to go to a cashless society.  Most everything the radical leftists in the world, who now run many of these central banks complete with ESG scores as their primary drivers, is to impose a China model, communist-driven, CBDC into the American economy, which will then give complete control of governments over people by changing values of money with the push of the button.  This is why Biden’s radical communist party has no concern whatsoever about the debt and why Modern Monetary Theory, which they deny they know anything about, is such a lucrative strategy for them.  They can wipe away debt with the push of a button because the value is determined by those controlling money, not the actual production provided by economic activity.  And suppose it’s a one-world currency controlled by the influences of the World Economic Forum, which already controls the Federal Reserve in the United States. In that case, nothing can stop them from completely dominating the world’s money supply.  That is the end game that the Fed is talking about this year in Jackson Hole, Wyoming, as they look at the lovely mountains and sip lattes early in the morning as they watch elk cross the street.  Isn’t nature so beautiful?  It makes you want to impose ESG scores on banks to fulfill fake climate change criteria to advance the concept of a CBDC into a Liberal World Order. 

It is with a CBDC that the Biden administration hopes to disconnect people from their lives by turning them off entirely from economic activity.  If the only currency available is those controlled by corrupt centralized governments, people will have no choice but to capitulate.  That is how it is in China increasingly, and the Biden administration is drooling over the prospects in the United States.  They couldn’t quite get it done fast enough to be in Biden’s first term, so they plan to do it in the second if he lives long enough.  But that is why they want a brain-dead stooge in the White House.  For them, Kamala Harris will do just fine.  All she has to do is sign where they tell her to.  They could care less about anything else because if they control the money, they control all of society.  If you don’t like it, they don’t care.  They can turn you off at the gas pump with the flick of a button.  They can steal all your savings.  Take your home if you don’t vote how they want you to.  And life as we know it will then be controlled by the lunatics at Davos because of the Fed policies set at Jackson Hole every August, as they have been working toward this CBDC concept.  And yes, it’s every bit as bad and more than you can imagine.  Yet they think nobody will catch them on it until it’s too late, which has already blown up in their face.  That means that this year’s trip to Jackson Hole by the global bankers, especially those directly connected to the Fed, is to do damage control.  Not to present the status as much as how to keep it alive through this next election cycle and the threat to them of another Trump term.  Good for us, bad for them.  Very bad.

Rich Hoffman

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