The Federal Reserve’s attempt to control inflation will be disastrous

Anthony “Pomp” Pompliano, Founder of Morgan Creekbelieves the Federal Reserve’s attempt to control inflation will end in disaster … in favor of Bitcoin.

The FED is currently working on an annual policy review: it appears that the institution You do not plan to raise your interest rates until inflation reaches 2%.. In a letter dated August 5, entitled “The Wizards of the Federal Reserve” Pompliano said the Federal Reserve’s willingness to raise inflation will end badly.

Morgan Creek founder stated that the nature of the US economy defines it “Almost impossible to manipulate with lighting control”. additionally The central bank has a poor track record with inflation targets over the yearswho only “achieved +/- 10% of this target 3 in the last 10 years”.

The Federal Reserve’s attempt to control inflation will be disastrous
The Federal Reserve’s attempt to control inflation will be disastrous

In their opinion, therefore, it is possible that the Fed could exceed its inflation target. make the economy worse:

“If that happened, the Federal Reserve would accelerate inflation exactly when it was supposed to keep it in check. I wish I could argue that this scenario seems totally unlikely, but I think it will. “

Everything but the dollar

Pompliano advised investors not to hoard cash The actions of the Federal Reserve will lead to a sharp devaluation of the dollar. In July, the ICE index in US dollars, which measures the performance of the US currency against its 6 main opponents, fell by 3.9%: from 97.2 to 93.3.

In particular, Pompliano said:

“I assume that the prices for real estate, gold, stocks and Bitcoin will rise much faster than before. Bitcoin will be the main winner in this situation because it is the most volatile good.”

USA: soaring prices during the pandemic

Although the official inflation rate is currently around 1%, Consumer prices in the US are already rising. According to a study by the Office for Economic Analysis, the price of meat rose by almost 11% between February and June; especially beef, which has seen a 20% increase.

This price hike is a very difficult time for millions of American citizens. when the government cut the $ 600 weekly unemployment benefit on July 31This means that more than 30 million Americans are receiving just $ 1,284 from the state, instead of $ 3,684.

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