From an economic standpoint the Biden Administration defies common sense. More significantly, its policies are very anti-small business.

At this point, the Federal Reserve should be increasing, in a significant way, interest rates for only in that way can inflation be curtailed. The officially reported inflation rate is currently 6.2%. I believe the unofficial real inflation rate is in the double digits.  Unfortunately, because rates have been kept at near zero the inevitable increases will have to be large and often which will put the equity and real estate markets in free-fall. 

In support of this position I studied the actions/policies of three individuals:

Wynken – Jerome Powell, current Head of the Federal Reserve 

Wynken, affectionately called Jay by his friends, has been serving as Fed chief since February 2018. He was appointed by then-President Trump. His term ends in February 2022. The goals of the Federal Reserve are simple: that it ensures a stable currency and low inflation through managed monetary policy. The Fed has been doing anything but that during Powell’s tenure.

Before the pandemic hit the economy Powell should have been increasing interest rates. The current Fed Funds rate is 0.25% (essentially zero). It has been at this level since April 2020. When Powell took over the Fed, the FF rate was 1.42% as the economy grew under the Trump tax cuts and regulation dismemberment, Powell raised the rate to 2.40% in July 2019. Then, the pandemic hit and in March of 2020 the rate was decreased to 1.25% and in April ’20 dropped to .25%.

In addition, to the historically low FF rate the Fed began to purchase Treasury debt and agency mortgage-backed securities, under a policy termed Quantitative Easing. QE is a nice, ambiguous term for a policy that as of November 2nd of this year had totaled an incredible $8.57 trillion.  Wynken, only this month, began to “taper” the monthly pace of its asset purchases – reducing purchases of Treasury debt by $10 billion and agency mortgage-backed securities by $5 billion.

Like asking the arsonist to put out the fire, Powell has painted the Fed into a corner. Inflation is being pulled forward by an inordinate amount of money being pumped into the economy (more on that in the ‘Nod’ comments) and the only way to ease it is by raising interest rates while eliminating the QE policy.

Wynken is up for reappointment in February. His major competitor, Lael Brainard, is much more dove-ish and is thought to have no qualms about having a sustained high inflation rate – bad news for the low and middle class. Problem is, if this scenario continues inflation’s even uglier sibling, stagflation will come into play.

Powell’s net worth is estimated at $20-30 million.

Blinken – Antony Blinken, current Secretary of State

At 59, Blinken has essentially spent his entire career as a bureaucrat or government appointee. He has used his government contacts well and in 2017 co-founded WestExec Advisors, a consultancy specializing in advising Silicon Valley clients on developing and sustaining relationships and contracts with the Department of Defense. 

Blinken is also a partner in Pine Island Captial Partners, a managed investment fund specializing in investments in the defense, government service, and aerospace industries, Founding partner, John Thain, former CEO at Merrill Lynch, chose Blinken because of his “access, network, expertise”.

Tony Blinken is a globalist. His philosophy regarding the U.S.’s role is one of alliance even at the cost of capitulation. Thus far, Blinken botched the Afghan withdrawal, and his initial meeting with Chinese counterparts, in February, was a complete humiliation.

Today, Blinken began a three-nation tour in Africa. Arriving in Kenya, and planning trips to Nigeria and Senegal. Ethiopia, which is currently in a civil war threatens to destabilize the sub-Saharan region. Unfortunately, there is very little the U.S. can do to stop the crisis. Blinkin’s advice, “I strongly urge Americans to leave Ethiopia as soon as possible.”

We have yet to see any meaningful push-back on the recent and very aggressive Chinese geopolitical maneuvers or Russian aggression. Xi told Biden, “If you play with fire, you’ll get burnt” regarding Taiwan and Russia is currently in a massive arms buildup on its border with Ukraine. So far, no response from the State Dept.

Blinken’s net worth is estimated at over $10 million.

Nod – Joe Biden, U.S. President

What can one say? Being filmed nodding off during the Glasgow Summit on Global Warming, which he described as “my Administration’s most crucial and important issue”, is the image of Nod. Unfortunately, two of the world’s worst and largest carbon emitters: China and Russia did not attend the Summit, and India and Brazil would not commit to any real changes to their current emissions levels.

Biden seems to be oblivious to the main issues impacting the U.S. The Build Back Better slogan is missing the mark by a wide margin and if enacted will have placed the Biden administration’s tally on fiscal spending at over $7 trillion. That, coupled with the current Federal Reserve’s wild monetary policies will place the U.S. in a very precarious financial situation. At the moment the Administration is trying to put a lid on all the bad news. Trying to sell the premise that Build Back Better will cost nothing and actually bring down inflation is preposterous.

Make no mistake, China is at war with the U.S. but Biden doesn’t recognize it or doesn’t want to admit it due to the large U.S. corporate investment within China. For example, Biden hasn’t mentioned to Xi China’s role in concocting and spreading the COVID pandemic and its impact on the world, not to mention the pandemic’s cost in terms of treasure and lives (more American lives were lost to COVID than were lost during WWII).

After 11 months in office, Biden’s approval ratings are in the tank. He is currently polling in the low 30s. It is deserved.

Biden’s net worth is estimated at $8 million. *However, he earned over $17 million from 2016-20, his four years out of office. It’s another Biden mystery.