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June 6, 2019 | ‘Free Lunch’ to the Rescue!

Rick Ackerman

Rick Ackerman is the editor of Rick’s Picks, an online service geared to traders of stocks, options, index futures and commodities. His detailed trading strategies have appeared since the early 1990s in Black Box Forecasts, a newsletter he founded that originally was geared to professional option traders. Barron’s once labeled him an “intrepid trader” in a headline that alluded to his key role in solving a notorious pill-tampering case. He received a $200,000 reward when a conviction resulted, and the story was retold on TV’s FBI: The Untold Story. His professional background includes 12 years as a market maker in the pits of the Pacific Coast Exchange, three as an investigator with renowned San Francisco private eye Hal Lipset, seven as a reporter and newspaper editor, three as a columnist for the Sunday San Francisco Examiner, and two decades as a contributor to publications ranging from Barron’s to The Antiquarian Bookman to Fleet Street Letter and Utne Reader.

Trump needn’t have wheedled the Fed about juicing the money supply, since the banksters, ever eager to ride to the rescue — of themselves — would have done it anyway. The alchemists at the central bank have once again begun to “manage” our “expectations” with all the subtlety of a carnival barker about to spin a Big Six wheel. Their loyal spinmeisters at The Wall Street Journal gave this latest feint toward QE a boost Thursday with the headline Fed Begins Debate on Whether to Cut Rate as Soon as June.  Debate, my ass. To merely hint of a rate cut is to commit to one irrevocably, since anything less would — heaven forbid! — disappoint investors.

The policy debate ostensibly will pivot on whether ‘trade tensions’ warrant a shift toward easing. These are the very same tensions we’ve been reading about for nearly a year, and they were of such little concern as recently as a month ago that Fed chief Powell played down the possibility of a rate cut this summer. We knew better. Although the eggheads at the Fed would have us believe they use sophisticated tools to shape monetary policy, they are guided more by the stock market’s ups and downs than by anything else. Thus did the Dow’s 700-point decline earlier in the week evidently convince them it was time to intensify the managing of our expectations. We all know we are being played, but because the outcome is perceived as a win for everyone, the QE con cannot but work. We might ask: Who actually wins when the Fed expands its balance sheet by purchasing public debt? Only an economic imbecile could believe that this epic charade can continue to provide us all with free lunch more or less indefinitely.

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June 6th, 2019

Posted In: Rick's Picks

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