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Trader/analyst Gregory Mannarino says Fed Head Janet Yellen “lied” when she spoke last week about the “mystery” of not hitting the Fed’s inflation targets. Mannarino explains, “It’s no mystery. You have to choke or laugh or barf when you hear her say something like that, and no one checks her on that. It’s an absolute lie, an incredible lie . . . the economy is dead in the water. It’s Economics 101. That’s why she can’t create inflation. It’s no mystery. The cash isn’t moving. The cash is not moving because the economy is going nowhere. She can perpetuate the lie because she has managed to inflate the stock market. The average person looks at the stock market and says the stock market is going up. So, that means our economy is doing well. It’s an incredible thing, but it’s just not the truth. This is how they can twist people’s minds. By keeping the market elevated, it is an illusion. The illusion becomes real to the uninformed.”
Mannarino says if rates go higher, that will be bad for housing prices. Mannarino explains, “If Yellen is successful and the yield curve starts to normalize, because right now it’s flat, that would put pressure on housing, and cash would come out of housing. You would lose the wealth effect. You can get a selloff in bonds, a selloff in the stock market, and this could turn into something very, very ugly, which it’s going to do one way or the other. Again, if Janet Yellen is successful, the cost of money or the cost of cash will rise. What does that mean? That means the dollar, theoretically, should get stronger. Multinational companies’ earnings are going to suffer. That will put more pressure on the stock market. . . . It’s kind of unusual that the Fed is choosing right now to normalize their balance sheet. The Fed is talking about getting rid of those mortgage-backed securities right now at the top of a housing market bubble. They know it’s a bubble, and they re-inflated that bubble on purpose.”
Mannarino also warns that bills for storm damage and bankrupt states are piling up. U.S. territory Puerto Rico was destroyed by a hurricane and is bankrupt. States like Illinois, Pennsylvania and Ohio are also having debt problems. Mannarino contends, “This is how they are going to kill the currency. The Fed is going to be forced to print more cash out of thin air and loan them money, whatever it’s going to be, and then the currency dissolves. We’ve seen this before. . . . At some point, we are going to face an absolute and complete meltdown of the system. The debt based economic model is fraudulent. It’s a Ponzi scheme. The federal government is going to be asked to do something, and that will kill the currency, and we are going to get hyperinflation. That’s when the cash is going to start to move.”
In closing, Mannarino says, “The central banks are going to take everything. You will be a serf at some particular time, serving your masters like you do already. I think we are going to be experiencing a new middle age–period.”
Join Greg Hunter as he goes One-on-One with Gregory Mannarino, founder of TradersChoice.net.