WATERBOARDED: Rate Hikes On The TABLE, AGAIN!

PORTFOLIO UPDATE: Today’s letter is all about the incompetency of the Federal Reserve in stopping the inflationary pressures that are now visibly on the horizon. Before you get into it an into how I see gold reaching new 52-week highs later this year, make sure you’re on top of the following INFORMATION: In yesterday’s trading, Koios Beverage (CSE: KBEV & US: KBEVF) continued its unmatched rally, beginning with the news of their agreement with Walmart, the largest retailer ever, on the 27^th of February. We covered the company’s huge potential when it initially traded at CAD$0.20 in September of 2018, at which point it soared 425% and became a huge winner for us, and more recently at CAD$0.28.

Today, the price is CAD$0.54, which is 170% higher than our profile price.

The company just released a detailed corporate update. What I love is that management is right on point when it comes to prioritizing tasks. During the 1^st quarter, Koios secured supplier agreements with two of the largest retailers in the world, Walmart and GNC Stores. It added an additional 4,000 retail locations carrying its products across the United States.

Get this: purchase orders from February 1, 2019 through March 13, 2019 total more than CAD$734,876, excluding online revenue!

They’re relentless. In fact, Koios estimates that it will add an additional 2,500 retail locations carrying its products across the United States in Q2 of 2019.

Chris Miller and his team are on course to release an updated e-commerce and sales platform in May 2019, to service over 7,000 active clients. Once launched, customers from all over North America will be able to order any of the company’s products through Amazon Prime. That’s big, big news.

THE FIRE WILL NOT BE EXTINGUISHED BY THE CENTRAL BANK

No one is under the assumption that the Federal Reserve will raise interest rates anytime soon. Here’s the thing – if the central bank makes even one more mistake, Trump is going to devour them; expose them out in the open.

At last, they’re holding the hot potato in their hands, and the only one left to catch it is the U.S. economy, if the board of governors gets it wrong.

One thing the FED doesn’t know how to do is extinguish a fire. They’re experts at creating fires, fueling and growing them into the size of California wildfires – but they’re poor at putting them out.

Bernanke and Yellen have thrown matches, wood, gasoline, and coal into theirs, but they left Powell with the job of making sure the fire stays contained within the woods and doesn’t spread into urban areas. In other words, previous FED chairs have created a credit bubble and the current chair is left with the mess of keeping the house of cards from falling apart.

The previous chairmen have launched QE programs, lowered rates to zero, and bought mortgage-backed securities. They birthed a V-shaped recovery for the elite, but thus far it has not ended like the Dot.Com bubble did. Instead, the trauma of 2008 has made investors cautious and fearful. Investors head for the exits at the 1^st sign of trouble. They’ve become touchy and can’t stand pain.

The FED has countered this with the Powell Put, which is the FED’s prompt reaction to any correction, an act that is solely aimed at reassuring investors that the nanny hasn’t left for the day.

The problem is that this isn’t 2011 anymore, nor is this 2016, 2017, or even 2018. This is 2019, and the domestic U.S. economy is really maxing out by now. I mean, businesses can’t even find people to hire, and most of the skilled labor pool has been tapped.

The real issue is that there are millions who would love to apply for better-paying jobs, but they aren’t properly trained or do not live in the vIcinity of the employer. Globalism has made corporations look abroad for manpower, and the domiciled education base has suffered. Americans have been left for dead by the government, in terms of financial education and career opportunities. Employers looking for Americans to perform certain tasks are having a hard time filling the vacancies.

It means that employees are becoming more valuable for the first time in decades. Wages are climbing. I’ve surveyed large employers in ten leading industries – it’s tight out there, in general. Some areas of the country are definitely still depressed, but more and more zip codes are leaping out of the bad years.

The FED knows that this will lead to 2.4% official inflation:

Courtesy: Zerohedge.com

As you can see, even if GDP growth stays tamed, consumer prices are going to exponentially increase. But Powell isn’t that excited about the prospect of rate hikes to stave-off the pressures of money velocity. He saw what rate hikes did in December and the last thing he wants is to be branded as meddling with elections by scaring investors, because Trump will point the finger at HIM.

Most likely, even if inflation goes above the target 2%, the FED will let it run.

The market isn’t catching onto this yet, but central banks certainly are. They’re loading up on gold.

Yet, the market is still betting that the next one will be a rate cut, rather than a hike.

Take a look:

Courtesy: Zerohedge.com

The next rate decision to hike or to cut, whatever it ends up being, is going to be the most important in the past DECADE. If it goes the way I believe it will, opportunities to capitalize on the trajectory of certain assets will be tremendous.