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It is said that those who do not learn from history are bound to repeat it. Unfortunately, it would seem that this adage is all too applicable to today’s Federal Reserve.
Historically, the Federal Reserve has never been right on monetary policy and has a proven track record of getting it ‘wrong’ on inflation, time and time again!
Throughout the whole of 2021, the Federal Reserve played down the biggest year-on-year rise in inflation seen in more than four decades – characterizing the record spike as “transitory”.
And that wasn’t the first time.
Before that, it was the 1970s and early 1980s, when the Fed slowed down the pace of rate hikes too fast – only to see inflation surge once again. Had the Fed learned from the painful inflationary experience of the past, they would know that there are almost always “three waves of Inflation”.
We all make mistakes, but the Federal Reserve may be making a bigger one than most by prematurely declaring victory on inflation too soon.
This ultimately means that the Fed has removed all obstacles and cleared the path for Commodity prices to take off – presenting traders with “one of the greatest wealth creation opportunities the world has ever seen”.
Since the beginning of this year, a long list of leading Wall Street banks from Goldman Sachs, JPMorgan to Bank of America have been predicting that Commodities prices will hit new record highs in 2023. In recent days, that chorus has once again become louder with a growing list of financial institutions, advising clients to pile back into commodities now – ready for the next big leg higher!
Whichever way you look at it, one thing is clear. Jerome Powell and his colleagues at the Fed has given a green light to the Commodities Supercycle. That’s welcoming news for the bulls, but painful for bears and anyone sitting on the sidelines, who must now decide how much FOMO they can handle.
Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:
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