While the Biden administration has been somewhat confused on what the definition of a recession is, Joe Biden suggested that inflation is up only an “inch.” In an effort to fight inflation, the Biden administration promoted the Federal Reserve and other central banks raising their interest rates. Again, this was to fight inflation. But according to the United Nations Conference on Trade and Development (UNCTAD), for every percentage point raised, the economic output of the country lowers.
Releasing a statement about the findings, UNCTAD Secretary-General Rebeca Grynspan said, “There’s still time to step back from the edge of recession. We have the tools to calm inflation and support all vulnerable groups. But the current course of action is hurting the most vulnerable, especially in developing countries, and risks tipping the world into a global recession.”
Economist Peter Schiff mocked the central banks and criticized Bank of England Governor Andrew Bailey for returning to outdated policies on inflation. He declared on his podcast, “The Bank of England folded. They pivoted. They decided to launch a new QE program. Remember, yesterday, they were committed to quantitative tightening. Now they said they will buy whatever it takes. They have committed to another QE infinity in order to prop up the bond market. They now have to print British pounds to buy these gilts. So, instead of fighting inflation, which yesterday was public enemy number one – it had to be brought down at any cost – now, all of a sudden, when you see the cost, well, forget about that. We’re now going to create inflation.”
Although Peter Schiff lashed out at the Bank of England, he warned that it will soon happen in the United States. “Is the Federal Reserve, when confronted with the same situation, will they make a different choice than the Bank of England? Does the Federal Reserve have more integrity? Are these guys willing to allow a financial crisis? Because the same thing is going to happen here. We’ve got all sorts of leverage in our markets. We’ve got a bigger debt bubble than the British. It’s just that the day of reckoning for us is not going to come as early as it did for them because the dollar is going up.”
Peter Schiff ended his warning, pointing to the Federal Reserve Chairman Jerome Powell. “I don’t care how much he wants to bark about being tough on inflation. At the end of the day, he will not bite. The Fed is a paper tiger, and it will fold just as quickly as the Bank of England when they’re confronted with an actual crisis.”
On Monday, the Bank of England bought £22mn in bonds. A rates strategist for UBS said the move showed promise. “This is the BoE sending a message that if it doesn’t look like we’re still in the middle of a crisis.”
This piece was written by Jeremy Porter on October 3, 2022. It originally appeared on RedVoiceMedia.com and is used with permission.
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