The Fed Will Press the ‘Panic Button’ Through Thanksgiving, The Pivotal Monetary Policy – Frank Holmes
On Wednesday, President Joe Biden announced new programs to tackle climate change, including $2.3 billion to help communities retrofit buildings and expand flood control. In fact, governments and companies around the world are adopting ESG (Environmental and Social Governance) policies to deal with climate change concerns.
However, the “emotional” response to climate change has dampened economic growth and caused inflation, said Frank Holmes, CEO of US Global Investors and CEO of HIVE Blockchain.
“Climate change is basically causing inflation,” Holmes said. “Many of [inflation] It has to do with energy inflation in Europe, with the panicked nuclear shutdowns in Spain and Germany, and the taxation of cars and trucks.”
Holmes, who correctly predicted a market boom in 2020, predicts that by Thanksgiving, the Federal Reserve will reverse course to tighten monetary policy and lower interest rates.
Talk to David Lane, broadcaster and producer at Kitco News.
ESG and climate change
Holmes suggested that ESG’s ill-considered policies are causing supply shortages and more money printing, as governments seek capital for green energy schemes. This in turn leads to inflation.
Using the recent political turmoil in Sri Lanka as an example, he said, “They have imposed organic food everywhere in Sri Lanka, and they have brought about a 20 to 30 percent drop in production. Inflation has crossed the ceiling, and there are already huge riots in the streets.”
Last April, Sri Lanka’s government banned synthetic fertilizers and pesticides and ordered two million farmers in the country to switch to organic. Domestic rice production fell by 20 percent, and the price of rice rose by 50 percent.
Holmes added that markets are sensitive to rising Fed rates due to climate regulations.
“Climate change regulations are not out of sync,” he said. “It’s just panic buttons being pushed all over the place…these regulations are suffocating all over the world.”
There have been protests all over the world over price hikes and cost-of-living concerns. Holmes said civil unrest could prompt the Fed to cut interest rates.
“All we have to do is have a big protest like it’s happening in Europe…There is a trend that’s happening in countries around the world,” he explained.
He predicted that “by Thanksgiving,” the Fed would press the “panic button” and ease its monetary policy.
Holmes tracks the Producers Manufacturing Index (PMI), which he said is a leading indicator of overall economic health.
“The PMI is shrinking globally,” he said. “If the world [economy] The constriction began suddenly, the panic buttons would go off and there would be an open spigot for further printing of money.”
To see Holmes’ view of gold, watch the video above.
Follow David Lin on Twitter: @davidlin_TV (https://twitter.com/davidlin_TV)
Follow Kitco News on Twitter: @KitcoNewsNOW (https://twitter.com/KitcoNewsNOW)
Disclaimer: The opinions expressed in this article are those of the author and may not reflect the views of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; However, Kitco Metals Inc. cannot. Nor does the author guarantee this accuracy. This article is for informational purposes only. It is not a solicitation to conduct any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. does not accept The author of this article will be liable for losses and/or damages arising from the use of this publication.