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What the Fed Rate Cut Means to You: Part V

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Chair Powell answers reporters’ questions at the FOMC press conference on September 18, 2024. Photo courtesy of the Federal Reserve.

When you look at the abysmal track record of the Fed when it begins rate cuts of 50 basis points, it’s like boating in the fog. It doesn’t matter if you have the best navigational equipment. It’s not fun.

Having been stuck in thick fog myself, I can tell you that minutes feel like hours, and hours feel like days. Sometimes, when it lifts, you’re good to go like we were this summer off Castle Hill. Other times, like when I was a kid, we dropped anchor to wait it out, and when the fog lifted, we found out that we were in a harbor that wasn’t even ours.

Look at the record of the Fed when it’s in the fog, trying to find its way home.

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So much is riding on the Fed’s imperfect decision makers getting it right, that things are bound to break down. Instead, America needs to keep it simple and use a gold standard—a set of rules Americans can rely on just like they know there’s 12-inches in a foot. It could only improve. Just take a look at the track record for the Fed “protecting” the dollar.

Let’s go back in the way back machine. The attraction of America was freedom. Freedom, not equity and inclusion. In speaking with a client yesterday, he told me how many opportunities he had at the beginning of his career in manufacturing. There was freedom, not equality.

You could pivot and manufacture what was in demand. His parents, he told me, emigrated to America because of one word: Freedom. Today, our manufacturing base is basically in China, all in the name of globalism, and the elite tell us we’re the problem.

Action Line: When you let the elite control your country, understand they’re navigating their own boat in the fog. We’re the ones left with the mess if they end up on the rocks. Invest accordingly. When you’re ready to talk, let’s talk, but only if you’re serious.

Read the entire series here.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.

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