Dear Reader,
The Federal Reserve met Tuesday and Wednesday. Inflation hit 3.7% in September. Two of their own members voted to RAISE rates. Warsh said rates "aren't yet tight by his own account." And what did the Fed do? Nothing. They held.
Six years running above their own 2% target. September CPI jumped to 3.7% from 2.4% in February. Energy prices are up. The AI buildout is driving costs higher. And the Fed blinked.
Inside today's issue:
- The Fed's Split Vote: A 10-2 decision to hold. Two governors wanted to hike now. Markets are already pricing in three more quarter-point increases by mid-2027.
- The Inflation Math They Won't Show You: CPI at 3.7% means prices are still rising at nearly double the Fed's target. And that number doesn't capture what you pay at the grocery store or the gas pump.
- What Stagflation Looks Like: Rates high enough to crush borrowers. Inflation high enough to crush savers. Both sides of the squeeze tightening at once. My rich dad saw this in the 1970s. He told me exactly what to do.
- Larry Benedict on Oil: The governments of Saudi Arabia and Kuwait once hired our friend Larry Benedict. So did the banks that hold money for Exxon, Chevron, and Shell. For decades, he helped the most powerful players in oil grow their money. Now he's revealing his top oil strategy, adapted so ordinary folks can use it too. (Brownstone Research)
THE FED'S CONFESSION
CNN called it "patience." Bloomberg called it "prudent." The Wall Street Journal called it a "hawkish hold."
I call it a confession.
The Fed just told you, in plain language, that they cannot stop inflation. They hiked in September. Inflation got WORSE. Now they're holding. And the market is pricing in three more hikes before June 2027. Think about that. THREE MORE. After everything they've already done.
"Inflation remains elevated."
That is the Fed's entire explanation. Three words.
Two of the twelve voting members disagreed with the pause. Governor Lisa Cook and Cleveland Fed President Beth Hammack both voted to RAISE rates immediately. Hammack said it plainly earlier this month:
"With each passing month, persistently elevated inflation raises the risks of an inflationary mindset becoming entrenched in the economy."
She is right. That is exactly what happened in the 1970s. The Fed waited. Kept hoping inflation would fade. Instead it got into the bloodstream of the economy. By the time Paul Volcker fixed it in 1980, he had to hike to 20% to kill it. Twenty percent.
This time, the Iraq War drove prices. The Vietnam War before that. Today it is the Iran war. Same script. Different cast.
WHAT THE MAINSTREAM ISN'T TELLING YOU: 3.7% CPI is the official number. It is calculated by a formula the government has changed over a dozen times since 1980. Every change made inflation look smaller. If you measure it the way they did in 1980, prices are rising at twice that rate. You already know this. You feel it every time you fill your gas tank or buy groceries.
And here is the trap: Warsh himself admitted that "monetary policy isn't yet tight." So rates at 3.75%-4% are not enough. Three more hikes are coming. Your mortgage rate stays high. Your car loan stays high. Your credit card compounds at 24%, 27%, even 30%. At the same time, your grocery bill, your rent, your utility costs: also rising.
That is stagflation. Costs going up. Borrowing costs going up. Savings earning less than real inflation. The people who wrote this script have a term for it. They call it "returning to target." I call it managed decline.
My rich dad bought his first silver in the 1960s. Not because silver was exciting. Because he watched the government spend money it did not have, print the difference, and call the result "monetary policy." Fifty years later the script has not changed.
Now. Before I tell you what I am watching right now in gold and real assets, there is something you need to see first.
SPONSORED: STANSBERRY RESEARCH
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THE PLAY
Here is what stagflation tells you to do.
Do NOT hold cash. Every month inflation runs at 3.7%, your dollars in a savings account are losing purchasing power. Even if the bank is paying you 4%, you are barely breaking even. And that is BEFORE taxes on the interest.
Do NOT rely on bonds. With three more hikes coming, bond prices will keep falling. The 10-year Treasury yield is at a two-decade high. The people who loaded up on "safe" bonds in 2021 are still underwater.
What my rich dad did in the 1970s: he bought gold. Silver. Real estate with fixed-rate debt. Hard assets that governments cannot print. Assets that sit outside the banking system's squeeze play.
The Fed meeting yesterday changed nothing and confirmed everything. They are not going to save you. They are managing a system that is slowly transferring wealth from people who earn dollars to people who own assets.
Decide which side you are on.
To your freedom,
Robert Kiyosaki
Author, Rich Dad Poor Dad
P.S. The governments of Saudi Arabia and Kuwait once hired our friend Larry Benedict. So did the banks that hold money for Exxon, Chevron, and Shell. For decades, he helped the most powerful players in oil grow their money. Now he's revealing his top oil strategy, adapted so ordinary folks can use it too. Watch the free presentation here.