“The Fed is lying about the causes of inflation. When asked about its role in causing inflation, in terms of buying assets, it says “oh no, that’s not the problem – we only create reserves and reserves – you silly rube – do not leak out into the real economy.”

John Titus has hit another grand slam home run in his Best Evidence podcast series. This time he annihilates the idea that the Fed does not print money but rather simply creates bank reserves. Using data from the Fed’s website, Titus explains the process by which the creation of bank reserves is transmitted as the equivalent of printed money into the real economy. This process causes currency devaluation that manifests as rising prices.

Titus shows how the Fed’s recent actions have caused banking system liquidity to recede, which in turn has caused the stock and housing markets tip over and has pushed the U.S. economy into recession. Unless the Fed reverses its policy, pronto, there will be a serious stock market crash and an economic depression. In this scenario, physical gold and silver will be the proverbial “last man standing.” However, more likely, sometime this fall the Fed will make every effort to reflated the financial system. This will require an unprecedented amount of new money printing, which will send gold, silver and mining stocks into a bull move that will quickly become parabolic.