However, expectations of a Fed pivot keep getting pushed back. "I don’t think it's likely that the committee will reach a level of confidence by the time of the March meeting to identify March as the time to do that," Fed Chair Jerome Powell said of possible cuts at the Fed's January meeting. The sentiment is shared by John Rubino, founder of DollarCollapse.com, Wall Street financial analyst and renowned book author. He believes that the Fed will not pivot and so everybody who is factoring in lower inflation or lower interest rates is going to be disappointed. (Related: Inflation comes roaring back as Bidenomics harms American households.)
"Two big thoughts here. One is that you should never trust the headline number in a government economic report because that's not where the real action is. For instance, employment is the big one and they don't report a really good job number. And then later on, they'll either revise that number lower to the point where it would be a disappointment if they reported that number," he told Brighteon founder Mike Adams during a recent episode of the "Health Ranger Report" (HRR). He added that it is the same with inflation, where authorities give a completely acceptable number. "But when you dig a little deeper, you find things like the core services inflation that measures up at eight percent a year or something like that. And that's why the Fed can't lower interest rates yet because real inflation rather than just the headline number is much worse," he explained.
The analyst touched on his second point saying the stock market is not unique and it would only be so if the Fed started cutting interest rates because the stocks went rocketing lately. "Pretty much every big index is near record high and a lot of the sub-indexes are much higher. It's another tech bubble driven by artificial intelligence [AI]. In just the last year, anything with AI in its name suddenly attracts a ton of capital," he said. "But when the Fed looks at this, they can't have a rocking record high, wildly overvalued stock market, and then start cutting interest rates. It is because that would make the stock market overvaluation worse and give us an even bigger bust somewhere out there in the future."
This explains why the Fed's hands are tied right now, Rubino said. "We're kind of in higher for longer… plus the fact that it's an election year and the Fed is under immense pressure from the incumbents in Washington to produce a robustly growing economy in time for the campaigns... Fed is under pressure. Since they never really understood what it was they were doing, to begin with, this must be doubly confusing for them – bad models, incomprehensible economic theory and now political pressure."
Rubino: Teach your children jobs with manual labor
Touching on how the AI industry has been seen as the most promising field, Rubino and Adams agreed that it may make humanity "obsolete" but it is still not a game-changer. "AI is real and it's going to be this booming thing. And until quantum computers come along, and then AI running on quantum computers makes humanity obsolete… The internet was completely real back in, during the dot-com bubble. So, what was happening wasn't a game changer. It's just that the valuations go way out of line and competition became very intense for every niche," Rubino said.
However, Adams said, AI replaces human workers, especially human white-collar workers. It's not like people are being fired because there's still a human element in it. "But for the most part, these AI tools are making existing people more productive. Which means that a lot of companies don't have to hire new people for a lot of generative type of positions," the HRR host contributed.
Rubino concurred saying that the way automation works is it eats a sector from below, starting with the easiest stuff and those people get replaced. But there's still a lot of human value-added work being done. "So, the question with AI is how far can it go? Are we going to reach a point where the New York Times doesn't need reporters anymore? And that's what is scary because then you're eating up whole sectors. You're replacing huge swathes of people out there and this is uncharted territory. Factory automation was a big deal but nothing like AI in the knowledge-based world," he lamented.
He also advised parents to teach their children to do manual work like plumbing or being handymen because AI would not be able to steal that away. "Two years ago, people had job security if they knew two or three programming languages, for example. And now, you take a legal pad, sketch out some parameters, hand it to an AI and it creates your website for you," he added.
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Watch the full episode of the "Health Ranger Report" with Mike Adams featuring John Rubino below.
This video is from the Health Ranger Report channel on Brighteon.com.
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