When J.H. Powell Talks

We Should Have Listened To Ayn Rand

If you were surprised by today’s 1/4 point hike and Powell’s accompanying remarks you are in the minority. While Volcker remains my favorite Fed chairman, Powell is coming in a close second. His policies are one reason but more so it’s just the way he presents himself; consistent with a matter of fact agenda.

Federal Reserve Chair Jerome Powell has left the door open for additional rate hikes following the decision by the Fed’s policy committee to raise a key interest rate by one quarter of one percentage point.

When the Federal Open Market Committee meets again in September, it will have seen two more reports on jobs and inflation, in addition to key economic reports. If inflation is still not at the Fed’s 2% target, the reports will help the FOMC determine whether to hold rates at the current level or increase them.

“It is certainly possible we would raise funds again at the September meeting if the data warranted,” Powell said. “And I would also say it is possible we would choose to hold steady at that meeting,” he continued. Splitting it right down the middle bending towards the “job at hand” not the next decision. Not too shabby in my opinion.

Powell reiterated to reporters that the central bankers still have “a long way to go” to reach that 2% target. I’m pleased by his perspective. Inflation remains embedded. Just got back from the grocery store, first hand research is priceless, and the peanut butter I like best is up 40% from the last time I bought it. Good thing I don’t eat it too often.

Anyhow Powell is a good guy. No one is oblivious to the political conundrum we are about to go through in 2024 but my sense is that Powell will maintain his directives. If he’s a true Volcker, he’ll note that rates need to be about 50% higher than the inflation rate. That would put the target rate around the 6% level. Nonetheless, he is going to win this battle so as presented in a prior article, keep buying the longer term treasury ETFs and hold them for a couple years. If you get a dip in their price buy more.

And now let me turn my attention to one of my favorite philosophers and writers of all time; Ayn Rand. I can’t tell you how many times I’ve read “The Fountainhead” but each time I do I revalidate my Libertarian beliefs.

Ayn Rand Had A Crystal Ball

The celebrated Russian-born American author and philosopher has predicted with haunting accuracy many of the nation’s current crises. To read the entire Fox News article click here.

Rand believed that government would encroach on parental rights, stifle academic and scientific research, and fuel a dangerous mentality of victimhood. She was right. As understood, history is moved by ideas and if you have rotten ideas you have rotten outcomes.

Rand, after arriving in the United States founded objectivism. She’s known for “Atlas Shrugged” but in my opinion “The Fountainhead” is my favorite. She felt there were a couple problems on the horizon. I summarize & add commentary to this dissertation as follows, category by category:

1. Education

The 1979 creation of the Department of Education “DOE”, was followed by a massive reductions in the number of local school districts and local power over education. The promise of centralized education stripped money out of local communities, funded a federal bureaucracy, controlling local policy through federal purse strings. Given we are producing kids that can no longer do math or read my sense is that these changes have been a mistake in addition to the “woke” agenda that is being thrust upon these children. What do you think?

2. Parental Rights

The Federal government has come between parents and children in ways Americans until recently never dreamed possible. We’re finally starting to fight back.

"The government has no right to interfere in the upbringing of a child, which is entirely the responsibility and the right of the parent." — Ayn Rand

School boards and bureaucrats openly silence parents trying as they maintain a voice in public education.Legislators are actively working to remove parents from making life-altering medical decisions for their children. Something is very wrong here. The government has no right to interfere in the upbringing of a child, which is entirely the responsibility and the right of the parent. The “big guy” calls them “our children”. I hope he doesn’t mean raising more kids like Hunter unless they want to sell worthless artwork.

3. Victimhood

What happened to our cultural belief that anyone can succeed regardless of identity. I guess that all of these immigrants flooding into the United States still believe this to be the case. The rise of this victimhood culture erased this opportunity for millions of Americans and those currently crossing our borders are in for a day of reckoning. It’s obvious that “society” at least as one party seeks to define it, is stacked against them, effort is futile and dependence on the government now defines freedom. Maybe they’ll see the light and start crossing the border in the other direction.

4. Big Government Stifles Intellectual Freedom

Science, academia & the arts are now dependent on the government. Intellectual and creative freedoms positioning the United States as the “global leader” in research has been replaced by conformity. There is something very wrong with that. China can buy its way into our better educational institutions; they’re doing that for a reason.

"Government grants to the arts are a horror. They make it harder for artists who lack political pull and do not share in contemporary esthetic tastes. No whim is more ugly and revolting than the esthetic whim of some bureaucrat. All an artist can do in this context is be a spiritual bootlicker," Rand said in a 1976 lecture.

Elizabeth Hirsh Naftali, a Los Angeles real estate investor and philanthropist, bought one of Hunter’s works. She was appointed by President Biden to the Commission for the Preservation of America’s Heritage Abroad in July 2022. Need I say more.

5. Cancel Culture Kills Capitalism

As I was growing up, capitalism produced wealth and opportunity. Rand argued that leftists of her time were morally corrupt for advocating utopian philosophies pushing the United States toward statism. She was critical of conservatives and traditionalists who failed to fight back, predicting they would be cowed by public pressure or what we now call “cancel culture”. 

Rand sensed the fight between capitalism and altruism could tear apart the nation as we are witnessing today. "Capitalism and altruism are incompatible . . . They cannot co-exist in the same man or in the same society," she said. I agree; which culture do you want to cancel?

When you are right you are right. The direction this country takes is in your hands. In using geopolitical events to forecast “what’s next,” our next Presidential election has value. It’s cut & dry; the choice is “black & white” and will dictate the direction we’ll take going forward, both individually, economically and politically. There a lot on the line; understand it before pulling that voting machine lever regardless of who’s on the ballot. You’re not voting for the individual; you’re voting for what your values are.

I’ve been working closely with Udemy and should complete the initial segment of my first course later this week. Together with Substack, we have put together a method to receive payments for what I post. I hope you’ve found my articles to be beneficial. I’m not switching to a “Paid” Substack model at this time so don’t worry; too much needs to be addressed, learned and practiced but you will be able to make a “contribution”. I thank you in advance; maybe I’ll even eat a little more peanut butter. I gave up Frosted Flakes, Cheerios and Rice Krispies a while back. I do miss Tony, Snap, Crackle & Pop.

I’m just a “young” 68 years old looking to help you become the best damn investor or trader you can possibly be. Everyone learns at their own pace. If you pick everything up the first time through, great but if not email me at david@thetickeredu.com so we can further help. Again, let me know what you want to learn, I’m all ears.

So J.B. Powell talked and we listened. There’s one guy out there, admittedly one of my biggest fans, who the world listened to 45 years ago. His name is George Ball. He ran E.F. Hutton and changed the way brokerage firms marketed their wares. George is a humble man despite all that he has accomplished he’ll still tell you that it was his wife that came up with “When E.F. Hutton Talks People Listen”. To me, from the first time we met through the last email we exchanged, he’s been an inspiration. Thanks George.