{"id":68627,"date":"2022-11-14T09:01:33","date_gmt":"2022-11-14T09:01:33","guid":{"rendered":"https:\/\/www.cryptocabaret.com\/?p=68627"},"modified":"2022-11-14T09:01:33","modified_gmt":"2022-11-14T09:01:33","slug":"ark-invest-ceo-warns-feds-actions-could-lead-to-1929-like-great-depression-elon-musk-agrees","status":"publish","type":"post","link":"https:\/\/www.cryptocabaret.com\/?p=68627","title":{"rendered":"Ark Invest CEO Warns Fed\u2019s Actions Could Lead to 1929-Like Great Depression \u2014 Elon Musk Agrees"},"content":{"rendered":"

\"Ark<\/p>\n

The CEO of investment management firm Ark Invest has warned that if the Federal Reserve does not pivot, the current economic setup will be similar to 1929 when the Great Depression started. Tesla CEO and Twitter chief Elon Musk agreed.<\/strong><\/p>\n

The Fed, Inflation, and the Great Depression<\/h2>\n

Ark Invest CEO Cathie Wood, who is also the investment management firm\u2019s founder and CIO, shared her thoughts about inflation and how the Federal Reserve could push the global economy into a 1929-like depression in a series of tweets Saturday.<\/p>\n

She explained that the Federal Reserve raised interest rates \u201cto squelch financial speculation\u201d in 1929, followed by Congress passing the Smoot-Hawley Tariff Act in 1930, which put more than 50% tariffs on over 20,000 goods and pushed the global economy into the Great Depression. \u201cIf the Fed does not pivot, the setup will be more like 1929,\u201d she warned. Tesla, Spacex, and Twitter boss Elon Musk concurred.<\/p>\n

\"Ark<\/a><\/p>\n

Wood pointed out that \u201cIf inflation is unwinding, as we believe, then we could be heading back to the future, the Roaring Twenties,\u201d emphasizing:<\/p>\n

\n

The setup is remarkably similar!<\/p>\n<\/blockquote>\n

The Ark Invest executive noted that the world was at war prior to the Roaring Twenties, citing WWI and the Spanish Flu pandemic. Inflation soared during that time, peaking at 24% in June 1920, she continued, adding that the Federal Reserve responded by raising interest rates less than two-fold from 4.6% to 7% in 1919-1920.<\/p>\n

Inflation then dropped \u201cprecipitously in one year to negative 15% in June 1921,\u201d Wood said, noting that \u201cthe Fed lowered interest rates from 7% in May 1921 to 4% in July 1922, tripping the switch for the Roaring Twenties.\u201d The executive additionally shared:<\/p>\n

\n

We would not be surprised to see broad-based inflation turn negative in 2023.<\/p>\n<\/blockquote>\n

\u201cFaced with much lower inflation this time around, the Fed has increased interest rates 16-fold, a serious mistake in our view,\u201d she further opined.<\/p>\n

\u201cThe University of Michigan\u2019s Consumer Sentiment Survey is at a record low, below levels hit in 2008-09 and 1979-82, a setup for a liquidity trap like that in the Great Depression when massive monetary stimulus failed,\u201d the Ark Invest chief cautioned.<\/p>\n

Noting that the Great Depression and the Roaring Twenties are two possible outcomes, Wood described: \u201cGiven conflicting data and the stark difference in these outcomes, the Fed should be debating the possible risks associated with its current policy, at the very least, instead of voting unanimously.\u201d<\/p>\n

Emphasizing the similarity between today\u2019s economic situation and the one in 1929, she stressed:<\/p>\n

\n

Unfortunately, today has some echoes of the same. The Fed is ignoring deflationary signals, and the Chips Act could harm trade perhaps more than we understand.<\/p>\n<\/blockquote>\n

Do you agree with Ark Invest CEO Cathie Wood and Tesla CEO Elon Musk about the Fed and the risk of a 1929-like depression? Let us know in the comments section below.<\/strong><\/em><\/p>\n

Powered by WPeMatico<\/a><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"

The CEO of investment management firm Ark Invest has warned that if the Federal Reserve does not pivot, the current economic setup will be similar to 1929 when the Great Depression started. Tesla CEO and Twitter chief Elon Musk agreed. The Fed, Inflation, and the Great Depression Ark Invest CEO Cathie Wood, who is also […]<\/p>\n","protected":false},"author":2,"featured_media":68628,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[309],"tags":[],"class_list":["post-68627","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency"],"_links":{"self":[{"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=\/wp\/v2\/posts\/68627","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=68627"}],"version-history":[{"count":0,"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=\/wp\/v2\/posts\/68627\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=\/wp\/v2\/media\/68628"}],"wp:attachment":[{"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=68627"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=68627"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=68627"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}