For today’s edition, I’m unlocking one of my special boots-on-the-ground videos.
This one is normally reserved for Distortion Report Elite members. It’s part of a 12-video series I started this year, where I travel the country and visit each of the 12 banks in the Federal Reserve System.
So far, I’ve visited six of the Fed’s banks. One of those was its Seattle branch. And with talk of government digital currencies in the air, this is a branch you’ll want to pay attention to in the coming months.
For more on why, click the image below to watch the video. And, as always, you can also scroll down to read the transcript.
Editor, Inside Wall Street with Nomi Prins
Hello and greetings from outside Seattle, Washington.
I’m coming to you from Renton, Washington State. It’s nearly 11 miles from downtown Seattle, in the great Pacific Northwest.
Right behind me is the Federal Reserve Seattle branch.
What’s really interesting about this regional branch is that it’s not in the heart of downtown Seattle. But more on that in a moment.
The Seattle branch falls under the San Francisco Fed’s 12th district.
That’s the largest geographic and economic area in the Federal Reserve System. And it covers nine states: California, Arizona, Nevada, Utah, Washington, Oregon, parts of Idaho, Alaska, and Hawaii.
The San Francisco Fed and its branches, like the Seattle branch, are considered to be the most important part of the Federal Reserve System.
They’re just behind the New York Fed or Wall Street Fed… especially for consumers.
That’s because they focus on monitoring something called the Personal Consumption Expenditure Price Index.
That index measures overall inflation, as well as cyclical inflation in the economy and how that impacts ordinary Americans.
Central Role in Our “New Money” Profit Sector
In 2008, the Seattle Fed relocated from downtown Seattle to Renton because it needed a much bigger vault.
And so, this sleek facility is one of the newest buildings in the Federal Reserve System. The vault is automatic.
The Seattle Fed branch is also critical because of its role in monitoring the Fed’s payment processing systems.
You see, when the Fed rolled out its internal system for processing cash in 2016, this branch was the first to implement it.
And while there’s no way to be sure…
There’s every reason to believe that when the Fed decides to delve into the world of New Money and create a central bank digital currency (or CBDC)…
The Seattle branch could lead the testing of those systems.
How Wall Street Stays Ahead of Financial Shocks
What the post-pandemic recovery and related unease in the economy revealed is that inflation and money are the driving factors behind The Great Distortion between the markets and the real economy.
We saw 40-year highs in inflation levels in early 2022. Inflationary hurdles shocked consumers at all levels of the economic spectrum.
Mega companies, like those based in and around Seattle – including Amazon, Boeing, and Microsoft – monitor the sort of data that the Seattle Fed branch produces. They then pass their costs onto consumers.
But my old Wall Street colleagues and savvy investors know something key about how to navigate and profit from these higher inflationary environments.
First, they know that the government always publicly understates inflation when it’s rising. Why?
Because if places like the Fed, the Treasury Department, and the Executive Branch broadcast inflationary problems as they unfolded…
Then they would be under political pressure to craft budgetary and monetary policies in response.
In other words, they would need to be proactive. And that’s just not in the cards for Washington today.
Second, my old Wall Street colleagues examine research from places like the Seattle Fed branch to see unfolding micro trends before they are publicly acknowledged by Washington or by the media.
And that’s one way that they stay ahead of financial shocks.
They direct their money into sectors, assets, or companies that are best positioned to outperform turbulent periods for the longer haul.
Key to Navigating Transformational Times
Retail investors can monitor rising prices based on their experiences and invest accordingly, too.
Allocating your investments across a diverse range of asset classes and sectors is key to navigating choppy and transformational times.
For instance, many investors see gold or other precious metals with use values (such as silver and copper) as both a hedge for inflation and a vehicle for wealth preservation and growth.
During volatile periods, these precious metals are cornerstones of a well-balanced, long-term investment strategy.
And just as Wall Street follows the Fed’s Seattle branch for signals on inflationary or deflationary trends, savvy investors should too.
Thanks for tuning in.