“The first casualty, when war comes, is truth.”

— Attributed to Hiram Johnson

Dear Reader,

The Federal Reserve raised interest rates yesterday, explicitly to fight inflation. But it warned that its efforts might not be enough due to the ongoing war in Eastern Europe.

The official statement says:

The invasion of Ukraine by Russia is causing tremendous human and economic hardship. The implications for the U.S. economy are highly uncertain, but in the near term the invasion and related events are likely to create additional upward pressure on inflation and weigh on economic activity.

In other words, it’s Vladimir Putin’s fault if prices keep going up — and not anyone else’s. It has nothing to do with years of bad monetary policies and short-sighted energy goals. They may as well have deflected any responsibility with a limerick — “There once was a bad man from Russia…”

A quick glance at the markets would make you think investors are taking the Fed at its word. The major indexes are up… implying that Wall Street is on board with the rate hikes.

However, James West of Midas Letter Live believes there are actually other forces at work:

What is happening here is that the President’s Working Group [PWG] (or its agents or affiliates) appears to be actively making direct asset purchases in the form of S&P 500, NASDAQ-100 and Dow Jones Industrial Average index futures so that obedient and complicit “media” companies will report what appears to be positive investor sentiment in the face of a hugely negative catalyst.

While he admits it’s “not provable because of the opaque nature of futures market reporting,” he believes only “lunatics and PWG agents” would be buying these assets right now.

In his very first update for Countdown to Crisis, our Jim Rickards explained why people should be suspicious of upward moves in the major indexes:

Since the Fed has misdiagnosed the disease, they are applying the wrong medicine. Tight money won’t solve a supply shock. Higher prices will continue. But tight money will hurt consumers, increase savings and raise mortgage interest rates, which hurts housing.

The Fed’s track record of using the wrong models, using flawed models and doing the wrong thing at the wrong time remains intact. Today’s Fed announcement is the beginning of a chain of tightening that will sink stock markets and slow the economy.

Ironic, isn’t it, that the Fed’s deflections, misdirections and propaganda are having the desired effect on the media as U.S. policymakers continue to accuse Russia of manipulating the truth?

That was actually the main topic of conversation with my next Wiggin Session guest, Demetri Kofinas. He’s currently the host of his own podcast, Hidden Forces (hiddenforces.io). But before that, he was producer of Capital Account, a regular news show on Russia Today (RT).

He left long before American tech companies stopped carrying its programming due to its ties to the Russian government. In fact, one of his motivations for quitting was the fact that “the network just became increasingly an overt distribution arm of Russia’s international information warfare.”

You may recall that many RT staff expressed a similar sentiment when they quit en masse after Russia launched its invasion.

“It’s a shame,” Demetri tells me, “because RT, its foundation, from its founding, had a really strong countercultural quality to it.”

Then the Russian government increased its control, pushing Demetri and his coworkers to broadcast a strict agenda. The organization suffered as a result. “You’d think from the outside that it was a well-oiled propaganda machine,” Demetri says, “but it wasn’t.”

Insead, “it was a circus. It was run by a clown.”

You’ll hear more about his time with RT — and how it compares to the propaganda issued by U.S. media — in this week’s Session. In the meantime, let me know your thoughts at WigginSessions@5minforecast.com.

Regards,

Addison Wiggin
Founder, The Wiggin Sessions

P.S. In 1913, much of the Western world abandoned the gold standard that backed 70 years of relative peace and global trade in the Victorian era. The reason? It was obvious to most that World War I was in the air… and you can’t fight a war on the gold standard. It doesn’t allow for an expansive enough monetary policy to finance and build stuff… just to blow it up.

Can you fight a war on the Bitcoin standard? Volodomir Zelensky, president-in-siege of Ukraine, wants to find out.

Yesterday, Ukraine legalized cryptocurrencies in the country. Last month, Ukraine began accepting Bitcoin and ether to its military defense fund. Since then it has expanded to other cryptos and launched an official government website for people to donate from around the world. So far donations have exceeded $63 million.