<p dir="ltr">The Federal Reserve has two main goals it tries to accomplish, high employment and stable prices. To accomplish these set goals it has independent policy making authority (key word independent). Meaning that it isn't influenced by political campaigns or outsider objectives, it acts with the American economy's best interests at heart. To further solidify its independence, it is stated in law that you cannot fire a Fed chair over a policy dispute. They can only be fired over clear malfeasance or wrongdoing. </p>
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<p dir="ltr">Over the past few months news has circulated that President Trump has tried to oust the current Fed chair Jerome Powell for not lowering interest rates to his liking. This is the definition of what you cannot do: fire the Fed chair over a policy dispute. Trump then accused Powell of spending too freely on the renovation of the Eccles building (offices for the Fed) in Washington D.C, hiking costs over the years and adding unneeded renovations that better suit himself. This was clearly just a smoke screen Trump used to accuse Powell of malfeasance in order to fire him and hire someone who would lower rates to his liking. </p>
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<p dir="ltr">If Trump were to succeed in ousting Powell before the rightful end of his term in May 2026 it would destroy the Fed’s independence. Thus future Fed chairs would be scared that they could lose their jobs over policy disputes and would act according to the president's liking even at the economy’s expense. This permits us to reminisce back upon the “great inflation” period from the late 60s where Lyndon B Johnson heavily influenced then Fed chair Martin Jr. to lower rates in order to fund wartime ventures at the economy’s expense. Martin Jr. wanted to hike rates and tighten policy to lower inflation but LBJ hired FOMC members that agreed with his policy and almost forced Martin Jr. to do as he wanted. Thus enabling one of the greatest inflationary periods in our country’s history all because the Fed couldn't keep its policy making independence.</p>
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<p><strong>Equity Insights </strong></p>
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<p dir="ltr">↑Dicks(DKS): With almost 7% growth over the past 3 months and a 2.18% dividend yield, DSG is a great long term play. With its acquisition of Footlocker earlier this year it can grow revenue and market share in the shoe space. Footlocker adds 2400 stores and 8 billion in yearly sales to DSG’s already whale sized 13 billion. Dicks store within a store strategy of promoting other brands is intelligent and profitable. Dicks is expanding with its new “house of sport” store that offers unique experiences and sports products. It plans to open 75-100 more “house of sport” stores by 2027. </p>
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<p dir="ltr">↑Circle(CRCL):With its IPO on June 5th 2025, Circle is one of the many companies to profit from the 2025 IPO boom. Circle reached a high of $298.99 on June 23rd and is now trading at a dip of $150. Circle operates a platform for stablecoins such as its USDC, stablecoins are crypto pegged to the dollar or euro. Offering the speed and security of crypto transactions but without the volatility of ordinary crypto. Stablecoins have tons of room to grow in our current monetary environment making circle a strong buy now.</p>
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<p dir="ltr">Theme of the Week</p>
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<p dir="ltr">The gold standard, an oft cited financial policy relic that many who are alive today did not even live to see after its official end in 1971. Currently we are 5.5 decades past the gold standard and it is often cited as a policy that needs its comeback. Although gold no doubt has a place in the global economy and could definitely be utilized more, we should not at any cost go back to the gold standard.</p>
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<p dir="ltr">Many don't realize that a big cause of the great depression was the fact that we were on the gold standard. During the early 20th century, WW1 temporarily suspended the gold standard due to high spending on arms and wartime supplies. Thus causing high inflation and sending prices and government borrowing skyrocketing. When we resumed the international gold standard post war the high inflation caused many to buy gold as a hedge against it, thus starting a “run on gold” in the 30’s. Since everyone was depositing money for gold and buying gold, countries had to lower their money supply to keep the ratio of gold to dollars even because of tons of gold outflows. This contractionary policy led to lower prices/wages which hurt debtors like farmers who because of lower crop prices and thus lower revenue now couldn't pay back their loans. This hurt banks and caused many to become insolvent (liabilities>assets) from bank runs and defaults on loans. </p>
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<p dir="ltr">In 1933 FDR broke the link between the dollar and gold, permitting the Fed to raise our money supply to heathen our economy and enact expansionary monetary policy. Overall, the Fed’s overcommitment and strict adherence to the gold standard in the early 20th century helped lead to the worst depression of a century.</p>
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<p dir="ltr">About This Newsletter </p>
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<p dir="ltr">This newsletter shares insights into our complex current day economic/geopolitical situations and provides clear, actionable equities insights as well. Whether just getting into the game or a seasoned veteran, this newsletter is your edge. </p>
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