(Schiff)—The Federal Reserve operates under a dual mandate from Congress — to achieve maximum employment and stable prices. In a recent podcast, Peter Schiff explained why the Fed won’t achieve either.
The FOMC held its November meeting last week. As expected, the Fed left interest rates unchanged. Peter said you can almost always count on the central bank to do what is expected.
The Fed never wants to confound expectations. They never want to surprise the markets. So, if the markets expect no rate hike, well, they deliver no rate hike, and that’s what happened.”
During his prepared remarks, Federal Reserve Chairman Jerome Powell acknowledged the “economic hardship” caused by price inflation. But Peter said he doesn’t seem to grasp the full picture.
Since inflation is caused by the government, and caused by the Federal Reserve, it’s the government and the Fed that are creating that hardship. It’s not like it’s just happening out of left field.”
It’s an intentional policy. The government has decided that it will pay for its borrowing and spending through an inflation tax.
Now, had they used another form of taxation, had the Biden administration, and the Trump administration for that matter, had they raised taxes enough to pay for all of these government programs, that would have created hardship too. Families would be struggling under the burden of crushing taxation. So because the government decided to tax them through inflation as opposed to through the income tax or the payroll tax, the hardship that is being created is because of government. It’s not just something that’s happening by happenstance.”
Powell also reiterated that the goal is “price stability.” Nobody ever bothers to ask, “Why?” What’s so good about price stability?
What about lower prices? Because price stability, the way a normal person would define it, is prices stay the same. Well, I’m a consumer. I’d rather have prices go down than prices remain the same. So, what if prices went down 1% a year, or 2% a year? Why is that so bad? Why does the Fed have to replace that with stability?”
Peter said we don’t really need “price stability.”
It’s really a BS goal.”
And we don’t even actually have a goal of price stability. The goal is for prices to go up 2%.
There’s nothing stable about that other than the rate of increase.”
After the Fed meeting, Powell admitted the central bank isn’t anywhere near that goal and that this is a long process.
He’s underestimating. Waiting for inflation to go to 2% is going to be like waiting for Godot. It’s never going to happen.”
During the Q&A, Powell emphasized that we have a “very strong” economy. Just two days later, we got a very weak jobs report. (Peter talked about this earlier in the podcast.)
How is the economy so strong if the labor market is that weak? … I don’t know what Powell is looking at. I think he’s just reading a script that the Biden administration handed him because he’s just reiterating their talking points to talk up the economy so Biden can get credit for it.”
The question is how will Powell respond when the labor market continues to deteriorate? That would imply the Fed should stop hiking. But as Peter pointed out, one of the reasons the labor market is weakening is because price inflation is strengthening. How can he focus on a weakening labor market and ignore strengthening inflation?
Meanwhile, Powell continued to insist that we need to see a slowdown in economic growth and some “dampening” in the labor market in order to “fully restore price stability.” In other words, he wants to see more people lose their jobs. That’s because he thinks people are spending because they are doing well, that spending is creating more jobs, and also pushing wages higher. Peter said people are spending more because prices are going up.
They’re spending because the money supply has gone up. They’ve got more money to spend, and they’re spending because they’re still able to access credit. They’re taking that borrowed money and spending it. This is not how you grow an economy. This is how you destroy an economy. This is not a virtuous dynamic that he is describing. It is a vicious one that is going to end in ruin. Because you don’t grow an economy by people spending money.”
You grow an economy by not spending money and saving. That provides seed corn for capital investment. That increases productivity creating more output.
You produce your way to prosperity. You save your way, and then invest and produce your way into prosperity. We’re not doing that. We’re trying to put the cart before the horse.”
Peter reiterated that we don’t have a strong economy. We have an inflationary economy.
It’s inflation that is driving everything. Powell just doesn’t realize that. He’s looking at the ‘strong’ economy, and he’s thinking everything is good. He’s looking at inflation. He just doesn’t understand that.”
Peter said he doesn’t think there are any more rabbits the central bankers can pull out of their hats or any road left where they can kick the can. The economy is about to implode and inflation is alive and well. That means the Fed can chuck both its mandates right out the window.
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Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.