Economist: Nominating Powell is a "Malicious Suppression" of Gold and Silver, Hawkish Rate Hike Cycle Difficult to Implement

BlockBeats News, May 27th, Ludwig von Mises Institute senior researcher Mark Thornton stated that the current US market is at a historically high valuation, with long-term low interest rates and monetary expansion driving up asset prices, while exacerbating wealth inequality.

Thornton pointed out that both the Buffett Indicator and the CAPE Ratio are at extreme highs, with the latter reaching its current level only once in the past 150 years. He believes that this growth driven by credit expansion has benefited large financial institutions and asset holders, while ordinary consumers are experiencing higher inflation pressure.

When discussing the nomination of the Federal Reserve Chair, Thornton criticized the nomination of Kevin Warsh, noting a rapid decline in gold and silver prices, attributing it to the "greatest malicious manipulation" of the precious metals market, and implying that some large banks may have had early knowledge of the news.

However, he also pointed out that the current US debt has exceeded 120% of GDP, and if a significant interest rate hike similar to the Volcker era were to occur again, it would significantly raise the cost of borrowing and "choke the economy," making it difficult to achieve the market's expectation of a hawkish rate hike cycle.

Furthermore, Thornton also warned that the escalating situation in the Middle East and the disruption of transportation in the Strait of Hormuz continue to drive up energy and commodity prices, further strengthening the market's demand for physical assets such as gold and silver.