(Money Metals News Service) Mike Maharrey opens this week’s Money Metals Midweek Memo with a warning ripped from Jurassic Park: just because you can doesn’t mean you should.
He applies this to the Federal Reserve, accusing it of blindly tinkering with the economy’s most fundamental signal—interest rates.
The parallel is sharp. Dr. Ian Malcolm warned of scientific hubris in resurrecting dinosaurs. Maharrey warns of economic hubris in artificially setting the price of money.
His target?
Fed Chairman Jerome Powell and the entire central planning mindset.
Central Planning and the Interest Rate Illusion
Interest rates aren’t just numbers on a chart. They’re prices—the cost of borrowing money. And like all prices, they should be determined by the free market, not a handful of PhDs behind closed doors.
When the government sets prices, chaos follows.
We’ve seen it before: wage and price controls in the 1970s. Rent control in New York. Minimum wage laws that distort hiring.
Maharrey says interest rate manipulation is no different. It scrambles economic signals, leading to misallocated resources and broken feedback loops.
That’s not theory. It’s history repeating itself.
The Knowledge Problem: Hayek, Mises, and the Limits of Central Planning
Maharrey invokes Friedrich Hayek’s “knowledge problem.”
No single entity—especially not the Fed—can possess the infinite, local, and ever-changing data needed to manage a complex economy.
He brings in Ludwig von Mises, too.
Prices, Mises argued, are not constructs. They’re outcomes of voluntary exchanges. The moment a central authority starts dictating them, the market mechanism collapses.
Despite these clear warnings from economic giants, today’s central planners continue acting as if they can engineer perfection. Maharrey says they can’t—and never will.
Where We Are Now: Historically Loose Monetary Policy
Despite the media hype, today’s interest rates are not historically high. They’ve merely returned to pre-2008 levels. The Fed funds rate just slightly exceeds the 2006 peak—before the Great Recession hit.
But the trend matters more than the number. Each rate-hiking cycle since the 1980s has peaked lower than the last. And each crisis has required deeper and longer easy-money intervention to paper over the damage.
The outlier? A near-decade of 0% rates after 2008.
It changed everything—creating an entire generation of professionals who think zero is normal.
Inflation Is Still Brewing Beneath the Surface
Maharrey challenges the focus on CPI. It’s a lagging indicator, he says. True inflation stems from expanding the money supply—and that’s happening again.
The U.S. money supply bottomed about a year ago. Since then, it’s climbed steadily. And trillions from the COVID and 2008 bailouts still circulate in the economy.
With historically loose financial conditions still in place—per the Chicago Fed’s NFCI reading of -0.50 as of June 27—Maharrey warns the inflation fire is far from extinguished.
The Trap: Damned If You Cut, Damned If You Don’t
The Fed faces a no-win scenario. Cutting rates would stimulate the economy—but reignite inflation. Holding rates could tame inflation—but risks crushing a debt-saturated system.
President Trump wants cuts. He’s called Powell “stupid” and “low IQ.” And he’s not alone. Markets, politicians, and Wall Street all pine for easier money.
But easier money means more inflation.
More borrowing.
More malinvestment.
It’s a short-term fix with long-term costs.
Stagflation and the Case for Real Money
Maharrey sees stagflation on the horizon—a toxic mix of economic stagnation and rising prices. The worst of both worlds.
That’s why he hammers the case for gold and silver. Precious metals aren’t liabilities. They aren’t dependent on central bank decisions. And they aren’t vulnerable to the printing press.
Gold and silver have served as money for thousands of years. They still do. And as Maharrey puts it, “you don’t want your wealth sitting in a campfire of fiat dollars.”
Now might be the best time to buy. With gold and silver consolidating, short-term dips could be long-term opportunities.
Final Thought: Planning Interest Rates Is as Dumb as Planning iPhone Prices
Maharrey wraps the show by returning to first principles. Setting interest rates is central planning. And central planning always fails.
He urges listeners not to get distracted by CPI prints or political theater. The real issue is systemic. The Fed has broken the economy’s compass—and now we’re all lost in the fog.
His advice?
Hold gold.
Hold silver.
And don’t wait for the next crisis to take action.
Call Money Metals Exchange at 1-800-800-1865, or visit MoneyMetals.com to begin building your gold and silver portfolio—starting with as little as $100/month through their monthly savings plan.
