SHORT EVERYTHING!!!
Posted on 09/20/2015 11:30:44 AM PDT by Jack Hydrazine
Yellen has inherited a complete nightmare.
Thursday’s decision to delay yet again the long-awaited liftoff from zero interest rates is illustrating that the world economy is totally screwed.
There is a lot of speculation about why the Fed seems so reluctant to “normalize monetary policy”. There are of course the typical domestic issues that there is low inflation, weak wage gains in the face of strong job growth, a hike will increase the Federal deficit and then there is the argument that corporations that now have $12.5 trillion in debt. All that is nice, but with corporate debt, our clients are locking in long-term at these levels, not funding anything short-term. Those clients who have listened are preparing for what is to come unlike government which has been forced to shorten the average duration of their debts blind to what happens when rates rise, which will be set in motion by the markets – not Yellen.
The Fed is really caught between a rock and a very dark place. Yes, they have the IMF and the world pleading with them not to raise rates for it will hurt other debtors who borrowed excessively using dollars to save money.
The Fed is also caught between domestic policy objectives that dictate they MUST raise rates of they will bankrupt countless pension funds and international where emerging markets will go into default because commodities have collapsed and they have no way of paying off this debt that has risen to about 50% of the US national debt.
By avoiding the normalization of interest rates (hikes), the Fed has encouraged government to spend far more than they realize because money is cheap. This will eventually light the fire under the economy helping to fuel the Sovereign Debt Crisis. There appears to be no hope for the Fed and they will be forced to raise rates only when they see asset inflation in equities. Then they will have no choice.
This is the worst possible mess and the longer they have waited to normalize interest rates, the worst the total crisis is becoming for they will have zero control over the economy and once that is seen, holy Hell will break loose.
Yes, read this already. He’s right. The blowout is going to be so bad, it will make the Great Depression look like a mere blip in history.
Get those wheelbarrows ready!
The fourth blood Moon of the Lunar Tetrad is coming up on 27/28SEP2015.
http://www.timeanddate.com/eclipse/lunar/2015-september-28
It’s also the first day of the Jewish holiday of Sukkot (aka Feast of Tabernacles).
“Get those wheelbarrows ready!”
I’m airing up the tires as we speak!
I am going to buy stock in wheelbarrow manufactures.
Oh, yeah! Yom Kippur starts the evening of Tuesday, 22SEP2015.
They still have ways ways to manipulate the markets, so it isn'tg oing to feel as bad as the Great Depression.
It's just going to feel bad for the rest of our lifetimes - or until the USA falls.
All of you folks in DEBT for Anything or Any Reason are going to be in a World of HURT.
What’s a safe currency?
No wiggle room is left.
Regardless of how rampant the inflation rate may be, there is still the historically-tested barter system.
We only sell one thing in this world, and that is our time.
We only buy one thing, and that is satisfaction.
Time traded for satisfaction is still the medium of exchange.
It sounds like the underlying philosophy here is that Fed control over the economy is our only hope. It has always been my view that the Fed has less control over long-term interest rates than people think. In fact, during my lifetime, the Fed has seemed to be behind the curve - the Fed seems to lower rates after the market begins to lower rates, etc.
There is no safe currency.
Forget the wheelbarrows. Time for tar, feathers and rope.
I don’t understand any of this.
I have a small mortgage which I could pay off with some savings.I have no other debt.
Is that the kind of debt that you mean?
.
Please Explain
.22 LR ammunition.
Go long on lead?
When the SHTF any debts you have will NOT be Payable, every last nickel you can scrounge will be necessary to EAT!!!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.