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.
Hard to fix stupid. Read an article just yesterday in the Sunday paper where a democrat operative was feeling discriminated against based on someone’s suggestion that the President was stupid, and that it wasn’t just the President, but those who voted for him. The operative was in wonderment as to how such a suggestion could be justified.
I partially disagree. When the world blows up, all current mortgages my become null and void. The banks are not even going to have money for people that was in the checking accounts.
We are about to enter uncharted territory.
Whose going to be around to collect payments?
Cash will be good... no, cash will be King, for a short while. Have some on hand, then back it up with PMs.
You can bet most all collectors will be dealing with their own debt.
If it truly hits the fan, debt won't matter. Who's going to collect it?
What are PMs?
Au & Ag
Bkmk
By suppressing interest rates the feral governmenmt has been stealing from savers for many years.
Thanks for the encouragement.
So basically our own federal government continues to screw Americans to protect foreign borrowers and speculators.
Write a big check to zero out your bank accounts and give it to the property tax office to cover future payments.
Evictions would on who you knew and who you were able to pay off and how nice a mcmansion it was. They won’t bother you if you live in a dump.
That makes sense.
I explained a month or so ago, I went to a bank where I have an account and took cash money in coins and one dollar bills. The bank nearly shut down to do that. I was there twenty/thirty minutes. It was as though they had never given actual cash to anyone. I wiped out a specific coin and one dollar bills; they even had to give me some $5 bills as they had no more $1 bills.
If another customer had come in wanting those denominations of cash, the bank had none to give him/her. If you want to have cash in your house, do it now before there is none to give you. It’s also a good thing to have loaded weapons in your house where you can get to them. We have plenty and I live with a sharp shooter from the early days of his youth and the military later.
Dont think for a second that Property Records and Titles, Recorded Mortgage’s will be lost in the Fog, They NEVER HAVE.The Bankers will be there to pick up the pieces, and your Property will be theirs. They may not get paid now, but they will in the end
As I said, if it truly hits the fan, who will come collecting? Not only that, but what will be left to collect? I'm not talking about a Ferguson, or Baltimore. I'm talking about things that cause continents to burn.
Yes, could be the beginning of the very wild ride.
There Are Indications That A Major Financial Event In Germany Could Be Imminent
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