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.
When the SHTF any debts you have will NOT be Payable, every last nickel you can scrounge will be necessary to EAT!!!
Hmm, I think Gold, Silver, Brass and Lead will do pretty well
Sounds like the four food groups!
“All of you folks in DEBT for Anything or Any Reason are going to be in a World of HURT.”
Well, I guess I’m screwed then. We have a home equity loan and took out a consolidation loan to have debts paid off by the time I retire in about three years. Looks like I won’t have that much time.
Or call that the Four Food Groups Of The Apocalypse!
Just bought 4 acre ranch cash. Close early October. Taking rest of year to pay off rest of debt. Do feel like I am running out of time
What’s a safe currency?
Ammo and skills ;-)
Wiggle - Vintage 1920s Broadway Jason Derulo / Snoop Dogg Cover
https://www.youtube.com/watch?v=pDl9SDd1FJY
“It’s just going to feel bad for the rest of our lifetimes - or until the USA falls”.
I think that’s the most realistic outlook.
Why? I’m not in debt, but if I was, I’d be able to pay it back in inflated dollars.
The Fed will raise the rates a week before Trump takes office, followed by a media avelanch blaiming him for the economic problems.
I would like to remind everyone that the Too Big to Fail Banking Legislation has already been passed into law, your money in the bank is not yours, the plans are already in place to pull a Cyprus or Greece. Our REPUBLICAN LEADERS made sure it passed, just can’t remember the name of the legislation.
http://freerepublic.com/focus/f-news/3227765/posts
WARNING Bank Deposits Will Soon No Longer Be Considered Money But Paper Investments
I’ve been saying for months that in 2016, the SHTF. There will be an economic collapse, and there will be social upheaval in Europe as people fight back against the “migrant” invasion.
Where exactly would you get those “Inflated Dollars” you are counting on?? The Bank?? HAH, that is THEIR MONEY NOT YOURS.
Expect to see the US elections canceled and Obama appointed world dictator for life in 2017!
I’m not “counting” on anything. And I work for my living.
Yellen has inherited a complete nightmare.
This is the only falsehood in the article, she did not Inherit this Mess, she was right there from the beginning planning stages until the day she assumed the position.
Good, just like they do in Venezuela! See how well it worked out for them.
She’s only been in charge of the Fed since 3FEB2014. The problems go back way before then. At least to 1995.
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