Friday, December 18, 2015

Fed Rate Hike Disaster

On Wednesday, the Federal Reserve, under Janet Yellen, raised interest rates 25 basis points, or 0.25%.  This was a move to maintain some semblance of credibility.  The financial system, burdened by extreme levels of debt, cannot sustain higher interest rates.  We will never see interest rates normalize again, not without an implosion of the system.  Interest payments on trillions in debt cannot be made under higher rates of interest.

Some commentators, such as Peter Schiff of Euro Pacific Capitol, believe that the Fed will be forced to reverse course and ultimately push interest rates into negative territory.  Given that the Dow has fallen over 650 points from its initial rally on Wednesday, this scenario may come to fruition in the near future.

The insanity of a handful of unelected academics ruling over our monetary policy, controlling our money and hence our lives, cannot be communicated.  If more people only understood their enslavement, it would come to an abrupt end.

While mainstream pundits maintain that the economy has recovered, all objective indications say otherwise.  Velocity of money has been tanking for years - indicating that money has not been circulating throughout the economy.  People have no disposable income left - they use it all to pay down debt.  See for a breakdown of all kinds of debt, from personal to national.

There are so many indications of the global financial and economic system melting down, they will require several posts to cover at full length.  In summation, a few of the more important include the price of copper tanking (dr. copper, as it has been referred to), world trade collapsing, global stock market indices falling, a high-yield bond market meltdown, multiple potential catastrophic defaults akin to a Lehman Brothers moment, and the list goes on.

These events will provide plenty of material for discussion in further posts.

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