Today, I’m going to show you exactly how the United States Federal Reserve will cause the next global recession.
On Wednesday, Fed Chairman Jerome Powell did what he does best, by essentially saying a lot of words that meant nothing at the latest highly anticipated “Fed” meeting.
Long story short: He said that the Fed would like to raise interest rates and sell off part of their balance sheet starting in March if he thinks the market could handle it then…
Since only time will tell the market conditions in March, Powell has essentially backed the Fed into a tricky corner where he’s forced to talk hawkish while simultaneously forced to act dovish to keep the entire asset bubble charade going.
I could very easily see the market selling off heavily in the weeks leading up to this meeting. If that happens, I don’t expect the Fed to raise rates.
But if the market makes it in-tact to March, and the Fed does rates raise for the first time in six years…
Then you can bet the next Recession is underway.
Here’s why…
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It’s so simple and obvious what’s going on here.
The Fed can only raise rates to INEVITABLY cut them again when the market corrects…
It’s a sick joke, full of manipulation, people. We are SO far from free and open markets and in my humble opinion, it’s impossible to get back there with all the power the Fed has over the global economy.
The Fed says they want to raise rates 4 times this year, presumably by 0.25% each time.
We’re currently in the 0-0.25% range.
But as soon as we hike just one time to 0.25%-0.50%, we’re effectively doubling where current rates stand.
In a “normal” interest rate environment where yields are much higher, a 0.25% increase would have little impact on the market.
But we’re far from normal right now… And see, that’s the problem.
If the Fed is actually able to raise rates four times this year from 0-0.25% all the way to 1-1.25%, they will effectively more than QUADRUPLE current rates.
The economy is not strong enough to handle a quadrupling of interest rates and most investors are catching on…
That’s why I highly doubt the Fed will be able to reach its lofty four-rate-hike target…
But if it does, it’s almost certainly going to crash the economy.
See, that’s all we’re doing here: Raising rates just so we have room to cut them again when the market inevitably struggles from the pace of increase…
But the problem is, we won’t have enough room to cut without going negative…
Don’t think it can happen? Look at what’s going on around the rest of the world…
If we’re at -1%, that means other countries will be even more negative than us…
We’ll still be the strongest relative to the rest of the world… But who’s going to be buying these bonds yielding NEGATIVE interest rates?
Not me. And I hope it’s not you either…
Yeah, that’s right. The Fed is going to be forced to be the buyer of last resort on these trash bonds.
If you thought we’ve already seen peak monetary expansion (where we increased the money supply by ~33% last year) think again.
This is the end of the Keynesian Monetary policy experiment as we know it.
More money will be printed than ever before in order to buy back these negative yielding bonds.
And there’s one thing that is clearly going to attract the more dollars than any other asset in the world as this giant Keynesian monetary policy experiment comes to an end…
Bitcoin.
See, there are over $300 trillion in bonds right now around the world. $20 trillion of that is in negative yielding debt… And Bitcoin is a $688 billion asset with a limited supply that cannot be altered.
Fiat inflation is here to stay and it’s going to get worse. The price of everything will continue skyrocketing in fiat terms.
But in Bitcoin terms, everything will get cheaper.
That’s why all investors should consider buying as much Bitcoin as they can afford every day, dollar cost averaging as you go.
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