Guest Post by Martin Armstrong
Sometimes you need to look behind the curtain before you understand the real trend. It is true that Federal Reserve officials are committed to fighting inflation and expect higher interest rates to remain in place until more progress is made, according to minutes released from the central bank’s December meeting. Also what has been reported is that at that meeting, policymakers expressed the importance of keeping the restrictive policy in place while inflation holds unacceptably high.
Now let’s look behind the curtail for just a peek. War ALWAYS impacts interest rates and they traditionally rise in periods of such conflict. After Europe kept rates NEGATIVE from 2014, that means every bond they sold for 8 years is now losing money. This was the bond crisis in London and then you had Janet Yellen come out and revealed the real silent worry.
Yellen came out and proposed that the Treasury buy in long-term debt and swap it for short-term. Some were out there claiming the Fed was competing with the Fed as a second central bank. That just illustrated how much they do not understand what is going on or even how the monetary system works. The proposal was NOT another QE. The Treasury cannot create money as can the Fed. She was talking about a SWAP because the long-term debt is in crisis mode with the coming war. Smart player was to swap that for the short-term.
China has been dumping bonds since late 2021 as Biden has been claiming the US will defend Taiwan. I can confirm that under EVERY possible military play, the US will lose. I have reported this before. The US cannot defeat China – PERIOD! With China now selling off US debt and shifting to gold, they are seeking to insulate themselves from any Western currency since Biden violated every international law to impose sanctions on Russia. China elected Xi Jinping because Pelosi when to Taiwan just before the election confirming that we are headed to war.
Against this backdrop, the Fed CANNOT lower interest rates. This is NOT 100% about inflation anymore. The Fed realizes that the Biden Administration is determined to create World War III. As we are heading into a war they must adopt a war posture as well. Hence, interest rates will remain firm because not just inflation driven by shortages, but by the fact that the long-term liquidation continues, and lowering interest rates would now cause a capital crisis when staring war in the eyes.
It is my sincere desire to provide readers of this site with the best unbiased information available, and a forum where it can be discussed openly, as our Founders intended. But it is not easy nor inexpensive to do so, especially when those who wish to prevent us from making the truth known, attack us without mercy on all fronts on a daily basis. So each time you visit the site, I would ask that you consider the value that you receive and have received from The Burning Platform and the community of which you are a vital part. I can't do it all alone, and I need your help and support to keep it alive. Please consider contributing an amount commensurate to the value that you receive from this site and community, or even by becoming a sustaining supporter through periodic contributions. [Burning Platform LLC - PO Box 1520 Kulpsville, PA 19443] or Paypal
-----------------------------------------------------
To donate via Stripe, click here.
-----------------------------------------------------
Use promo code ILMF2, and save up to 66% on all MyPillow purchases. (The Burning Platform benefits when you use this promo code.)
Hmm, interesting argument.
I still currently believe the Fed will “emergency-cut” rates around late spring, as otherwise the US housing and house construction markets completely implode.
We’ll see who is right.
The Fed will follow the market rates as always- rates are headed up long term though they may continue to moderate in the short term- take that to the bank.
Rrright, the Fed is a total hostage of “markets”
The Fed doesn’t care about the housing market or the stock market. It is a weapon of mass destruction.
I predict a barter economy is in our near future.
Yeah, I shoot you and take what I want. Mad Max style.
Who run Bartertown?
We all do(those who want to participate).
We set up security and if needed travel security for large sellers/buyers.
It really would not be that hard and we charge a small fee for the security services,this will all be voluntary and folks can do as they wish in a barter economy,this will though provide safe spots for economic activity.
As the corrupt cop/court/ prison system collapses thieves will literally be shot on site.
You give these people too much credit. They’re lunatics who want to crash everything down on purpose because that’s what their handlers are ordering them to do.
Maybe their handlers want war.
“The Treasury cannot create money as can the Fed.”
Oh really!!! Just how does the FED create money?
Cause they never have in the past.
Actually Powell admitted just as much on a 60 minutes spot. You can watch a slew of videos on yootube by John Titus that shows how the Fed has accomplished this feat. It has all be sleight of hand.
Operation Cloward and Piven.
The Bank Heist Division.
Bring on 15-20% for a couple of years. Then settle back to 7-10% an keep it there.
Of course that would require close to 99% of the US income to go to servicing the debt. So game over.
So instead? WW3. BOOM!