The Fed Rate Hike: the Torpedo is Launched

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The Fed Rate Hike: the Torpedo is Launched

Posted with permission and written by Bullion Bulls Canada, Jeff Nielson (CLICK FOR ORIGINAL)

Back at the end of 2008, in the heart of the crisis we now know as the Crash of ’08, Western central banks collectively engaged in perhaps the most extreme/reckless act in the modern history of our economies. They collectively took interest rates across the world to 0% or near-zero, and then held them there.

As has been explained to readers previously, such extreme interest rates are the economic equivalent of a defibrillator: a desperation-measure, intended to only be used as a Last Resort, and even then, only briefly. The cabal of Western central banks acknowledged this reality. All these central bankers promised – emphatically and unequivocally – to immediately normalize interest rates in early 2009.

Since then, seven years have gone by. During those seven years, not only have these corrupt central banks shamelessly (and recklessly) refused to honour their collective promise, interest rates have fallen even further, except in the U.S., which was already at 0%.

For seven years; the Federal Reserve has promised to raise interest rates “soon”, not to normal levels (as originally promised) but just the tiniest fraction toward normalcy. The Fed lied, serially: first Bernanke, and now Yellen. The Boy Who Cried Wolf was succeeded by The Girl Who Cried Wolf .

Even more perversely, during these seven years of lies, the Federal Reserve (and U.S. government) have continuously boasted about the “strength” of the U.S.’s Never-Ending Recovery . Forget about the fact that there was no recovery. For seven years; the Fed and U.S. government have also boasted about “10 million new jobs”. Forget about the fact that the U.S. economy has actually lost another 3 million jobs .

For seven years; the Fed boasted about a strong U.S. economy, yet still failed to honour its 2009 promise, even partially. For seven years; Fed money-printing and Wall Street gambling has pumped-up U.S. asset bubbles, yet the Fed has refused to dampen that bubble-pumping, by honouring its promise. Instead, B.S. Bernanke boasted on many occasions of the “wealth effect” that his reckless money-printing (and 0% interest rate) was having on U.S. markets.

As 2015 is at its very end, now, finally the Federal Reserve has acted belatedly to raise the U.S. interest rate, by the tiniest amount possible. And just look around the U.S. economy.

After seven years of bubble-pumping; we see the U.S. stock market bubble at an all-time high. The U.S. bond market bubble is also at an all-time high. This is supposed to be totally impossible . Everything we know about economics tells us that there could never be enough legitimate currency in any system to create a simultaneous bubble in stocks and bonds – when these are counter-cyclical markets. And both of these bubbles are much larger than at any other time in history.

Since bond prices are the inverse of interest rates; any increase in U.S. interest rates automatically drives-down the bubble-prices in the U.S. bond market. We have a term for this: KA-BOOM!

In Wall Street’s bubble stock markets; “margin debt” (i.e. leverage) soared 25% higher than any other period of reckless gambling, in the history of U.S. markets. Then the market turned. The U.S. stock market has already “rolled over” . Margin debt has now dropped by more than 10%.

What does it mean when the Fed chooses to raise U.S. interest rates after the largest stock market bubble in history has already rolled-over? We have a term for that, too: KA-BOOM!

Then there is the U.S. economy, itself. Assuming that Janet Yellen, and the rest of the Fed-heads can read, they know that the U.S. economy just experienced another catastrophic plunge in the U.S.’s once-traditional “Black Friday” shopping orgy. Assuming that Yellen and the Fed-heads don’t believe their own, phony “statistics”, they know that the actual drop in Black Friday sales (in real dollars) was roughly 20%, versus one year ago.

More importantly, there was a similar Black Friday (shopping) Massacre last year . In just, the last two years, actual retail sales during the Black Friday shopping orgy have fallen by nearly half, and now Janet Yellen is about to raise interest rates.

What does it mean when the Federal Reserve chooses to raise interest rates with the U.S. retail sector already in a Greater Depression , in a “consumer economy”? We have a term for that: KA-BOOM!

Then there is U.S. manufacturing…what’s left of it. Surely there must be some “strength” here, otherwise how could the Fed even contemplate raising rates? Wrong. U.S. manufacturing has already taken a nose-dive, too.

Just this week, two more disastrous reports came out. First there was the New York-based “Empire” manufacturing index. It reported the fifth, consecutive monthly contraction. This is five, straight months of manufacturing activity shrinking more and more, since all of these contractions are cumulative. The news was even worse in its employment reading.

Labor market conditions deteriorated noticeably, the data suggest. The index for number of employees was negative for the fourth consecutive month, falling nine points to minus 16.2. The average workweek index plunged thirteen points to minus 27.3, its lowest level since early 2009 .[emphasis mine]

Labour conditions in the U.S. economy are now as bad as they were immediately after the Crash of ’08, and the worst in seven years. Then, earlier today, it was reported that U.S. industrial output suffered its largest monthly plunge in more than 3 ½ years. Once again, this “bad news” comes on top of months of very weak numbers before this, cumulative declines.

What does it mean for the U.S. economy when the Federal Reserve starts raising interest rates with the U.S. labour market and manufacturing sector already experiencing depression-like conditions? We have a term for that: KA-BOOM!

It was bad enough when these criminal central banks took Western interest rates to near-zero, and froze them there – after vehemently lying to us that they “would never copy Japan”. That, in itself, was completely traitorous. But now we see something much worse. We see a group of financial psychopathsdeliberately choosing to raise interest rates, at (literally) the worst, possible time.

It is an intentional demolition of the U.S. economy, and all of its asset bubbles, and will very likely be extended (by the Big Bank terrorists) into another collective take-down of the global economy.

Of course, not everyone is going to suffer. Just look at 85 year-old, Warren “Bubbles” Buffett. He’s been playing the Wall Street game (with his best Friends) long enough to know how it’s played. He’s seen that the last two bubble-and-crash cycles which Wall Street has created before this were roughly eight years long.

Despite his advancing years, Buffett can still count to eight, and that adds up to a Next Crash in 2016 . This “investor” is currently sitting on more than 63 billion vampire-dollars, as he waits to feast upon the deliberately manufactured misery of others, again.

The $60+ billion which Buffett has pulled out of U.S. markets is the largest hoard of cash which Buffett has ever amassed, throughout his career as an “investor”. And when you’re 85 years old, you can’t afford to wait long to cash in.

The “fix” is in, and (as usual) the Federal Reserve is a central collaborator in yet another Wall Street market-rigging operation. You start with an economy which was already crippled. Then you force-feed roughly 50 times more capital into those markets than at any other time in history, naturally resulting in the largest and most-unstable asset bubbles in history.

These bubbles would, inevitably burst on their own – and soon. Indeed, the banking crime syndicate which regular readers know as the One Bank has had to use all of its market-rigging might to prevent these bubbles from bursting already. But that’s not the Script.

The Script, and the eight-year, bubble-and-crash cycle, call for the markets (and the economy) to be torpedoed at the end of the U.S. election cycle. This is necessary so that the outgoing half of the Two-Party Dictatorship can be fingered as the villain/scapegoat for the crash, with the previously-banished Party being forgiven, and hailed (by the media propaganda machine) as the White Knight riding to the rescue.

One would think that after several re-runs of this plot that those watching this Theater of Financial Crime would catch on to these regular, eight-year cycles. One would think that watching the Corporate media oligopoly collectively “surprised” every eight years would be viewed as suspicious, to say the least. Yes, who could ever predict that bubbles would pop?

One would think that the Criminals, themselves, would not have the audacity to use the same Script (with just minor plot variations) every eight years. But here we go, again.

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