728x90 AdSpace

Latest News
May 21, 2015

Will A Fed Rate Hike Trigger Crash 2016?

Over the first half of this year; several trends (and schemes) have seemed to emerge, as the One Bank herds the West (and most of the Rest of the World?) towards another mass-shearing. Indeed, now that “bail-ins” have been rubber-stamped by all Western governments as the newest way for the banksters to steal/confiscate wealth; it appears we are heading for a final plundering of these bankrupt Western regimes, which lack the solvency to withstand another, dramatic financial shock.
However, up to this point; the “trends” have not seemed to be in-synch with one of the “schemes”. Specifically; it has previously been laid out to readers that almost certainly the Next Crash is already scheduled for 2016. We have two, strong reasons for adopting this conclusion:
1)  Staging a crash as ½ of the U.S. Two-Party Dictatorship nears the end of its term allows the banksters to use the old regime as scapegoat for the crash, while the other half of the tag-team plays the role of White Knight, supposedly “riding to the rescue” of the besieged population.
2)  In fact; this is precisely what the banksters did in their last, two manufactured crashes: after they blew-up their “dot-com” bubble around 2000, and when they detonated their housing-based bubbles in the U.S., in 2007-08.
Based on that previous template; we would expect this financial crime syndicate to detonate all its new bubbles (equities, bonds, real estate, and various other debt-bubbles) either towards the end of 2015, or early in 2016. But in contrast to that (apparent) scheme, we have had the recent trends which have been telegraphed to us by the Corporate media.
Yet again; the liars of the Federal Reserve have “promised” to raise interest rates, just as they have been “promising” every few months, since the beginning of 2009. However, “this time” (the media spin-doctors assured us) the Fed was/is serious: U.S. interest-rate hikes were definitely on the way, by June of this year, at the latest.
Thus we saw a disconnect between the (supposed) trend – raising U.S. interest rates by June – and the plan: staging the Next Crash at the end of 2015, or early 2016. The problem is simple: the teetering bubbles of the U.S.’s Ponzi-scheme economy are so frail, and so unstable that if the Fed began raising interest rates in June, there is no way this ticking bomb could avoid detonation before the “window” for the next, scheduled crash.
Now, however, we’re being told by the Corporate media that (yet again) the Fed is having “second thoughts” about a rate-hike in June. In fact, given the flip-flopping of the devious Fed-heads over the past 6 ½ years, it is more like their 22nd “thought” about raising rates. Now, suddenly (surprise! surprise!) the Fed-heads are looking at early, next year as “an appropriate time” to raise interest rates in the U.S.
Yes, if one is a psychopathic banker planning their financial raping-and-pillaging as all the carefully constructed asset-bubbles are simultaneously detonated; the end of the year is a very good time to raise rates.  Not only would it coincide with and facilitate the Next Crash that is already scheduled; it would precisely duplicate the last bubble-and-crash cycle, where it was Fed rate-hikes which were the (deliberate) “straw” that broke the (crippled) camel’s back.
We see consistency between actions and schemes: the puzzle-pieces now all fit together. This only leaves one more topic for discussion: the differences (if any) between the last bubble-and-crash cycle of the banksters versus the current one.
In fact; despite the similarities in the scheming, we do see a significant difference in the overall economic context. In the manufactured Crash of ’08; the bubble-and-crash cycle was primarily built atop a single, massive bubble: the ultra-fraudulent U.S. housing bubble, where tens of millions of fraud-tainted mortgages continue (to this day) to infest land registries across the U.S. In this respect; the Crash of ’08 mirrored the bubble-and-crash cycle before it, which had been based upon the banksters’ over-inflated “tech bubble”.
Conversely, as we move toward the Next Crash in 2016; this time we see a cornucopia of bubbles: stocks, bonds, real-estate, “student” and “auto” loans, etc., etc. etc. Why the difference? It’s because the U.S. economy of 2015 is so hollowed-out and close to disintegration that there isn’t enough strength in this economy to even inflate One, Big Bubble. Two charts demonstrate this point, in unequivocal terms. 

Both charts are familiar to regular readers. The first chart shows the Federal Reserve money-pump exploding into a hyperinflationary orgy of money-printing, literally dwarfing all other Federal Reserve money-printing over its entire, 100 years of infamy. The second chart shows the effect of conjuring all this funny-money: NOTHING. Zero. Nyet.
In the parlance of the charlatan economists; this is known as “pushing on a string”. The Fed has been force-feeding all its $trillions of “easy money” into the U.S. economy, yet the harder it pumped, the less “bang” it got for each buck. There are two reasons for this.
One reason is that most of these $trillions in worthless, Fed funny-money have been sequestered from the broader economy. Those $trillions have been funneled into the derivatives market, the One Bank’s private, unregulated, $1.5 quadrillion rigged-casino. Had even a quarter of these $trillions actually reached the real economy, the USD would have already (officially) been destroyed by hyperinflation. Sequestering those $trillions delays (but does not prevent) this cataclysm.
The second reason that Fed money-printing has done nothing to “stimulate” this economy is directly implied by the chart of velocity of money itself, and the observed phenomenon of pushing-on-a-string. This is a dead economy. Not only is it weighed-down by a crushing burden of debt (public, corporate, and private), but it has been warped and perverted through decades of malinvestment, primarily in the form of “defence spending” (grossly over-inflating the U.S. war machine), and “financial engineering” (grossly over-inflating the size of its financial sector).
This two-headed monster has one, fatal problem: there is now nothing supporting those two, huge, gaping maws. Neither defence-spending nor pumping-up these so-called “banks” to ridiculous proportions does anything to sustain the overall economy. Rather, both of these sectors are highly parasitic: devouring rather than creating economic resources. Any economy (even that of the “world’s only superpower”) can only devour itself for so long.
In this latest bubble-and-crash cycle (again centered in the U.S. economy); the One Bank had to pump-upevery asset class in sight, as hard as it could, in order to over-inflate this crippled behemoth to the point where a staged detonation could be both satisfying and enormously profitable.
Just ask Warren “Bubbles” Buffett. At last count; the old vampire’s hoard of cash exceeded $63 billion, more than the GDP of most nations, and much more than Buffett has ever hoarded before any of the previous, staged crashes. The Next Crash of 2016 is intended to be the last crash.
This may still leave one question in the minds of inquisitive readers. If all of this scheming is now crystallizing before us; why the “question mark” in the title of this commentary? There is a simple answer to that.
In the two, previous bubble-and-crash cycles manufactured by the One Bank (and its servants in the U.S. government), there were still embers of life in the once-mighty U.S. economy. Consequently, when it blew up those enormous asset bubbles, this produced genuine momentum – meaning there was real growth in the U.S. economy.
In contrast to that; in the pseudo “recovery” of the last 6+ years, even with “0% interest rates”, even with unprecedented money-printing, even with the banksters pumping-up anything and everything they could, there has been no growth in this Zombie Economy, just absurdly falsified “statistics” feigning growth.
When there was genuine momentum in the U.S. economy; the banksters needed some trigger for detonation, to not only stop all upward momentum, but to then reverse the economy into free-fall. In 2015; no such trigger is needed. With there being no growth, no “new jobs”, and not even the tiniest spark of life in the retail sector (of this consumer economy); there is no momentum to reverse.
The United States economy of today is so close to death that a cataclysmic crash could be generated through the Fed and the rest of the banksters simply ceasing their pumping. The Federal Reserve doesn’tneed to raise interest rates in order to give Warren Buffett his one, last opportunity to feast on the misfortune of others.
Because of this; the Fed-heads may just keep (publicly) dithering about “whether or not to raise rates”, right up to C-Day itself. The advantage to writing this into the last act of the Script is that it avoids making the Federal Reserve bankers (the most-treasured servants of the One Bank) at least the partial villains for the Next Crash, just as they were in the preceding crash.
In this Alternate Ending; nearly anything could be “blamed” as the trigger for the Next Crash in the propaganda of the mainstream media. As already noted; the trigger need not even be a financial event of any kind, since this crippled economy is ready to collapse under the weight of its own debt and malinvestment.
We know how this movie will end, with the U.S. economy totally collapsing, but all the bankers and Oligarchs “living happily ever after”. However there is still room for a final plot-twist. Will it be Fed rate-hikes which are blamed for the Next Crash? How about another false-flag event, courtesy of some Terrorist Boogeymen? Or, will some other economy be blown-up, at which point the “sudden” and “surprising” collapse of the Mighty, U.S. Economy would be blamed on the good, old “domino effect”?
Only the bankers know for sure  
Source: Sprott Money News   
The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters. © EconMatters All Rights Reserved | Facebook | Twitter | Free Email | Kindle
  • Blogger Comments
  • Facebook Comments
Item Reviewed: Will A Fed Rate Hike Trigger Crash 2016? Rating: 5 Reviewed By: EconMatters