Fed's Decision to RAISE rates means CRASH is likely this Year! Why?

Our Fed is the Central Planner for interest rates in America and also the world (to some extent). All financial markets are now interconnected and what happen's in America will affect the world markets (in time). We live with digital money which can be increased with the click of a computer key and which also can CRASH in seconds when traders FLEE the markets for select SAVE HAVENS (gold/silver/oil/land). Our markets live off fear and greed!

Our electronic markets mean that computers rule over all prices and monetary events today. Computer trading produces price changes in seconds when investors trade money units for stocks and also when investors stop trading and seek safe havens for their prior investments. Fear is the key motivator for trades into safe havens and Greed is generally the motivator for trades into equity assets (like the stock markets). FEAR and GREED will determine when the next big change in our markets happens.

Today, Jerome Powell, announced that the FOMC (Federal Open Market Committee) decided to raise the Fed Funds Rate to a maximum of 5.25% (a 0.25 basis point increase). This change will play out over time but it will surely restrict overall liquidity in our markets and eventually create this market CRASH that I have been expecting. A crash could happen suddenly if traders (in mass) decide to exit the stock market and SEEK safe havens (like gold and silver).

As of today, the general markets are still not in a full FEAR mode. This, however, could change in a day if some major event sets off the FEAR emotion. FEAR and GREED moves our markets and so far it has been GREED which has won the day. This, however, could change suddenly. My sense is that FEAR is now growing in our markets and the decisions of our traders are trending towards SAFE HAVENS (as a result). The ultimate safe havens (based on financial history) is GOLD and SILVER.

Gold and Silver are physical metals which have been desired mostly when FEAR permeates the markets. Today, the trend is starting to move towards a FEAR mentality. Real estate is in trouble as these higher interest rates are slowing this industry down and price declines have started to emerge in many housing markets. My area of Arizona is starting to change and price reductions are witnessed regularly today in Tucson and Phoenix. I would expect this trend to continue going forward.

The big kahuna that is now emerging is a slow down in our commercial real estate markets. Office buildings are having high vacancy rates and new construction is declining. The same goes for most retail construction. This trend will grow in the coming months and then we could witness many bankruptcies and liquidations. I have witnessed this situation in past cycles where interest rates have increased. Housing and commercial real estate is in BIG trouble when the cycle changes (as it is today).

The Central Bank of American (the Fed) is now in total control over our interest rates. The decision of our FED is to slow down the economy and create a much lower inflation rate. Eventually, the markets will respond to this institution's control and we will witness a major change in the business CYCLE. Our FED rules over the American economy and this institution also influences all markets on our planet. A global recession is on the horizon IMO. After this event emerges the next event will be a global depression. 

Since our monetary system is now digital and it lives WITHIN our consciousness (as mere imaginary numbers) we will experience a major DEPRESSION at some point down the road. Money is an inner concept of our mind (consciousness) and this means that EMOTION (also an inner situation) rules over logic when push comes to shove. Once the CYCLE has finally changed to FEAR, then we will enter this depression stage IMO. Again, its FEAR and GREED which move our markets and which determine the ultimate outcome of these markets.

Watch the gold and silver markets going forward. Yes, these markets are manipulated by our financial authorities. They can suppress these prices to some extent with their computer trading gimmicks. But when most traders decide to FLEE the equity markets for safe havens (in earnest) then all attempts to manipulate the prices will prove futile. I think we are heading for this situation later in 2023. I do not think that this ASSET BUBBLE cycle can continue much longer. We have had some 14 years of asset bubbles (since 2009) and the END is on the horizon IMO.

Get prepared now for a coming economic depression (worse that 1929). It is likely to START some time in 2023 and continue for years. What we need is a completely NEW MODEL for our system of commerce going forward. Keynesian DEBT economics is essentially OVER. This model, which started in 1934 with Franklin D. Roosevelt, has run its course. DEBT is now beyond repayment and everyone with some understanding can sense this reality. You can see the numbers here: www.usdebtclock.org.

U.S. unfunded liabilities are now over $200 trillion. Our total debt is over $96 trillion. Our National debt is over $31 trillion. None of these obligations can be repaid by American production or economic growth. The Keynesian debt game is essentially over. The next CRASH will expose this situation as impossible to solve. Even the current DEBT CEILING situation exposes our debt situation as impossible to solve. Biden wants to IGNORE the debt ceiling and the Republicans in Congress want to reduce spending. But nothing will really solve our DEBT situation. America must eventually DEFAULT and then develop a NEW MODEL.

The entire financial HOUSE OF CARDS will come crashing down at some point future. My sense is that this event will start in 2023. Once the full CYCLE changes to FEAR in our markets, then this event will emerge for everyone to witness in real-time. FEAR and GREED are the motivators and the trend is now towards FEAR. Today's Fed Funds increase will bring more fear into our markets. The CRASH may not happen for a couple of months (maybe not till this fall). But the handwriting is on the wall IMO.

By the way, we have a new candidate for President by the name of Vivek Ramaswamy (37 years old) who understands our FED. This candidate seems to think that we need some type of new model for banking going forward. Will he challenge TRUMP and/or BIDEN agenda (he is running as a Republican) in this coming 2024 election cycle? Watch the debates later this summer to witness the thinking of this candidate on issues of money and banking. He seems much more knowledgeable then either Trump or Biden.

You can witness some of his thinking in this video:

Vivek is an American of Indian heritage. His intelligence is obvious to me. He needs to present his credentials to the American public in the coming election DEBATES. Listen to his viewpoint for his thinking on all the issues! His core message includes the original ideals of the American founders! I would like him to get some traction as the election cycle continues! He understands the role of our FED much better than any of the other Presidential candidates!

I am: Donald B. Swenson, Economist/Philosopher, donaldswenson.blogspot.com.

http://kingdomecon.wordpress.com