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The World Is Turning Ugly As 2016 Winds Down
by Brandon Smith
I have to say that the negative reverberations in our current economic and political environment are becoming so strong that it is impossible for people to not feel at least some uneasiness in their gut. I imagine this is the same kind of sensation many felt from 1914 to 1918 during World War I and the terrible birth of communism, or perhaps in the early 1930s at the onset of the Great Depression and the rise of fascism. Some global changes are so disturbing that they send shockwaves through the collective unconscious before they ever hit the mainstream. People know that something is about to happen, even if they cannot yet clearly define it.
At the beginning of August in my article “2016 Will End With Economic Instability And A Trump Presidency” I stated that:
“I believe a softer downturn will begin before the election (the U.S. presidential election) takes place, most likely starting in September. This will give a boost to the Trump campaign, or at least, that is what the polls will likely say. I would also watch for some banking officials and media pundits to blame this downturn on Trump’s rise in the polling data. The narrative will be that just the threat of a Trump presidency is “putting the markets on edge.”
Unfortunately, it would seem so far that this prediction was correct. Currently global markets have crossed into severe volatility with a vengeance after around three months of eerie calm. Why? Well, as I warned in the same article linked above as well as numerous others since the beginning of this year, the Federal Reserve is determined to continue raising interest rates into a recessionary environment as they almost always do, and equities markets addicted to cheap debt cannot tolerate even one additional rate hike from the central bank.
So far all evidence suggests that the Fed plans to raise rates again soon; I believe at the end of this month. The only seemingly “anti-hike” voice at the Fed so far has been board member Lael Brainard, but even her statements promote a false narrative that a America is on track to “recovery”.
Many normally “dovish” members of the Fed have openly suggested that now is the time to hike. Voting members at the Fed have been vocal about a shift in policy. The latest example being head of the Bank of Cleveland, Loretta Mester. She argues that rates have remained “too low for too long,” and rejected notions that lower rates are necessary to maintain stability.
Philosophers stone – selected views from the boat http://philosophers-stone.co.uk
Source: http://www.philosophers-stone.co.uk/?p=14265
