CNBC: Almost five years ago, in May 2014, when he was setting the scene for the biggest asset bubble trap in history – trap because his own policies made it impossible to undo the Fed’s monetary policies without bringing the entire financial system crashing down – Bernanke uttered what was very unwitting gallows humor, when he said that he does not expect the Fed’s interest rate to rise back to its 4% average during his lifetime.
In retrospect, he was right because just a few years later, with the Fed Funds rate at 2.50%, the Fed realized that any further hikes would crash the market, which was already on the verge of a bear market, and as a result Fed Chair Powell put the Fed’s rate hike strategy on hold.
Now, five years after Bernanke’s infamous statement, Trump’s top economic advisor Larry Kudlow has done Bernanke one better, and during an event in Washington, said that he does not think that rates will go up ever again, “maybe never again in my lifetime”, effectively admitting that the US economy is on the verge, if not in, a recession (either that, or giving a pretty dire prognosis of his own health).
Finally, confusing the hell out of anyone who is not yet proficient in Erdoganomics, i.e. “economics for insane people“, Kudlow added that the economy is so strong that the Fed should cut rates immediate by 50 bps. Because obviously that makes sense. more …
Opinion: The conundrum:
When a nation’s economy is strong, the central bank should gradually raise interest rates to slow borrowing and avoid inflation.
When a nation’s economy is weak, the central bank should lower interest rates to increase borrowing to avoid a recession.
When a nation’s economy is strong, and the central bank lowers interest rates, something is terribly wrong.
When a nation’s economy is strong, and its leaders call for printing money, there is something the leaders are not telling us, or they really haven’t got a clue.
Example: In 2007 Fed chief Ben Bernanke said this: “Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited”, right before the biggest housing crisis in history, that almost bankrupted the world.
So what’s it going to be:
- Student loan crisis?
- Pension crisis?
- National deficit/debt crisis?
- Shadow Banking (non bank lenders) crisis?
- Unknown crisis?
What is really scary is that if the Fed institutes QE4, and prints another $4 trillion, we could see another massive boom in equity prices based on a sugar high of counterfeit dollars. If that happens, the secular world may never see the final collapse coming. Hyperinflation happens suddenly.
Keep in mind Revelation 6:5-6, 13:16-17 are preceded by Revelation 3:10, 4:1.
(see Two Trains chapter 3 here)