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What Happens When Yellen Raises Rates?
"The world's central bankers will print until deflation gives way," warns Mike Maloney, "they have the arrogance to just think they can control it." They can't. With Janet Yellen on the verge of what many believe will be a policy error in the face of overwhelmingly weak data (and global turmoil once again), it’s never been more important to understand the limits of how much 'actual' control the central banks have over the economy. There’s one force moving our economy they can not influence, and Maloney explains it in this brief clip...
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Ummm.......high yield doomsday device ticks to zero?
Plus trillions in student debt and subprime auto loans plus a a lack of good paying jobs and a surplus of part time jobs w no wage growth combined w terrorist attacks and potential war. Yea the world economies are moving toward or are in recession.
Add a massive population migration placing an unsustainable strain on the welcoming welfare-nations, the world is hurling towards a massive cataclysm. You are already seeing the reaction with another Trumpism.
Turkey is doing its best to start the next world war.
Putin is playing the chess game of the century against the globalist elite. One can only hope the populations of the captured nations rise up and demand their governments stop committing atrocities, backing and incurring terrorism domestically and abroad, before their follies indeed lead us to war. However, it seems the globalist a want war to reset the global financial cluster fuck they've created.
I enjoy listening to Mike Maloney on YouTube - excellent videos.
I like MM too. He's a smart guy even with debilitating dyslexia.
Fiatquake?
Yellengeddon?
Who gives a fuck, really? I can't do dick about this, you can't do dick about this and most of us are just at the fucking mercy of these people.
So I buy a little silver, a little gold, some ammo and a gun for the missus. And while I wait I get firewood stocked, drink beer watching football with my sons and travel when my wife gets the wanderlust to roam.
Bring it on because I could give a shit what anyone says at this point. Raise rates? Who fucking cares. Negative rates? Who fucking cares. When the shit hits the fan I will remember the past 4+ years of conversations here and affect what I can in the future. Bt for now I could care fucking less.
Peace.
ZH OD
Just a bad fucking day, topped off with this never ending fucking drivel about the white haired Romulan exploding the world.
There are days when I fantasize about knocking the shit out of some of these fucking greedy assed motherfuckers.
Totally agree. Why anyone would downvote you for being sincere and wearing your heart on your sleeve is beyond me.
Just a bad fucking day, topped off with this never ending fucking drivel about the white haired Romulan exploding the world.
There are days when I fantasize about knocking the shit out of some of these fucking greedy assed motherfuckers.
Just closed on the most perfect 40 acres/house for bug out. Rolled in a 20 foot stocked with supplies trailer after the close. Flowing creek, nut trees, rows of berries, three stocked pounds. House sits on high ground and is the terminus on a narrow lane. Lots of deer.
That is what I am doing.
Bought it for a song and dance, liquidated stocks and converted all of the subsequent fiat into tangible assets. Total of twelve people will live there at SHTF doomsday. Every person shoots well and has individual subject matter skill expertise.
I sincerely hope I never have to use it, but I view it as a damn good hedge on all of this insanity
RAT KIKE DECISION! RAT KIKE DECISION!
"What Happens When Yellen Raises Rates?"what will happen if you load the gun point it at your head and pull the trigger?
It bears repeating that interest rates in the early '80's were in the double digits. That fact that the Fed today acknowledges that raising rates from negative (in inflation terms even as measured by the Fed) to slightly less negative is a big deal, says a lot. The fact that intelligent people think it may cause a major correction in market bubbles tells us whatever else we need to know.
It doesn't fucking matter at this point, like flapping your fucking arms after you get pushed off the cliff. Sure, it might a millisecond or two of life for you, but in the end you're a fucking pile of blood and bones when the trip ends.
There is nothing that can be fucking done except enjoy your time while you can.
There is a lot you can do. For one, think of your posterity ..
Otherwise, people like you should just STFU!
https://app.box.com/s/hfgvcqg7gqh7i27at6sv53ywu87lwarp (Read Me First)
16+ trillion in overseas dollar reserves flood the US looking for yield causing currency velocity to explode
China - still piling up physical gold. The US? Selling physical gold. US paper backed by???
backed by your avatar
Backed by false flag bullshit and threats.
Backed by your posterior. Bend over Bitchez!
"A gift to Wall Street..." Yup, on purpose like.
Punish savers on Main Street, reward Wall Street.
Painted into a corner, only way out is to crush retirees and pensions, more bailouts, more QE.
Who is going to stop them? Only a Wiemar style hyper-inflationary event, or WWIII.
WWIII stops everybody.
+1. WW3 stops everybody. We been barreling down a road, defending the dollar with undeclared wars, now the dollar is rising, EM debt is exploding, EM finally get just "fed" up (sorry for the pun) next thing is WW3, you can just feel it.
Apparently Syria is where some countries have decided to make a "stand"
Negative rates is "bankers breathing through their assholes" - Jim Willie
Rate hike declaration war on EM debt and default central.
Either way dollar death don't matter.
How come everybody is so certain the fed will raise rates? Haven't they been saying that for months now?
Federal funds futures are pricing in an 80% chance right now that the Fed will raise rates. Those implied probabilities were healthily under 50% for the last few FOMC meetings.
Wed, 02/24/2010 - 11:21 | 243096 Mako'As long as you guys continue to use compounding interest you will get a balloon payment at the end, last one cost 100+ million lives this one will well north of a billion or two.
Why let this one collapse when the function of the system is to expanded as far as you can? The markets will work and liquidate the unfunded liabilities, no need to worry there.
The whole system is a fraud and has been since the beginning, now as it is starting to collapse you see the fraud, what do the stupid humans want to do .... well start a new system just like the old system.
Unless you have unlimited power this system and any other system you build on compounding interest will end the same way... liqudation of the unfunded liabilities (humans).
And no PEs will not stop at 6 or 8 this time, a full on liquidation this time folks, last time it was Europe and parts of Africa and Asia, this one will be the whole enchilada and we have become very effective at liquidating since the last one.'
http://www.zerohedge.com/article/guest-post-if-i-were-federal-reserve-ch...
That's creepy as shit...
Whole new view of the "Big Bang Theory" and expanding universe.
Maybe, but in this case the system would freeze within 24h max and not reopen until the new system - whatever that may be - is in place and 99.99% of all paper "wealth" gone "poof".
LOL! They are out of their minds if they think that because they own a printing press they can contol the world. LOL!
"The Fed cannot and will not ever raise interest rates."
It seems to me whatever they do with rates is somewhat inconsequential as the die has already been cast. The problem is mal-investment due to historical low rates, in the stock market, housing market and commodities infrastructure. Unless the price of oil goes back over $90 and the price of copper doubles, this investment is unserviceable and the house of cards collapses.
We are not likely to see commodities increase in price anytime soon given the oversupply and lack of demand. What is the leverage rate on stocks? How many condos can we build, and who can afford to live in them?
So raise rates or go negative, this cannot change the ability to service these debts. And the price of this debt will crash and the ripple thru the over leveraged banksters will be felt by everyone.
Count the days, months or years for the bomb to explode, but explode it will.
sschu
The problems is that there is no right answer, there is only wrong ones, rising rates is wrong, mantaining them is wrong and lowering them is also wrong, the right answer was supposed to be given 6 years ago, now is just a matter of how long is this going to last until the ship sinks
The answer is a US Military coup and restoration of the Republic; a difficult path, but if everyone works together and focuses on helping each other it could work, but I am afraid people will not be able to depart with their smart devices for more than 2 minutes. We could separate into blue and red states and use HAARP to put all the industrial pollution from real working factories and blow it over and sustain it over the blue states...just a useless thought...another useless thought.
The only known solution that ever worked is a recognition of our rebellion against Jesus and repentant on our knees and beg for forgiveness, confess our sins & acknowledge Him for who He is and He would gladly kill off our enemies and restore the nation...He really would do that and that is more difficult for people than to become radicalized Muslims.
You read The Next Right Step?
The right answer is that real money is too cheap right now, but this IS their exit strategy... In the Keynesian mindset a devaluation of the EURO is a lower EuroUSD exchange rate, when this is all just paper. Devaluation will come against real money, which right now is traded 300:1 paper to fizz, with unlimited paper supply to meet whatever paper demand there is, setting the "price" for the real thing, for LOL. A historical bottom is in the making.
''The problem at hand is a monetary system where virtually all money is loaned into existence with interest attached. There isn't enough "money" in the system to pay back both principle and interest, so the system must issue more debt... at all times, or face cascading defaults - Collapse. It's how the system was designed. Government debt is just one piece of connected equation that requires that aggregate debt grow at all times. The exponential function tells us that this can't be sustained. That which can't be sustained will collapse. ''
The gov't debt is a red herring... it's 3-card monte. Our focus is trained on it so that the banking oligarch can pin the blame on something other than the system itself. ''
http://www.zerohedge.com/news/2012-10-02/bill-gross-us-debt-meth-addict-...
Dear Mikey:
Arrogance has nothing to do with it.
It's fear of heights.
plain and simple.
Is this ol' Yeller's favorite song (^; https://www.youtube.com/watch?v=nvlTJrNJ5lA
If they raise rates, it will be extraordinarily brief and reversed in a panic.
Check out Uncle Rastus trying to tell a guy like Maloney what is what... another uppity clown, probably on welfare, with a degree in sanitation engineering.
The demand for US Treasuries is depleting rapidly at a time when the Fed needs to have demand increasing. Looking at the oil market, $100/bbl oil at 80 million bbl/day the demand for US treasuries was $8 billion/day or $2.92 Trillion/year. At $30/bbl that demand is $.89 Trillion, and that is where the price for oil is heading.
When you consider that all commodities are traded in US$ and all commodities are falling rapidly, the demand for US Treasuries in world trade will drop considerably. Factor in the Chinese et al, whom are removing the $US from as many transactions as possible, and selling USTs at increasing rate. The Fed has a problem that will not resolve itself without a major dislocation, and will damage the holders of these toxic debt instruments, which all Central banks are. The Fed's balance sheet contains $4 Trillion in UST and climbing, and they are supposed to be lender of last resort?
Ole Yeller better be able to lick her privates, as she is going to have to kiss her ass goodbye at some point, because the deflating price of commodities is telegraphing the death of the $US.
That is where the naked short selling of US Treasuries have been taking place at the reverse repo window; JPM sells Treasuries they do not have and the FED winks and gives them dollars with interest.
Sure would like to be able to understand the Reverse Repo-IOER corridor component of the Fed's rate hike strategy and the excess liquidity. Maybe a Maloney graphic / Bawerk analysis?
J.P. Morgan analysts wrote that the three best leading indicators for recession have been credit spreads, the shape of the yield curve and profit margins.
Here are some signs of a coming recession.
1. Investors in high-yield bonds are expecting to see their first negative return since the start of the credit crisis in 2008.
http://www.marketwatch.com/story/deteriorating-junk-bonds-flash-warning-signs-for-stocks-2015-12-07?dist=afterbell
2. Factory orders continue to drop
http://www.zerohedge.com/news/2015-10-02/us-factory-orders-flash-recession-warning-drop-yoy-10th-month-row
3. Default risk spikes
http://www.zerohedge.com/news/2015-10-02/us-financials-default-risk-spikes-2-year-high
4. M&A set record
http://michaelekelley.com/2015/05/29/mergers-and-acquisitions-set-record/
5. Iron ore prices tumble
http://www.marketwatch.com/story/iron-ore-prices-keep-crashing-adding-to-global-growth-fears-2015-11-30
6. Baltic dry shipping index tumbles
http://www.marketwatch.com/story/shipping-index-falls-to-all-time-low-stoking-fears-about-global-growth-2015-11-19
Here is how to prepare.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Here is how to get your mind off this stuff.
http://michaelekelley.com/category/humor/
Good luck!
They won't raise rates by more than .15% unless they plan on imploding the derivatives market followed by the rest of the world markets causing so much chaos so suddenly that people will have nothing to loose and wreck the infrastructure and kill each other and then it begins to get real bad.
Not to mention the exposure/insolvent of the all the very large banks; a real money grab with bail-in laws in effect. They keep your money and you get worthless bank stock...been in the plans across the globe and played out in Cyprus and Greece.
Perhaps that is the plan, but I do not think so yet. I say the largest, in USD terms, short squeeze is being set up here. All the "don't do it", "don't do it", "they are going to do it" - "oh no', then they don't do it, but everyone is caught on with their shorts down...pun intended.
If they do that then that's how their taxes will get paid...in said worthless bank stock.
When she takes rates higher
Banksters start falling lower
(20 stories & more)
Everybody claims that ZIRP has been mainly for Wall streets benifit.....Personally, I think its been mainly to fund government borrowing at all levels, Federal, State, Local.......So a rise in interest rates would be detrimental to every government that keeps rolling over their bonds, and borrowing more.....Higher interest rates would make life a lot more expensive for the overspenders in government......And since Yellon is a political appointee of a big government president, I can`t see rates ever rising before the next election.....I would not be surprised to see some false flag problem arise just before the Wednesday decision, that would cause the FED to stay at zero....And the closer that day comes, like a Donald Trump comment, the hysteria levels will be promulgated by the welfare warfare state media about how the sky will fall, with a rate hike......So I would not bet the house on a rate hike.....But, if it does happen, you can bet the plunge protection team will be in full buy mode........
Euro rates negative. Swiss rates negative. FED rates will follow suite (eventually) or financial and economic implosion that is already well under way on a global scale will accelerate. Nothing left but bad choices now. Good luck to all.
Do you still think you can control them?
https://youtu.be/FN7r0Rr1Qyc
https://youtu.be/KTsg9i6lvqU
Slightly OT but of interest to some ZH members...
Bitcoin founder raided by Australian Police
http://www.msn.com/en-us/news/technology/australian-police-raid-sydney-h...
When it all goes belly up, wait for the following excuses:
'What choice did we have?'
'Nobody could have seen it coming.'
So a serious question here now. Would anyone here on teh Hedge, given they were chosen for jury duty in a case where a man offed a TBTF WS Bankster after having lost everything as a result, unilaterally, of what the FedRes and their member-owner TBTF WS Banks have over course of last 8+ years stolen and condemned to No Jobs eCONomy as a result of massive capital misallocation into Corporations that were created and wholly-owned and controlled by said TBTF WS Firms - particularly in US Public Oil as Portfolio Cos that flooded teh world with Uneconomic Shale Oil and other commodities directly and solely the result of the direct access to infinite supplies of free taxpayer monies these TBTF WS Portfolio COs had at the Discount WIndow - vote to convict this man who offed said TBTF Banker?
I would not and I mean that in all sincerity. I would not even lilsten to the contrived evidence as i've lived it for 8+ years now and i don't need some fucking lackey trying to re-write history in a veiled attempt to convince me to deceive my own eyes and ears. It's called Jury Nullification and while the Criminal US Court Justices like to brow beat we plebs, it is perfectly legal to discuss it wiht your fellow man and Juror. The damage these thugs have done to generations of Citizens is beyond disgusting.
When enough 'Muricans begin to act in this fashion, and allow it to spread to the District of Criminals and the US Supreme Court of Constitutional Usurpers instead of focusing upon convicting that poor schlep who stole $20 Bucks or was smoking weed, this Country might have a fucking chance.
The pussyfooting around teh subjects certainly has done nothing but assist in concealment of the Big Frauds and Thefts and Condemnations to utter subsistence living conditions these thugs have bestowed upon the World for their ill-gotten thefts.
Much simpler to state that you will NEVER convict anyone of anything in the current system of so-called 'justice'.
Since the system is corrupt, there can BE no 'case' made by any prosecutor against anyone, for anything. Anything they provide must be assumed to be tainted, fruit from a poisoned tree.
Just let them know that when they send you the jury notice. And stick to your guns, because they will try the "What about a child molester, rapist, terrorist, etc?"...You tell them that because their system has been corrupted, any so-called 'evidence' they may provide cannot be trusted, and that you would have to disregard it all in your deliberations. Only that which you have witnessed with your own eyes could be used, and you did not witness the 'crime' in question.
Saying you're going to raise rates and actually getting the market to respond to that are two different things. Say she offers collateral at 25 pts. What if there are tons of buyers, but, not enough collateral? Would the market continue trading that collateral thus increasing price and lowering the yield? Just thinking that it may not be as easy for her as pundits think.
Civil War was the "best" war for USSA's necromongers to date; the most expensive and destructive. Forget about fighting real countries with real armies like Russia and China after all Pentacon Kill Industries' lost judaic bouts of global genocide...the solution is here in the USSA. Get rid of all the crappy infrastructure, crumbling, shoddy, empty malls, inner city drug-infested ghettos and of course excess lumpen.
Onward to the last food stamp!
Interest rate rises causes inflation
Typically there is a time lag of a year or so.
Usury costs are reflected in total costs
Problem is we cannot afford present costs of the production distribution consumption system.
Liberals aren't just in the government, they ARE the government. And the one absolute truth about ultra-liberalism is that it is always ultra self-destuctive. The problem is that when they have the power and are at the helm, they also sink everyone with them. This is inevitable unless the (hopefully)soon-to-be president, Donald Trump is able to stop them from imploding the entire world economy and using that as a pretense to start WW III.
Interest rates are somewhat of a fraud to begin with (loaning into existence the principle but not the interest), then add some 500T of interest-sensitive derivatives on top of a global debt bubble (housing, students, governments, cooperate, municipal, credit cards etc) that uses itself bonds and other mostly interest rate depedent a$$et$ on top of that (in a self-interdependent deathly way) and TA-TAAA... Raising rates will cause a royal screw-up, while not raising or lowering rates (status quo) is equally gloomy, as the economic implosion is gathering momentum...
Are the 0.01 % properly positioned ?