A TECTONIC shift has begun in the markets, if they no longer respond to the Fed's efforts to boost them, then it is GAME. SET. MATCH. for the Fed and its policies.
In short, the next round of the great crisis is beginning. It will take time to unfold, but we have reached Peak Central Bank Intervention. When Central Banks loosen policy and the markets fail to respond, you're in the End Game.
The Fed is truly cornered. If it fails to hike rates it will have no ammo for when the next crisis hits the US. But it if hikes rates now while the economy is so weak (more on this in a moment), it’s likely to kick off or deepen a recession.
The idea here is that since it costs relatively little to store physical cash (the cost of buying a safe), the Fed should be permitted to “tax” physical cash to force cash holders to spend it (put it back into the banking system) or invest it.
Behind the veneer of “all is well” being promoted by both world Governments and the Mainstream Media, the political and financial elite have begun implementing moves to prepare for the next Crisis.
At the end of the day, the Fed has failed to implement any meaningful reform. The very issues that caused the 2008 Crisis (excessive debt, particularly in the opaque derivatives markets) are at even worse levels than they were in 2008.
The Fed likes to act as though it’s concerned about stocks… but the real story is in bonds. Indeed, when you look at the Fed’s actions from the perspective of the bond market, everything suddenly becomes clear.
Billionaires like Warren Buffett make fun of Gold, while ignoring the fact it has outperformed stocks ever since it was de-pegged from major currencies in 1967. This is part of a larger War on Cash implemented by the Central Banks.
Even when a bubble was both very specific AND obvious,the collapse was neither quick nor clean. There were several large 20%+ crashes, but overall, it was a roller coaster with jarring rallies that gradually wore its way down.
This is just the beginning. As Central Bankers grow more and more desperate in the coming months, you’ll see more and more calls for extreme measures such as banning physical cash or imposing a “carry tax” on those who remove cash from the system.
