The stock market finished last week with more selling than buying, as the Federal Reserve starts to hike its rates and according to Peter Schiff, the United States is heading towards more inflation and a hard recession.
“And in fact, if you look at the yield curve, the yield curve is actually flattening because investors are actually starting to price in the recession that this hawkish Fed is going to cause by jacking up interest rates.” Schiff said.
“This has barely begun to set in on Wall Street. When more and more traders grasp this reality, there’s a lot more downside in stocks. But more importantly, if the Fed acts to stop the carnage on Wall Street, there is way more downside in the US dollar, way more upside in gold.”
“So, the Fed will actually be further behind the curve when it gets to 2.5% than it is right now at zero. It’s because moving so slowly allows inflation to accelerate. Because the entire time the Fed is hiking rates, it is still pursuing an expansionary monetary policy.” He added.
“In other words, the Fed won’t fight inflation with tight money, but simply making money less loose will be enough to tip the economy into recession, and the recession will fight inflation. Because the conventional wisdom is if we have a recession, that is going to reduce demand, and that is going to bring down the rate of inflation. So, that’s what the markets are counting on. It’s not the Fed that’s going to fight inflation. It’s going to be a recession.”
“The recession is the cure for the mistake. The mistakes were made a long time ago. The Fed continues to make mistakes in raising rates too slowly, not because faster rate hikes will cause a recession, but because they’re trying to delay the recession because the recession is the cure. But the problem is the economy is so sick, we can’t survive the cure.”
“When the Fed has to start taking back whatever rate hikes it managed to get in, when the Fed has to go back to QE, the bottom is going to drop out of the dollar.” Schiff concluded.
According to The Federalist, indicators show that America is potentially heading for the worst crash in the real estate market history.
A huge price bubble has formed and is set to burst with rising interest rates.
“Although it’s impossible to predict economic crashes with certainty, a key economic indicator suggests the U.S. housing market is on the verge of an unprecedented crash, one that could end up being the biggest in America’s history,” the piece by Justin Haskins begins.
Haskin noted that since the last real estate crash in 2008, there was a huge effort to inject the financial system with new money by Congress, the Fed, the outgoing Bush Administration and the Obama Administration. The economy was propped up with stimulus checks, welfare programs and government takeovers to stop the economy from completely tanking.
Haskins notes further:
One of the primary tools the Fed used to accomplish its goals was to keep interest rates at near-zero for years on end. From 1980 to 2000, the Fed’s federal funds rate — the primary driver of interest rates economywide — rarely dropped below 4 percent, and it was common for interest rates to be 5 percent or higher.
However, from 2009 through 2016, interest rates were consistently much lower than 1 percent. Beginning in 2017, the first year of the Donald Trump presidency, the Fed began to more aggressively raise rates, but it only briefly topped 2 percent in 2018 and 2019 before the Fed once again slashed rates to near-zero as part of its plan to address the effects of the Covid-19 lockdowns.
“As a result of these policies, a shockingly large price bubble appears to have formed in the real estate market,” Haskins points out.
“The average sales price of a home in the fourth quarter of 2021 was $477,900, compared to $403,900 in the fourth quarter of 2020 and $384,600 in the fourth quarter of 2019. That’s a $93,300 increase in just two years, by far the biggest increase ever recorded in just 24 months,” he writes.
“If we see a similar pattern emerge for the bubble that has been developing since roughly 2012, then we could see housing prices drop by 30 to 40 percent over a two-year period,” he writes.
“Regardless of what the Fed does in the short term, it’s clear that America’s disastrous monetary-policy chickens are coming home to roost. Prepare accordingly,” Haskins warns.
Jamaica is taking matters into its own hands by planning on launching its own e-currency. The country’s central bank currency is called Jam-Dex, carrying with it, the tagline: “No cash, no problem.”
The country’s CBDC is called the Jam-Dex and it carries with it a tagline as relaxed as the nation’s reputation: “No cash, no problem.”
Jamaica rested out their currency in 2021 and it will be launched nationally this year, according to Prime Minister Andrew Holness.
The Eastern Caribbean and Bahamas have already launched central bank digital currencies of their own.
Ten ways you can protect yourself in an economic downturn:
1. Grow your emergency fund – savings can help you out in a jam.
2. Make a budget and stick to it.
3. Maximize your purchasing power – look for the best deals for utilities etc.
4. Choose the right banking account to avoid unnecessary fees.
5. Protect your money from inflation.
6. Plan for rate rises.
7. Don’t keep more in the bank than you’re willing to lose – keep some cash on you, have quick access.
8. Overpay your mortgage where possible.
9. Read alternative media to know what the Globalists are up to – they affect markets too.
10. Invest in supplies.
Thanks Joe Biden for bringing America into a Recession ! Why am I Not Surprised ?
Thank you DUMB DUMB Biden for the mess that America is facing, not only biden and all the dumb Demoncrats. He slashed everything when he went into office and carried Obama with him. God have mercy on America.
You have told us nothing. Just a few meaningless platitudes