What is Janet Yellen thinking?
The Yellen Fed raised interest rates again in December 2016.
More than this, Yellen has promised the Fed will be raising rates THREE times in 2017.
This is astounding when you consider that the Fed is promising this at a time when the $USD is at a 13-year high.
Janet Yellen is playing a very dangerous game here. There is simply no logical explanation for what she’s doing here It’s madness.
A strong $USD hurts:
1) Corporate profits (47% of corporate sales from abroad).
2) GDP growth.
3) Bonds (debt deflation).
4) Mortgages and home refinancing.
5) US manufacturing.
Indeed, there are few if any benefits to a strong $USD in the current fiat, debt-based monetary system the Fed is managing. Pushing for three rate hikes with the $USD at 102 is like pushing your friend to drink three more beers when he’s already got alcohol poisoning.
Moreover, the Fed tried this whole “we’re going to raise rates 3-4 times in the next 12 months” scheme just one year ago. That triggered a 10% drop in stocks in just two weeks’ time.
My point is this… a strong $USD does NOTHING good for the economy, nor for the corporate sector. And it’s not like the Fed can claim ignorance of this as we went through the exact same situation this time last year!
Finally, there is the $USD denominated debt to worry about.
Globally there are over $52 TRILLION in $USD-denominated debt sloshing around. This is an amount equal to nearly 70% of GLOBAL GDP.
ALL OF THIS IS AT RISK WITH THE $USD SURGING HIGHER.
Another Crisis is brewing… the time to prepare is now.
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Chief Market Strategist
Phoenix Capital Research
Source: zero hedge