This analysis was originally published by Brandon Smith at Alt-Market.com
There is one predominant reality that must be understood before a person can grasp the nature of the Federal Reserve and the decisions it makes, and that reality is this: The Fed’s purpose is not to defend or extend American markets or the dollar; the Fed’s job is ultimately to DESTROY American markets and the dollar. I have been repeating this little fact for years because it seems as though many otherwise intelligent people simply will not accept the truth, which is why they have trouble comprehending the actions that the Fed initiates.
When analysts make the claim that the Fed has positioned itself “between a rock and a hard place” in terms of policy, this is not entirely true. The Fed is exactly where it wants to be in terms of policy; but the central bank has indeed positioned the U.S. ECONOMY between a rock and a hard place, by design.
Globalists see the U.S. dollar and the U.S. economy as expendable (for the most part), and this sacrifice is meant to create distracting chaos as well as geopolitical advantage towards a new fully centralized world economic system. You can read the considerable evidence for this agenda in my article ‘The Fall Of America Signals The Rise Of The New World Order’.
If you believe the Fed is the sole purveyor of the global economic crisis and is at the top of the internationalist pyramid, then you probably predicted that the privately controlled central bank would “never in a million years” raise interest rates (many prominent people within the alternative economic scene did). If you believe that the Fed’s primary goal is to prolong the life span of the “American empire,” again, you probably predicted that the Fed would never raise interest rates. There is a serious normalcy bias when it comes to parts of the alternative economic world and their position on the Federal Reserve. They refuse to acknowledge that the Fed is a deliberately preset time bomb meant to vaporize the U.S. economic system and currency. And as long as this continues, they will never be able to determine what is likely to happen next within our fiscal structure.
There is no way around it: If you cannot grasp the root motivations of the Fed, then you will become cognitively crippled in your struggle to see the next pitfall in the near-term economic future.
In August, I made this prediction concerning the Fed rate hike decision:
“The Federal Reserve push for a rate hike will likely be determined before 2015 is over. Talk of a September increase in interest rates may be a ploy, and a last-minute decision to delay could be on the table. This tactic of edge-of-the-seat meetings and surprise delays was used during the QE taper scenario, which threw a lot of analysts off their guard and caused many to believe that a taper would never happen. Well, it did happen, just as a rate hike will happen, only slightly later than mainstream analysts expect.
If a delay occurs, it will be short-lived, triggering a dead cat bounce in stocks, with rates increasing by December as dismal retail sales become undeniable leading into the Christmas season.”
I made the prediction (as well as my prediction on the taper in 2013) on the foundation that the Fed is only an appendage of a greater elitist banking machine. The Fed as an institutional idea is not sacrosanct for the elites, and is at the very least replaceable. The dollar is slated for demolition. And though it may continue on for a time in a more marginalized capacity, the “Fed note” as we know it today will soon be crushed under the weight of what the International Monetary Fund calls the “global economic reset.” In other words, every part of my prediction turned out correct because I accepted the reality that the Fed will invariably take the most destructive policy actions at the worst possible time with the purpose of crisis in mind.
Central bankers also have a tendency to follow patterns. They rarely change strategies on a whim. Most of the decisions we see made by the Fed, the European Central Bank, the Bank of Japan, etc. were likely made months, if not years, in advance and follow the same strategies used during previous crises.
For example, the Fed process of raising interest rates this December followed almost exactly the process they used to introduce the taper of QE3 in 2013: a buildup of rhetoric in mainstream news during the first half of the year and then a fake-out in September, followed by months of uncertainty in markets and then quick passage of the policy in December. The Fed also has a habit of raising interest rates at the onset of economic instability or right in the middle of a downturn, as it did in 1928-1929, triggering the Great Depression, and in 1931, adding fuel to the fire of financial catastrophe. These particular catalyzing policy actions are partly what Ben Bernanke was referring to on Nov. 8, 2002, in a speech given at “A Conference to Honor Milton Friedman … On the Occasion of His 90th Birthday”:
“In short, according to Friedman and Schwartz, because of institutional changes and misguided doctrines, the banking panics of the Great Contraction were much more severe and widespread than would have normally occurred during a downturn.
Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.”
Based on this pattern of policy actions leading to fiscal disaster, I believe alternative analysts can predict with some certainty what is likely to happen now that the Fed has raised rates in the middle of the most pervasive economic contraction since the Great Depression was initiated (as Bernanke admitted) by central bankers. Here are some trends that I believe will become exponential as we move into 2016.
Market Turmoil Going Critical
This might seem like an easy prediction to make; the IMF and the Bank for International Settlements have both been publishing “warnings” on a possible negative financial event if the Fed were to raise rates. I just want to point out first that the Federal Reserve takes its marching orders from the BIS, so the BIS would certainly know if a Fed policy change will result in collapse. We don’t have to make predictions, we only have to look at where the BIS is positioning itself in order to appear as though it is a prognosticator with our “best interests” at heart.
Second, market turmoil is a guarantee given the fact that banks and corporations have been utterly reliant on near-zero interest rates and free overnight lending from the Fed. They have been using these no-cost and low-cost loans primarily for stock buybacks, purchasing back their own stocks and reducing the number of shares on the market, thereby artificially elevating the value of the remaining shares and driving up the market as a whole. Now that near-zero lending is over, these banks and corporations will not be able to afford constant overnight borrowing, and the buybacks will cease. Thus, stock markets will crash in the near term.
This process has already begun with increased volatility leading up to and after the Fed rate hike. Watch for far more erratic stock movements (300 to 500 points or more) up and down taking place more frequently, with the overall trend leading down into the 15,000-point range for the Dow in the first two quarters of 2016. Extraordinary but short lived positive increases in the markets will occur at times (Christmas and New Year’s tend to result in positive rallies), but shock rallies are just as much a sign of volatility and instability as shock crashes.
It is hard to say how fast and how far markets will drop by the end of 2016. I believe we will see a repeat of the 2008-2009 market chaos, but we are entering into some unknown territory being that the crisis we are experiencing is not a purely deflationary one like the Great Depression. Rather, this is a “stagflationary” collapse with elements of the Great Depression and the Weimar inflationary disaster.
The Fed Will Continue To Hike Interest Rates
I believe the Fed will continue to hike rates throughout 2016 despite any current or future negative economic signals. It has ignored the global contraction so far and will ignore future events. Why? The Fed is setting the stage for a collapse. Period.
Mainstream analysts claim skepticism over the Fed’s publicly announced “dot plot” schedule of at least four rate hikes in 2016. I am not skeptical. I think they are going for broke and opening the gates to fiscal hell.
But wouldn’t rate hikes result in a stronger and more desirable dollar? Possibly, in the short term. However, many people are unaware that a supposedly “strong” dollar index relative to other national currencies is just as much a death knell for the greenback as a weak dollar index.
Petrodollar Status Lost
Oil producers have refused to cut production despite the fact that many nations no longer have storage capacity for excess reserves. International demand continues to decline, causing a global oil glut so intense that tankers carrying oil are now being forced to sit offshore waiting for space to dump their cargo. Some are even turning around mid-trip and going back to where they came from.
Why have OPEC nations refused to cut production? Because they plan to diversify away from the dollar and into a basket of currencies in order to “stabilize” oil prices, rather than reduce supply. The icing on the cake is the recent decision by Congress and the Obama administration to allow the removal of the 40-year-old oil export ban within the U.S. With the lifting of the ban, the U.S. now becomes a competitor in the global oil market in the middle of the worst oil glut since the early 1980s. This might not seem like the smartest move to many analysts, but the Fed is not the only institution out to derail the United States. Certain elitists within our own government are also making the worst possible decisions at the worst possible time, and they are doing this quite deliberately.
According to the current developments in oil markets, I believe the next major economic trigger event will be the removal of the dollar’s petro-currency status. The “strong” dollar (relative to the dollar index) is now driving down prices at a rate that is giving OPEC nations whiplash. Saudi Arabia has already hinted at a depeg from the dollar, as low oil value continues to drive oil producers into debt.
With the U.S. now entering the market as an oil competitor, I do not see any compelling reason for OPEC nations to continue pegging oil sales to the dollar. With the loss of petrostatus, the dollar will be progressively torn apart. This will lead into the eventual removal of the dollar’s world reserve status, which I have been warning about for years, most recently in my article “The Global Economic Reset Has Begun.”
Geopolitical Distractions
I do not see all of these economic developments taking place in an open vacuum. It makes far more sense for them to progress in the background during geopolitical upheaval with terrorism being the main distraction for the general public. I believe 2016 will be labeled the “year of the terrorist,” as ISIS attacks expand to every corner of the U.S. and in numerous EU nations. This “fog of war” is completely necessary to hide the actions of the most dangerous terrorists: international financiers and elites bent on morphing entire global political and financial structures into something more centralized and more sinister.
Other distractions are certainly possible, but there are far too many trigger points around the world at this time to make any kind of prediction as to which ones (if any) will be used. The false East/West paradigm continues and is useful in that it provides a rationale for the eventual dump of the U.S. dollar by Eastern nations (including China). Russian and NATO tensions could be used to foment regional wars or even a world war if that is in the cards. I do not see this as the endgame, though.
Rather, economic collapse is the greatest weapon at the disposal of globalists. National panic, riots, looting, starvation, magnified crime: All of these things result in mass die-offs and desperation. Desperation leads to calls for “strong leadership”, and strong leadership usually results in totalitarianism. It might seem sensationalist to tie all of these possible outcomes to the Fed rate hike decision, but give it a little time. Those who make accusations of sensationalism and “fear mongering” today will be asserting tomorrow that such developments were “easily predictable.”
If you would like to support the publishing of articles like the one you have just read, visit our donations page here. We greatly appreciate your patronage. You can contact Brandon Smith at: [email protected]
It Took 22 Years to Get to This Point
The head of the Canadian province of Ontario, Doug Ford, has warned that it will retaliate against...
The bird flu is continuing to spread to other mammals, including cats and now zoo animals. Cats...
This article was originally published by Tyler Durden at ZeroHedge. Russia launched a massive...
Commenting Policy:
Some comments on this web site are automatically moderated through our Spam protection systems. Please be patient if your comment isn’t immediately available. We’re not trying to censor you, the system just wants to make sure you’re not a robot posting random spam.
This website thrives because of its community. While we support lively debates and understand that people get excited, frustrated or angry at times, we ask that the conversation remain civil. Racism, to include any religious affiliation, will not be tolerated on this site, including the disparagement of people in the comments section.
Been waiting on this crash for a while.
Could 2016 be the year?
Be well all…
I think too many people have gotten caught up in a race as to predicticting when this collapse will happen and it’s now become “boring” to many out there. I don’t think “when” is the important thing here. We know what’s coming, if you knew when, then you’d be like GOd, cause he’s the only one who really knows. Keep focused, stay quiet
So true and not only that but you also read how they predicted our current plight a few years back. The problem is the system is so f**king rigged that what you are seeing is all an illusion. Who knows how long this could go on? One thing is for sure, those pulling the strings knows how this will end. Hank Paulson let the cat out of the bag when he said if the Fed had not stepped in and bailed out the TBTF Banks, the Global eCONomy would have stopped and Martial Law would have been enacted in the US.
….and globally we are 100 times worse off than in 2008.
“The Fed as an institutional idea is not sacrosanct for the elites, and is at the very least replaceable. The dollar is slated for demolition.”
This statement by Brandon is PATENTLY FALSE. And IDIOTIC. 🙂
The dollar is the currency in which the global elite and multinational corporations hold their wealth. The dollar is their currency. The MIC is their security and the CIA/DIA is their secret police.
The FED controls the dollar and the dollar controls the world as designed by the Global Elite. It is protected by voting control over all world financial institutions as the result of the rise of the USA as the major economy and military power after WWII.
Currently the dollar is the weapon of choice as I have described here many times, and the FED is using it to destroy all challenges to its hegemony, including China. That will not change except by thermonuclear war.
Brandon Smith Economics is not worth the time to read or tear apart. He knows nothing. Really. He doesn’t. Its sad. Another guy with a Liberal Arts degree and no formal financial education or experience in the industry, who thinks he understands the nuances of global finance and its financial institutions and continues to spread his ignorance by publishing these asinine “analyses”.
Can you say, “Michael Snyder?” Guys you have talents that could be useful to the Liberty Movement if you would stick to your knitting. Economics and financial analysis is not your gift. Really. Its not. 🙁
Durango, you’re truly a spastic moron. Nearly all of your claims on this site have turned out to be garbage. With each passing month you are shown to be more wrong than ever, and yet you keep steamrolling forward as if anyone cares what you have to say. It’s a little tragic.
You clearly have fantasies about becoming a professional commentator on economics, so why don’t you put your money where your mouth is? Start writing real analysis on YOUR OWN SITE and put your real name on it. Writing a bunch of prattle and opinions and playing at being a big shot on other sites anonymously is a coward’s approach.
BTW, I have NO desire to be a professional economic commentator.. I wouldn’t want to have to take a pay cut. 🙂
I’m sure I’ll never know or care what you get paid, you might be a homeless guy using free internet at the library. I’m also sure you have no desire to be held personally accountable for your bad calls by sacrificing anonymity, either…
Also, from what I hear you spend a whole lot of energy stalking female writers in the liberty movement, so perhaps you could use all of that extra time you clearly have on your hands and do something constructive like produce a real piece of analysis with your real name on it…
How? Potentially is a passive aggressive way of saying something without saying anything. Give examples.
“Nearly all of your claims on this site have turned out to be garbage. With each passing month you are shown to be more wrong than ever …”
Brandon you keep saying that, and I keep asking you to point to the “garbage” and show examples. Do that and we can debate the garbage.
You never do. I have been spot on. 🙂
Most of the people here probably cannot even understand what it is you are trying to say in your “insightful analysis” because it is mostly goobly-gook. Your Liberal Arts creative writing classes are revealed in your flowering language which is straight out of Hardy or Bronte.
It doesn’t make for good financial journalism. 🙂
Merry Christmas to you, Mac, and everyone here. 🙂
Show us where you actually predicted any event with any factual clarity? Your posts amount to nothing more than blithering opinions with a heavy bias in favor of the dollar which you have never been able to support with concrete justification, meaning you are obviously not qualified to determine what is “good financial journalism”.
Brandon: Pull up any of my posts and dispute them. Here is one extraordinary correct example: I predicted a low for gold at $1200 when gold was at $1700 +. Traders would KILL for that short.
Gold bottomed at EXACTLY $1200 at the end of the day about six months later; prior to a subsequent bounce, and then another decline to about $1180+/- where it remained within a range for the summer. I warned here about the attack on PENSIONS, 401ks, and IRA’s before there was any mention of it in the press; either LSM or Alt Media. There are many other examples.
Find them.
I am not bias towards the dollar. I am only refuting your errors in analysis. You and Michael Snyder, and Jim Willie are biased against it, for God only knows why, and all contrary evidence that supports its strength.
The current strength of the dollar is cyclical in nature (and it will continue in that direction) as I described to this community two years ago when everyone was screaming “hyperinflation”.
I am just explaining that the dollar happens to be the currency of the NWO and why the PTB are not going to destroy their own wealth. To believe otherwise, as you do, is totally irrational. There is no profit in it. Follow the money.
If there were another currency besides the dollar, that was the primary currency of choice of the NWO (other than the euro, yen, pound, and swiss franc) I would acknowledge that.
It may be fiat, but it is the currency of choice of the NWO, the PTB, and multi-national corporations who hold most of their wealth in it. They are not going to destroy the dollar or their wealth. Its THEIR dollar. Not ours.
I don’t follow any writers in the Liberty Movement, male or female, but I do considerable reading in everything, at a large number of sites, with various orientations. I challenge you here because your financial and economic analysis is absurd, probably because you have no industry experience or formal business education. So I guess I am only stalking you.
Your analysis doesn’t give this community the insight it needs in this area. Michael Snyder and Jim Willie are also wrong about the collapse of the dollar, although Michael Snyder does a really great job documenting the economic collapse; which is designed to put the BRIC’s in their proper place.
Economic collapse is not dollar collapse,
Dollar collapse? Replaced by SDR’s? It’s wishful thinking. Not gonna happen without thermonuclear war, EMP, or Pole Shift. The NWO already has a world currency and total control over it.
No reason to replace it. No profit in replacing it. On the contrary the NWO Uber Rich would lose the MASSIVE opportunity to manipulate the FX Market and front run the trades. By adding the Yuan, they have increased the number of trading pairs exponentially. Re-evaluate your thinking and don’t be afraid to change your mind.
The Apostle Paul became the biggest proponent of Jesus Christ, once he had seen the light. 🙂
Eppe, I think it will be. I’m coming back to GA tomorrow and plan on being at the BOL for at least a week. Going to brush up on my outdoor skills and have some other fun.
Could the fed want a crash in order to do a reset and wipe 20 trillion dollar debt off the books? Wonder if that is possible. OWE maybe
News today, a secret service agent’s gun, badge and flash drive have been stolen from his car. Stuff like that is NOT suppose to happen. The agent is assigned to the President’s security detail. Umm… up coming assassination plot? If I were a presidential candidate, I’d be watching my back.
The high cost of oil was based on fraud. There was absolutely zero reason to justify the cost of $140 a barrel oil.
So, with the oil economy is built on a fraud, then the collapse that follows should not be unexpected.
stock up, Eliminate debt,streamline yourself to make yourself more flexible. Get rid of your junk,concentrate on long term survival. Give yourself a chance to come out the other side.
Agreed, but just curious how getting rid of junk you don’t need will help for long-term survival. Might not this junk be barter-able in a time of chaos? And you could leave it behind in a bug out.
He might be saying…sell your junk and unnecessary items you won’t need in a survival situation and use the money on needed items that will help during a SHTF event. Or get rid of the junk to make more room for more preps.
Bingo. I throw up old stuff I dont use anymore on craigslist all the time and use that money for extra food or supplies. The smalls add up!
While I believe the dollar and with it our current standard of living will disappear, I wouldn’t presume to predict when or at what speed this will happen. I’m sure those behind this will do everything in their power to confuse us, going as far as crying wolf often enough that we stop paying attention. Also, we don’t know whether it will come in the form of a slow leak or a bubble bursting, either of which can work to their advantage. As in any situation in which we lack experience or training, those who are resourceful and adaptable have an advantage over the rest. I think most of us here have prepped to the best of our abilities, taking into account our individual finances. I believe we need to work on our skills in the realm of maintaining an underground economy. Another skill set is how to disrupt the elites’ supply of necessities, either goods or services.
Some day it will happen. It will happen the day before I’m to get my first S.S. check. Just my luck. Oh well I never thought I would see it any way.
Sgt.
I’m right there with you SD.
Went to work at seven years old, and was worked like a man for one dollar a week in 1963, during summer break, right up until I was able to get a chance to work at a nearby farm, that I could ride my bicycle to.. Worked myself into other jobs like mowing and leaf racking at every chance I could, right up until I was able to get my workers permit.
Man, what a joy it was to bag groceries and stock shelves, and bring home my first real paycheck, without doing back breaking work. Little did i know, that the SS withdrawals from my paycheck was going to be pissed away by crooks in the gov.
Now, nearly 45 years later, after paying in to a bankrupt program; I really need my $$. I got a couple years before I can actually apply for it, and more than likely, it will not be available. Screwed again.
“right up until I was able to get my workers permit.”
What the heck is a workers permit?
Is that another way of saying, the privilege to pay FICA?
It’s what “they” fight for over there, so you can pay up, over here?
Ya baby, That’s freedom.
Back in the day, if you wanted to work in a business that was legally bound by all gov entities, and you needed a SS card #, and you were 15 years old, you had to get a workers permit in order to legally get hired.
No permit, no paycheck.
Just a bunch of black thugs in Washington DC.
You will get your SS check, it will just bounce.
Best to lower your exposure and personal damage to the demise to come.
The economy is crashing now, I think. We just haven’t heard the crash or felt the shock wave from the crashing.
The economy crashing is not our biggest problem although it depends who you talk to.
The problem in my opinion will be the street violence from our own citizens and from the refugees that you know who is bringing in who have come to destroy. I think what will occur in our streets and cities will be horrifying.
This is all a great theory until you realize that if you want to destroy something, there’s no need to resort to all this Doctor Evil convoluted shit.
On the other hand it’s tracking ok at a “prediction” level (you got ONE so far. Only one…)
You obviously haven’t been paying attention to my work. Most of my projected events have happened, including the Taper, the return to 2008/2009 market volatility, the fact that the Fed delayed the Rate hike in September, the rate hike in December, the Saudi push to depeg from the dollar, and the inclusion of China in the SDR (which I predicted three years in advance). What have you ever predicted, buddy? Let’s see some examples.
Blah, Blah, da blah blah blah! I love this website, it drives me to drink.
It was a rate hike so miniscule no one will notice of .25%, and it can be rescinded if necessary. I’m rather glad they started to raise rates so the stock market can deflate itself slowly if no other catastrophe happens. But I expect another catastrophe to happen.
You didn’t read the article. ANY rate hike means no overnight lending. Period. No overnight lending means no stock buybacks. No stock buybacks means a market crash. And they won’t rescind the hike because they do not want to. They want a crash, which is why they initiated the taper and the hike in the first place. It’s amazing how difficult this reality is for some people to grasp.
While folks are always looking for economic crash as an end all event…just wait untill they really begin the main event Plan of what they call “Tikun Ohlem”(sp?) aka in english it translates to “The Repair of the World”
For according to them, it is what is necessary for Them to create their very Own “messianic era to last 10,000 years”
And of course and also acording to Them, once they achive said world repair, and do enough burnt offerings to effect said repair, what their version of “messianic era to last 10,000 years” really consists of is simply their very own JWO global dictatorship rule over the worlds goyim.
Them what cares to Learn more can since much has been written about this stuff by them what plans and does it all.
this fed rate hike don’t equate to every loan going up in loan rates….Every local bank and cedit union etc has Their own rate systems they charge for a loan’s usury rates.
Some may increase rates for car or home loans…Others may not…Perhaps a few may Lower loan rates to generate more loans requests.
The 10 Year Rate as seen on TV stock market stations is the Main rate used for home loan rates etc…Has that ten year rate changed due to this new fed rate rise?…I ask as I do not know either way….yes I know the ten year rate fluctates often…but has it too raised as a Direct consequence of fed rise of .25% increase?
Some advice needed. These days prepping and paying off debt is tough. What is my priority? Are we talking debtors prisons? Also, do you recomend a years worth of preps, or a few months? Any 2 cents is welcomed.
Generally speaking a good starting path I suggest to new preppers is to also a path I found to be the easiest. I call it doomsday Tuesdays. Every Tuesday I either add to my preps or if I can’t afford to spend much I’ll try to do something useful such as changing out water in storage containers. It’s about keeping your head in the game long term, but also not obsession over it either. It’s a balanced approach and I honestly don’t feel burdened and I have become very well prepared in a few years time.
As for the debt, paying it off a little at a time is a good form of planning. Plan for 2 futures. One that goes right, and 1 that doesn’t.
Three to six months, cpl a..
Also, imho, start with the lowest balance and pay that off first, then the next lowest.
Live beneath your means.
RE: “What is my priority?”
Well, I don’t know. How uncomfortable is it to you to be a debt donkey? Only you can answer that. …Get any income from that debt?
There is no need to crash anything on purpose. It will crash without any prodding.
Why? Because the monetary system is debt based. Every unit of currency is loaned into existence as debt with usury attached. Trouble is, the principle is included in the loan but not the usury. In order to pay the usury, more debt must be loaned or created by someone else. This creates a system that must have continual growth of debt to survive. It can never be paid off.
We are at the limits to debt worldwide now. The system will implode on it’s own.
I would say that the moneymasters are doing the opposite…they are trying to prolong the system as long as possible with financial fraud in derivatives and dark pools. It is, after all, how they make their living. Why would they crash their own paycheck? Makes no sense. Self interest drives the human race.
And the IMF is a wholly owned subsidiary of corporate US. They created it and they control it. Read the “Final Provisions” in the IMF charter. It states that every country that participates in the IMF (188 of em) must deposit a certain amount of gold in a US .gov account…not an IMF account. What does that tell you?
High finance IS the NWO as it controls the majority of the world money systems. No need for a world government when the people can be controlled by debt.