The Fed is Now Officially in VERY Serious Trouble - June 19, 2015

The Rumor Mill News Reading Room
Posted By: Lymerick
Date: Friday, 19-Jun-2015 04:42:56

Phoenix Capital Research
06/18/2015

The market action of the last 24 hours can be summated as thus:

The Fed didn’t raise rates, so the US Dollar fell and all risk rallied hard.

The fact the Fed didn’t raise rates is not important. Interest rates have not been at zero for six years.
And the last real period of tightening ended in 2006, nearly a full decade ago.

In the simplest of terms, for the Fed not to be raising rates is not interesting. What IS interesting is WHY the Fed is not raising rates.

Of course there are many reasons why: the economy is not strong enough to handle it, the Fed missed its chance to raise rates in 2011-2012, etc.

However, there is only one REAL reason why rates remain so low:

Actually it’s $555 trillion reason: and they are derivatives based on interest rates.

That is not a typo. $555 trillion… as in an amount greater than 700% of global GDP.

The world tracks "risk" based on the yield of the 10-Yr US Treasury. This yield has generally been falling non-stop since 1983. So we've had well over 30 years of money getting cheaper.

SNIP


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