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Is the Fed About to Light the Fuse of the Global Debt Bomb?

Alt-Market  ( Original )
MAR 16, 2018

Consumers are starting to buckle under record amounts of debt. Corporations are debt-bloated, and many zombie corporations who have come to rely on super-low-interest debt to stay alive will be wiped out as rates rise. The federal government issues debt at the pleasure of foreign-nation buyers as the Fed seeks to reduce its balance sheet.

And into this tenuous, fragile state, economy-slowing rate hikes begin in earnest.

The cold hard reality is that as the Fed raises interest rates all other areas of the economy come under pressure. The average citizen, with his/her record debt levels, is now subject to the machinations of the central bank through the arbitrary shifting of a single data point like "inflation".

With Trump refusing to take a stand against the continued raising of the national debt ceiling, and the addition of his $1.5 Trillion infrastructure spending plan, there is little doubt that our national debt will continue to rise. Therefore, foreign investment is essential.

My prediction is that the Fed will not step in if a trade war escalates to a treasury bond dump. Or, that they will not step in until it is far too late to stall the resulting crisis.

Whatever happens within our economy and the global economy, central banks like the Fed have fully facilitated the bubbles produced as well as the inversions that result. The Fed knows exactly what it is doing. And all other factors, from the Trump trade wars to foreign dumping of U.S. treasuries and the dollar, will be a distraction from the banking elites truly culpable.

ORIGINAL SOURCE: The Fed Has Its Finger On The Button Of A Nuclear Debt Bomb by Brandon Smith at Alt-Market on 3/15/18