Once again we have the Fed talking up the US$ with possible rate hikes only to chicken out in the last minute.
Perhaps the Fed is fearful that a rate hike could tank the stock market? Or is it because of the recent deluge of poor data which stays the Fed hands? I am incline to believe that the Fed themselves know that the economy is weak but continue to talk up the economy because to say otherwise means to acknowledge that the US economy is in a recession.
The stock market needs to tank so that all the malinvestments fail to enable the economy to grow again.
Right now all the cheap money is going to share buybacks instead of going into plant and equipment investments, training and hiring of employees. The Fed is just kicking the can down the road until the next President resides in the White House. But eventually the deluge of bad earnings and economic data will force the stock market to tank.
The we have ridiculous recommendations coming from an ex-Fed president and Ben Benanke to go into negative interest rate should a recession occurs with the ex-Fed president recommending a -2% rate cut.
This is forcing savers to take risks. Without savings how can an economy be prosperous? Savings create wealth, and then with the wealth, people will spend. You cannot force a person to spend if he has no intention to. The person will likely withdraw cash and hoard cash because there is no incentive to spend in a negative interest rate environment! So these wise men then call for the banning of cash.
Well if that happens, people will just convert cash into precious metals.
The above is just my opinion.
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