Dear FutureMoneyTrends.com Member,
The central bankers who rule our global monetary system all have one thing in common: none of them have ever raised an interest rate.
For over a year now, we have seen financial media publications and perma-bulls talk about the coming rate hikes. They act as if the economy was going to normalize, because that’s what you do, right? You drop rates during the recession and then raise them at the point of recovery.
Well, since June of 2009, we’ve been told that the recession is over. Remember the green shoots? How many summer recoveries were we promised? I think they did that for about 6 years straight… for 2015, it just went away.
Now, the talk is about rate hikes, which we have said from the beginning: outside of a quarter to half a point as a pretend follow-through to all this talk, everyone reading this will probably never see the Federal Reserve raise rates to normalized levels.
Rates will rise one day, but it will be due to market forces pushing them higher like a dam bursting through concrete. Until that day comes, central planners are involved in a must-win game to keep rates suppressed.
Janet Yellen, should she lose her rate hike virginity next month, will quickly learn that the real economy is highly vulnerable to the natural forces of deleveraging and deflation.
I imagine even a quarter-point hike would see market participants throw a tantrum as well, with a large sell-off.
As far as the precious metals, we believe a rate hike is priced in, so the real question is what the metals do when she doesn’t raise rates. The answer to this is a bit more complicated, but overall, precious metal investors have a very limited downside risk when buying at these levels.
Gold, is already down 42% since 2011, and silver is down 70%.
In gold’s case, we believe people have been selling the rumor for over a year now, and will buy the news – the news being the FEDs will once again delay their promised rate hike.