Thirty trillion dollars in debt, massive deficits, and huge consumer debt, including mortgages. Put the interest rate up 1%, and you will have a calamity. Inflation will continue to double digits at least. There is no way the FED can tighten. The FED is the reason the economy is in a train wreck. Rates should be in the 5-7% range. Stop encouraging debt over savings. We can't taper a Ponzi Scheme. There’s a massive supply chain and excess money supply problem now. This wasn’t the issue last March. They are trapped and in a lose/lose situation. A 1% increase on the federal debt would cost more than a thousand aircraft carriers. The Federal Government is just like a lot of our "zombie" companies. We Have to borrow money just to make the "interest" payment on our debt, never mind paying down the principal. They couldn't afford to raise the rate even if they wanted to. It's really not looking very good for us as a country, particularly when the rest of the world finally figures it out and starts "cashing in" the US treasury bonds that they hold. This has been coming for a long time, and now it's arrived. Nicely summed up in a few sentences. The next rate move will be into the negative, and will come with a presser from corpse face Nancy emphatically saying it's needed to save the children and underserved communities. We know the FED has a mission and they will not stop, period. Their goal is to be the buyer and lender of last resort as well as inflating the debt away! They will never stop until the dollar is dead and replaced by a CBDC! The Fed may finally realize that you can't keep a Ponzi going forever without digging a deeper hole. The Yellen needs to go before anything has a chance of getting better. The "markets" need a reset sooner than later, and start over from a clean sheet. This "emergency" will end when the Market correction gets too painful, a few more hours should do it . The question is......WHEN will the GAPS Fill on those charts? 2027 would be nice. Welcome back to The Atlantis Report. Many, myself included have been waiting for the straw to break the Camel’s back. There have been many straws and the Camel stands. I have said it before and I will say it again ‘This is it. This is the one’. The reason is that, in all other times since the Great Recession began, the Fed has never faced scorching-hot inflation with the public demanding it do something to end it and with the certain knowledge that it will get even worse if the Fed keeps creating more money in the face of global shortages. In all other times, the Fed could go back to money printing as soon as the markets faltered from tapering; not this time. The Fed couldn't create inflation to save its sorry soul (if it ever had one) in the entire past decade. Now it cannot stop inflation to save itself. Inflation is not going to give up the battle, so the Fed is forced to engage. It now faces a clear and stark dichotomy: Save stocks, bonds, and its ginned-up recovery by continuing to print money and fuel the highest inflation the nation has ever experienced, or curb inflation and kill stocks, bonds and the faltering recovery. Either option is a disaster. It's likely the only thing that can create a 5%, a 10%, etc. correction is a shock of some type. A geopolitical shock - if it was serious. If it did not directly involve the U.S., it would not be serious. Israel and Iran going to war, Russia/Ukraine going to war, there would be a pause but not a correction. There needs to be something big enough to alter the behavior pattern. An unexpected shock is probably needed. RIGHT NOW, any announcement involving the new variant does NOT shock anyone. The virus has lost its ability to create a crash. Everyone is acclimated, numbed, desensitized to anything virus related. About 50% of that loss of 'shock potency' of virus announcements is LOSS OF TRUST. NO CHANGE TO DIP BUYING. Dip buying will commence but will be ups/downs for the entire week. REASON. 1) How many covid variants have been announced? SEVERAL. 2) How many of those variants caused a 5% correction or worse? NONE. 3)Are bonds more attractive suddenly? NO. There is a 4th question of concern with far-reaching consequences. Namely, the situation in Europe with Russia stalemate regarding Nord Stream II pipeline and Ukraine/Black Sea/ Crimea/NATO creep situation. Putin may be at a point of making a call in this poker game feeling a weakness in the U.S. extended financial situation including China's future relationship. Putin may be at a crossroads and may be forced to show some pushback or be ready for the dustbin like other geriatric leaders. Some thoughts: Germany won't certify Nord Stream 2. If there is a hard winter Europe won't have enough gas. So if Putin takes part of Ukraine Europe has 2 choices. a) ignore it and receive gas. and b) do something and Putin turns off the gas with them not having any reserves causing immediate blackouts (electric production uses gas). (but would work in a mild winter) And it could be timed to be at the same time China takes Taiwan. Real possibility but most market watchers are only interested in selfish trades with 24hour increments while adversaries think in terms of decades. Just look how China advanced in last 30 years while retailers reaped short term profits based on cheap labor The Fed doesn't want an excuse to push back its taper. The Fed knows it HAS TO taper if inflation doesn't miraculously go away, and it fears it may have to taper more quickly than it initially said because inflation is already way beyond where the Fed thought it would go. It has already HAD to publicly admit that. The Fed desperately HOPES its forced taper does not kill the stock market, bond market and economy. Now omicron may make that even harder. Omicron is not likely to kill inflation in an environment of global shortages, which will only be made worse by more Covid shutdowns, which are now being talked about all over the world again. So, if the Fed uses omicron as an excuse not to taper, the Fed knows even hotter inflation is certain. The Fed will still NEED to taper as much as it ever did (if not more so) but in an environment that makes tapering all the more precarious for markets and the Fed's fake recovery. That means omicron has just wedged the Fed even tighter into the trap it has made for itself. The reason the Fed has been telling us inflation will be transitory is that it desperately wanted to believe inflation would turn out to be transitory because that was the only way the Fed could go back to creating money if markets faltered when it tried to taper. It has been hoping it could convince the public inflation would prove transitory long enough for inflation to start to go away on its own; but inflation didn't go away on its own, so the Fed now knows it MUST TAPER and that it will be hard to stop tapering if market's falter because that will prove the Fed cannot stop creating inflation. An excuse won't change the fact that tapering now must happen because inflation is running far out of control, and I think the Fed is aware of that. In other words, the Fed doesn't want omicron to provide a rationale it can use as an excuse to the public for not tapering. It NEEDS omicron (or something) to destroy inflation so that it is not forced to taper if markets start to crumble when it tries to slowly end its "money printing." Right now it has inflation burning up its backside, forcing it to taper, regardless of market consequences. The Fed is looking for a savior to actually take it out of the heat it has created for itself. So long as inflation keeps rising, the Fed will be forced to taper to try to control it, no matter what else omicron does, or it will have to face increasing public and political criticism for continued scorching-hot inflation with people everywhere demanding to know why the Fed is continuing to create heaps of new money even as inflation is screaming in our faces. The Fed is trapped in a situation that was inevitable from the day it chose to make markets dependent on its continued "money printing."
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