- Bill Holter: The Breaking Point? The Final Straw Next Week – FedRes Interest Rate Hike?
by Bill Holter, http://www.jsmineset.com/
We have a very important inflection point coming next week with the Fed meeting. I believe the inflection point has already been reached a few weeks back but next week may be the final straw. Will the Fed raise rates to “save face” and try to stem the loss of credibility? Or will they remain “patient” (cornered) and realize they cannot raise rates without razing the entire building?
Before getting to the rate hike thoughts, a bit of backdrop is needed. World equity (and credit/currency) markets are in disarray. 20-40%+ drops in equity bourses around the world are now common. In plain English, the world is already in a bear market of significant historical proportions. Credit markets particularly in Europe are showing signs that illiquidity is taking over. The German bund trading to .8% up from nearly 0% is just one illustration.
In the U.S., the 10 year Treasury is now moving through the 2.23% level to the upside which has been strong resistance. I believe a close over 2.4-2.5% will be a stake in the heart of American credit. I say this because we already have real estate markets stretched and higher mortgage rates will lower “purchasing power” of new buyers. As for autos, higher rates almost don’t even matter because what was once less than a 5 year loan market is now 7 years with negative equity to start, laughable!
Non financial yes but of very high importance are the now FOUR chemical plants explosions/four immediate retaliations (have you even heard of the latest explosion in Minnesota?http://kfgo.com/news/articles/2015/sep/07/natural-gas-pipeline-explodes-in-northwestern-minnesota-along-canadian-border/ ).
Could it be sabotage on the ground? Yes of course it could. Could it simply be coincidence …after coincidence? I leave that to you. Say whatever you would like, something very odd is occurring with regularity and the case can be made a new type of weapon is being used. I believe the public has not been informed or able to keep up with warfare technology. Whatever the “cause”, it is safe to say we are in the “sparring” stage prior to war.
One other area to look at before we get back to the Fed is the COMEX gold circus. Registered gold available for delivery by dealers has dropped significantly because of last month’s deliverieshttp://www.zerohedge.com/news/2015-09-09/something-just-snapped-comex . The total is now about seven tons left (JP Morgan has less than 1 ton) which leaves total contracts divided by deliverable gold at the crazy multiple of 207 potential claims for every deliverable ounce: