The Federal Reserve has been under tremendous pressure to lower interest rates. Why? Theoretically, the economy and unemployment are doing fine. But are they? If they were, than the Fed Reserve should be raising rates every so slightly. The Fed would love to have interest rates around 6% to 7% so they have ammunition for the next recession. 2.5% in not even close to 6%. So why lower the interest rate by 1/4%?
Well, Governments and Corporations are hooked on "Free" money or basically zero interest rate borrowing. Everyone is on "Monetary Crack" and can not get off of it. Everyone knows that global debt for Government, Corporations and Individuals is at an all time high. This is not sustainable by any means. People and investment firms are wising up. They see that trouble is ahead. We are starting to see a flee to safety.
Where can safety be found? It looks like mid term bonds, physical Gold, Silver and Bitcoin. Today, there was an uptick in the 2, 5, 7 and 10 years bonds. People wanted to capture a 2.5% yield from those bonds. Gold rose by $30.00 today and Bitcoin rose by $400.00 within 8 hours. It seems that very soon, alternative monetary assets will explode in value. People will panic to run outside of Fiat currencies. The U.S. Dollar will be one of the last currencies that people will flee out of into Crypto, Gold and Silver.
Watch what happens over the next 24 to 48 months. We will see, most likely, historical world financial events. As the saying always goes, it is better to be one of the first out the exit door before someones yells 'Fire" in a theater.
image from: pbs.org