FED - Interest rates can´t rise - risk of economic collapse
Good morning.
Not only the FED.....no, globally the government debt burdens are so high and reached such a high level, that a comeback of "normal interest rates" is impossible without risking an global economic collapse i.e. crash.
Following some numbers which underpin this thesis:
- Actual US Federal Budget Deficit (!) = 3 trillion US-$ = 3,000,000,000,000 US-$ (!!!)
- Actual US governemnt debt = 28.85 trillion US-$ = 28,850,000,000,000 US-$ (!!!)
- Actual total Debt to GDP ratio = 141 % (!!!)
How on earth the already stretched budget could pay higher interest evoked by higher FED interest rates respectively higher Treasury interest ?
Given that and assuming that because of that, all important central banks will tolerate higher inflation and monetizing of government debt, I do not see falling asset- respectively commodity prices.
Conserving wealth i.e. purchase power for the later generations is in such environment not possible with cash. "Cash is trash" was one time a saying in the markets.
Gold, Silver, GEM-Stones, Diamonds, Real Estate. In future need of capital a seller of these assets can release cash.
From my point of view all this interest hike blabla is only trash talk....
Cheers and have a nice weekend.