Torrent Of Bad News Greets Fed As It Raises Rates

[Note: The FED raised it’s benchmark Fed-Funds Interest Rate yesterday, from 0% to 0.25%, although the Bond Market (at this moment) is showing 90 Day US Treasury Bills at 0.19%. – Bob]

By John Rubino – Re-Blogged From http://www.Silver-Phoenix500.com

Ideally, a central bank would like the party to be rocking when it takes away the punch bowl. This party, however, is not cooperating. For every sign of exuberance (high-end real estate bubbles, equity and bond bull markets, job growth) there are five or six things going wrong, some of them in a big way. This morning’s news illustrates the point:

Oil slump resumes on U.S. supply build, expected Fed rate hike

Plunging energy prices are a tax cut for consumers but a calamity for the leveraged speculating community. And since finance now wags the economic dog, the latter effect is potentially a lot more serious. Look for a wave of bankruptcies and defaults across the energy world in 2016.

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Stock Market Calls Fed’s Bluff

By Michael Pento – Re-Blogged From http://www.pentoport.com

As the Fed nears its proposed first rate hike in nine years the stock market is becoming frantic. The Dow Jones Industrial Average is down around 10% on the year, as markets digest the troubling reality that our central bank may be raising interest rates into an emerging worldwide deflationary collapse.

The Fed normally raises rates when inflation is becoming intractable and robust growth is sending long-term rates spiking. However, this proposed rate hike cycle is occurring within the context of anemic growth and deflationary forces that are causing long-term U.S. Treasury rates to fall.

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