Read the Beforeitsnews.com story here. Advertise at Before It's News here.
Profile image
Story Views
Now:
Last hour:
Last 24 hours:
Total:

Jim Rickards SHOCKING Prediction on INTEREST RATES

% of readers think this story is Fact. Add your two cents.


“I think the biggest surprise in 2015 may be that the Fed doesn’t raise interest rates at all,” says Jim Rickards, resuming our team’s 2015 forecasts today.

We shared Jim’s outlook in brief as 2014 wound down. Today, we dive into the particulars: “If you’re going to offer an outlook,” he explains, “it’s always good to know where you’re starting and then project from there.

“Right now, the markets fully expect an interest rate increase from the Federal Reserve. The only debate is when it will happen. You have people who say March and other people who say June or July. Some of them a little bit later.


 If the Fed raises rates — we’re going to have a major recession

“But I don’t see anyone saying that they won’t raise rates at all in 2015 — yet that’s what I expect.”

“I think the biggest surprise in 2015 may be that the Fed doesn’t raise interest rates at all,” says Jim Rickards, resuming our team’s 2015 forecasts today.

“Right now, the markets fully expect an interest rate increase from the Federal Reserve. The only debate is when it will happen. You have people who say March and other people who say June or July. Some of them a little bit later.

“The Fed is saying a couple of things right now,” Jim goes on: “They say the U.S. economy is getting stronger and that they want to normalize interest rates.

“With a nod and a wink and tweaking their language, they’ve signaled that they’re going to raise rates in 2015. That’s what the market is set up for.

“This explains why the dollar is so strong. People expect Europe is going to print money and the Fed is going to raise interest rates or tighten. As an investor, you’d rather be in the dollar under those circumstances, because you are going to get a higher return.

“But I think what a lot of folks are missing is that the data are coming in very weak.”

That is, there’s less than meets the eye with the job numbers the Fed monitors so keenly: Sure, weekly first-time unemployment claims finally are back under 300,000 — a “normal” figure when the economy is growing at a healthy clip.  But we’re gaining part-time jobs… and losing full-time jobs.

“If you have that $25-an-hour job, 40 hours a week, that’s $50,000 a year,” Jim tells us. “But if you have a $10-an-hour job, 20 hours a week, that’s $10,000 a year. So it makes a big difference.

“The other problem is the strong dollar. As I said, the dollar is up because people think the Fed is going to raise rates, but a strong dollar is deflationary.” Thus, the inflation numbers are coming in consistently below the Fed’s 2% target.

“So the setup is as follows. The Fed says they want to raise rates… and that they want inflation too. But deflation is stronger, and if they raise rates, they’re going to get more deflation. So how does that work?

“The answer is: It doesn’t work.”

 “There are only two ways out,” Jim goes on. 

“One is the Fed does raise rates — remember, that’s what the market expects. If the Fed does that, watch out below — we’re going to have a major recession. In that scenario, the U.S. economy is going to be thrown right back into recession, because the deflationary powers are too strong. Raising rates strengthens the dollar. It makes the deflation worse.

“I think, however, the Fed will see that fact — maybe during the first quarter of 2015. They’ll back away and not raise rates. So my expectation, contrary to what most people in the market say, is that the Fed won’t raise rates in 2015.

“But right now, the market thinks they will, so it’s set up for a shock. If by March or April — somewhere in there — the data are weak and the Fed starts to signal they’re not going to raise rates, all of a sudden, everything could flip. That could be very bullish for oil, gold and hard assets.

“If the Fed doesn’t raise interest rates, investors will pile back into Treasuries,” Jim concludes.

Treasuries were the standout asset class of 2014. Sure, the S&P 500 rose 12%. But TLT, the long-Treasury ETF, rose 24% — confounding the “expert consensus” at the start of 2014 that said interest rates had nowhere to go but up and Treasury prices nowhere to go but down.

“Even if the Fed raises rates in 2015,” Jim adds, “the rate hike would crush other risky assets, which would also send investors running to Treasuries.” Win-win.

******

Find out How to Accumulate Affordable Physical Gold (by the gram) and Earn a Substantial Residual Income! 

 



Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Please Help Support BeforeitsNews by trying our Natural Health Products below!


Order by Phone at 888-809-8385 or online at https://mitocopper.com M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at https://www.herbanomic.com M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at https://www.herbanomics.com M - F 9am to 5pm EST


Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!

HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation.

Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.

MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)

Oxy Powder - Natural Colon Cleanser!  Cleans out toxic buildup with oxygen!

Nascent Iodine - Promotes detoxification, mental focus and thyroid health.

Smart Meter Cover -  Reduces Smart Meter radiation by 96%! (See Video).

Report abuse

    Comments

    Your Comments
    Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

    MOST RECENT
    Load more ...

    SignUp

    Login

    Newsletter

    Email this story
    Email this story

    If you really want to ban this commenter, please write down the reason:

    If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.