World braces for end of Fed’s ‘easy money’

Sunday, January 4, 2015
By Paul Martin

International community can’t handle surging dollar, new rise in interest rates

JEROME R. CORSI
WND.com
Jan 3, 2015

NEW YORK – With the Obama administration issuing rosy economic reports that WND has reported are based on manipulated statistics designed to show GDP growth at 5 percent and unemployment at under 6 percent, economists worry about the impact of the end of the Federal Reserve’s Quantitative Easing, the buying of U.S. Treasury debt.

“America’s closed economy can handle a surging dollar and a fresh cycle of rising interest rates. Large parts of the world cannot. That in a nutshell is the story of 2015,” warned Ambrose Evans-Pritchard, the well-respected International Business Editor of the Telegraph in London.

“Tightening by the U.S. Federal Reserve will have turbo-charged effects on a global financial system addicted to zero rates and dollar liquidity.”

Supporting his concern, yields on 2-year U.S. Treasuries have surged from 0.31pc to 0.74pc since October, and this is the driver of currency markets.

Under the leadership of Federal Reserve chair Janet Yellen, the Fed has engaged in a “pivot,” shifting concern from stimulating job growth to worrying about inflation, with the concern that without a tightening in Federal Reserve monetary policy, the U.S. economy could experience inflation as high as 5 percent in the next two years, a level not experienced in the U.S. economy since 2005.

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