555 TRILLION Reasons Why the Fed Won’t Let Rates Normalize

Wednesday, January 14, 2015
By Paul Martin

By Graham Summers
GoldSeek.com
Wednesday, 14 January 2015

The biggest question for investors today is that whether or not rates will rise in 2015.

The Fed may raise rates a token amount this year, but the move will be largely symbolic. With over $100 trillion in bonds and over $555 TRILLION in interest rate derivatives trading based on interest rates, the Fed will not be normalizing rates at any point in the future.

Indeed, former Fed Chairman Ben Bernanke admitted this in private during a closed-door luncheon with several hedge funds last year. Bernanke’s exact words were that rates would not normalize anytime during his “lifetime.”

So the Fed may raise rates from 0.25% to say 0.3% or possibly even 0.5%. But we won’t be entering a hawkish period for the Fed by any means.

The reason is very simple… any normalization of rates would implode the bond market.

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