If Fed raises Interest Rates… will create the greatest economic collapse in modern times

Monday, February 16, 2015
By Paul Martin

February 16th, 2015

G20 Leaders Plead with Fed Not to Raise Rates

The degree of crisis that we are now moving into is just off the charts. The G20 finance ministers have urged the Federal Reserve to “minimize negative spillovers” from potential interest-rate increases. With the collapse of the Swiss/Euro Peg, they have been stunned into the realization of cross-currency borrowing. For decades, bankers have been marketing loans in different currencies as a means to reduce interest rate costs. However, once the bankers sell these deals, they just walk away.

The collapse in the Swiss/Euro Peg has exposed the amount of mortgages and loans in Swiss being found in Britain to Greece. This is a drop in the bucket. For the amount of debt issued in dollars has grown by 50% since 2007 and has now reached some $9 trillion. This the total amount owed in dollars by non-bank borrowers outside the USA. If the Fed raises interest rates as anticipated this year for the first time since 2006, higher borrowing costs for companies and governments, along with a stronger greenback, will create the greatest economic collapse in modern times.

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