The Epocalypse: What Will D-Day Look Like?
By: David Haggith
GoldSeek.com
Wednesday, 16 December 2015
D-day, December 16, 2015. It’s now the dawn of that day when either the Fed Does or the Fed Doesn’t. It doesn’t matter. Either way, the economic apocalypse begins. Let me share something counter-intuitive. Whether the Fed raises interest rates or not, this Wednesday is D-day for the Fed’s economic recovery because the Fed is Damned if it does and Damned if it doesn’t. I’ll certainly show you why, but the counterintuitive part is that you can expect the market to crash upward as it leaves Wonderland and returns to reality.
What if the Fed doesn’t?
While I am certain, like many, that the Fed will raise rates, the US stock market may crash faster if the Fed does not. That’s one thing that is counter-intuitive to some. I believe it would drop the very next day out of shear bewilderment as people try to fathom what the Fed’s failure to raise rates means. Throughout 2015, the Fed has been building up expectations for its first raise in interest rates in nine years. In a world where every word of the Fed is dusted off with a soft-hair brush like an artifact in the sand, the Fed’s broad hints of an interest-rate rise are about as abrupt as the Fed gets.
Thus, the market actually went up in December when the jobs report was good, when it has been doing the opposite for years. Good news was perceived, finally, as good news, just as happened briefly in September when the market readied for a interest-rate increase. The market went up because a good report means the Fed is likely to do the rate increase and get it behind us so that everyone can stop fretting about it. There is a strong growing feeling at this point of “Let’s get it over with so we can stop worrying about it.”
If the Fed doesn’t do it on Wednesday, then it doesn’t happen in 2015. If the Fed fails for the last possible time this year to raise rates after setting up expectations all year long and heightening those expectations in the last couple of weeks, people will be exasperated that this word play never ends. Everyone who still believes in the Fed will wonder what went so wrong that the Fed still could not raise rates.
Questions will abound: Does the Fed not believe in its own recovery? Will we suffer the uncertainty of “will they/won’t they” like a repeating, nauseating dream forever? Does the Fed have no end game? Have they really painted themselves into a corner? Are the permabears right that we’re living in an illusion?
The Rest…HERE
