This ‘fourth turning’ will be built up on massive debt, a sharp deceleration in the velocity of money with a concomitant collapse in credit and, I fear a domino like collapse of institution after institution, in one country after another.
Digging and with no sign of letting up either.
Jhagi Bhai
11

This! This is absolutely and entirely correct. The Federal Reserve raised interest rates today. Now they’re just waiting to see what the other Central Banks (ECB, BOE and BOJ) will do. I predict that they’ll all start raising rates in lock step. This is the beginning of the end. The end of the easy money, that the entire world economy is drunk on, is going trigger the mother of all crashes.

As F. A. Hayek said; the place to look isn’t the crash, it’s the boom you must fear. Low interest rates, expansion of easy credit, heavy debt loads and mal-invested resources creates the boom from which a bust shall surely follow. Just as soon as credit starts tightening businesses will stop hiring and start liquidating all those improper mal-investments.

The problem is with rates at such a low level, and the Fed having manufactured one bubble after another for the last three decades, they have nowhere to go except into negative interest rate territory. This will be coupled with the move to restrict cash as is already happening in India and Venezuela, to force people to rely on electronic transactions. The final stage of fiscal insanity will be a thing known as Bail-ins. It’s like the bailouts of 2007–8 but this time the shareholders, bond holders and even the depositors will pay to rescue the banks from insolvency. Then the only salvation will be the IMF and its’ currency SDR (called Special Drawing Rights). This is when the US Dollar loses its status as the reserve currency for international trade.

The next few years will be unlike anything that has ever transpired before. We are in truly uncharted territory. The end result here in the US will be hyper inflation as all those foreign governments holding our Treasury Bonds demand redemption. We’re F**ked

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