https://thegoldandoilguy.com/wp-content/uploads/2019/07/77.png 521 850 admin http://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.png admin2019-07-31 12:25:192019-07-31 12:25:19US Fed Set To Rattle Global Markets – Part II
Today is the day for the US Fed to announce their rate decision and we believe the 25 basis point rate cut is the only option they have at the moment that will attempt to settle foreign market fears and allow for a suitable “unwinding” of the credit/debt “setup” we highlighted in Part I of this research post. We believe out August 19 expectation of a global market PEAK and the beginning of a price reversion move is related to multiple aspects of the timing of this Fed move and the current global economic outlook. The unwinding of this debt/credit bubble will likely take many more years to unravel. Yet, right now the US Fed is trapped in a scenario they never expected to find themselves in. Either continue to run policy that supports the US economy (where rates would likely stay between 1.75 to 2.75) over the next 5+ years or yield to the global market and attempt to address a proper exit capability for this debt/credit “setup”. We believe global investors are expecting a massive collapse in the US stock market as a reaction to this move by the Fed and because of the expectation that another bubble has set up in the US. But we believe the actual bubble is set up in the foreign markets and not so much in the US. Yes, the US markets have extended to near all-time highs and the US consumer is running somewhat lean. It would be natural for the US economy to revert to lower price levels and for the US economy to rotate as “price exploration” attempts to find true market support. Yet, our fear is that the foreign markets are much more fragile than anyone understands at the moment and that a reversion in the US markets will prompt a potential collapse in certain foreign markets.