Just finished reading an article from Silver Doctors and here's its summary:
The global economy is suffering from both sovereign and business debt amounting to over $150T (Source:IMF). As for the US, including unfunded liabilities, their total debt is $100T. And yet with this huge debt, the dominant narrative is one of economic recovery. And to confirm this narrative, the Fed has just recently raised interest rates and promised to increase 3x more this 2017. Then we have President Trump and his administration with its massive infra spending, deregulation and lower taxes. Will these programs cause the US to solve its sovereign debt problem or will they plunge the US deeper into debt?
This middle of March, the US debt ceiling will be hit. Without a change in monetary policy, servicing this debt is indeed a big headache. In fact, higher interest rates will result to increasing defaults and bankruptcies worldwide. And so Deepcaster anticipates that before June, the Fed will back off from its hawkish statement and will shift to monetary easing. This monetary policy is more consistent to finance the agenda of the new administration. The trouble is, once this shift is made, there will be massive sell-off of USD and the onset of hyperinflation will take place. This will boost oil and gasoline prices. To prevent this outcome, the new administration has to find the way how to solve its sovereign solvency issue and how to deal with the impotence of the Fed. With this kind of economic scenario, I anticipate that excessive speculation and great market volatility will follow.
Source:
www.silverdoctors.com/gold/gold-news/surmount-impending-markets-shocker-to-profit-protect-deepcaster
The global economy is suffering from both sovereign and business debt amounting to over $150T (Source:IMF). As for the US, including unfunded liabilities, their total debt is $100T. And yet with this huge debt, the dominant narrative is one of economic recovery. And to confirm this narrative, the Fed has just recently raised interest rates and promised to increase 3x more this 2017. Then we have President Trump and his administration with its massive infra spending, deregulation and lower taxes. Will these programs cause the US to solve its sovereign debt problem or will they plunge the US deeper into debt?
This middle of March, the US debt ceiling will be hit. Without a change in monetary policy, servicing this debt is indeed a big headache. In fact, higher interest rates will result to increasing defaults and bankruptcies worldwide. And so Deepcaster anticipates that before June, the Fed will back off from its hawkish statement and will shift to monetary easing. This monetary policy is more consistent to finance the agenda of the new administration. The trouble is, once this shift is made, there will be massive sell-off of USD and the onset of hyperinflation will take place. This will boost oil and gasoline prices. To prevent this outcome, the new administration has to find the way how to solve its sovereign solvency issue and how to deal with the impotence of the Fed. With this kind of economic scenario, I anticipate that excessive speculation and great market volatility will follow.
Source:
www.silverdoctors.com/gold/gold-news/surmount-impending-markets-shocker-to-profit-protect-deepcaster
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