Interest Rate Wars: Fed Trapped Between a Hard Place and a Grenade
May 9, 2025
The Fed is stuck between a hard place and a hard place. Given this option, they will choose the hard place, as unless you are looking for a one-way ticket to nowhere, you won’t pick the grenade. Note that for most of the last year and even this year, we have stated that the Fed would be forced to come out with another QE program regardless of whether it raised rates or not. We will go on record and state this: the Fed has nowhere to go; there is only one option available: inflate the money supply or die trying.
Central bankers worldwide have already started to work on the next level of QE. It’s called negative interest rates, and it’s just a matter of time before it comes to the U.S. The U.S. will hold out for a bit longer, as it wants to maintain the illusion of a somewhat stronger currency. Remember, this is a race to the bottom, and so the idea is to finish last instead of first. Interest rate wars (negative rates) are a way for the banks to punish savers and favour speculators.
The Fed is already stalling; this is a clear signal, as any, that they are already planning the next line of attack. And please do not fall for the notion that the Fed is panicking; having no choice is not the same thing as panicking. The Fed and its friends always win. Those who fight the Fed have a short life span. They have had decades to fine-tune this nefarious art of fleecing the masses, and they are experts at it now.
Those at the top have already used a vast portion of their paper wealth to secure valuable hard assets, so if the entire market were to collapse tomorrow, they would not lose anything. They will stand to make even more as they will come in and purchase everything in sight. However, the markets are not going to collapse tomorrow; one day in the future, they might, but that day is not tomorrow.
The war on Interest rates is on, and you cannot fight a trend in motion so that the U.S will have no option but to join the battle.
This economic recovery is nothing but a hallucination, and we will prove it without a shred of doubt with one chart.
In the next update, which we are currently working on, we will provide you with this chart, and the data will be sourced directly from the Federal Reserve.
We have identified several factors that suggest this recovery is a hoax. Still, instead of fighting the trend, we have taken an unconventional view: despite the economic recovery being a hoax, the markets are likely to trend higher. The weapon of choice now is to throw increasingly large sums of money at the problem, and this works because the masses are not ready to fight.
The can will be kicked down the road until the road ends or the can becomes so heavy that kicking the can rips the leg out of its hinges. We are still a long way from that point. The debt is going to increase to a level that will one day be labelled “as insanely unimaginable”. Don’t believe us. Well, then, tell us what you make of the fact that it took over 100 years to reach $1 trillion; now it surges by that amount almost every year.
Conclusion
The fear levels continue to rise, and all our gauges are now in the extreme zones. While the markets may trend lower, they are unlikely to crash. Instead of a crash, we are most likely going to end up with a great buying opportunity.
The war on interest rates means that deflation will be here for longer than most expect so while Gold will slowly trend higher, it is not likely to explode upwards as the Gold bugs are sitting and hoping and forlornly waiting.
Behind the Curtain of Conventional Wisdom
