The historic norm for interest rates at the Fed central bank level, the interest it charges member banks to borrow, has averaged 5% to 7% for 100 years.
The free money loose money policy, of ZERO INTEREST for free money, is abnormal and can not remain for the profit of the system. Higher interest encourages savings. Makes banks more profitable.
As 8th point to 1/4 point interest raise rises, quarterly, for years and years, follows the many years bringing the core interest DOWN to ZERO becomes a short term abnormality a number of market factors will occur.
Interest rate rises will create profit taking and portfolio shifting at the all time market high point. Which will be short in duration. The opportunities of the market have already factored in higher interest rates. The rush to beat the NEXT RATE rise will encourage investment for the trillions on the corporate side line. NOW will be the time to grow plant and infrastructure. Jobs will result. Economic boom will result.
The world markets have resided during a time the US DOLLAR remains the leading world reserve currency in which larger trades are always settled – energy – food – commodities – trade. A fiat currency as in China which is backed by currency government control and manipulation, lacks the capacity to act as a world reserve currency. Doing so is presenting holders of such currencies with enormous risk when SUPER CRASH flows into the market, which it always does during such change periods. No one knows when the trigger event to SUPER CRASH will occur. In todays world as in the last crash the trigger is most likely to be a DIGITAL WARFARE WEAPON such as caused the crash of 2008. Read GAME PLAN by Kevin Freeman to understand this risk area. Develop your own GAME PLAN the purpose of the book from this investment professional from Dallas Texas. Read Brad Thors PLAN OF WAR a global best seller based on Kevin Freeman’s work, they are buddies.
The world market will see the strength of the US DOLLAR against their currencies soar, as zero interest to park reserves into dollars becomes market interest. Trillions will flow from nations on corporations back into dollars again. Watch.
Goods for USA items will cost more as the dollar rises abroad.
Goods for world market made items will plunge against higher dollar to trade partners stimulating a boom period prior to SUPER CRASH.
In the short term diversification is the rule as always.
We have suggested you move from market investing to insurance investing. This allows you to craft liquidity and long term investments in guaranteed insurance products, which pay out higher than banks with full warranty on principle not available in market investments.
In Super Crashes of the past mutual funds scheduled liquidity events ( selling YOUR mutual funds ) nine to eighteen months into the future, as they had no cash to pay your liquidation in distressed markets. The contracts on market investing allow for scheduled and phased liquidation in problem markets. Did you now that? Your principle may go down for a year until the time you can effect the sell out. In Super Crash it may take a decade or more to return to where you once where.
To protect your resources we believe NOW is the time to move from market investing to insurance investing. Talk to your insurance professional, who knows investing strategy. Arm yourself with the information in GAME PLAN and chose your strategy wisely. Move high risk market investing to principle protecting still high return guarded insurance investing.
Thats our opinion and you may copy my blog to your mail list and circulate the information. Another good read on modern super competitive capitalism, we view as a fully failed model, replaced over time with cooperative collaborative capitalism between nations, as the outcome. We are in the change cycle. The book is REDEMPTION THE COOPERATION REVOLUTION by yours truly available today at Amazon.
Thanks to all my readers for sharing this Blog.
Berny Dohrmann – Chairman CEO SPACE INTERNATIONAL