The Fed will raise interest rates. To continue the madness of FREE MONEY to fuel inflation and market growth is a failed policy. Free Money has never fueled inflation. Market rate structures must return to develop a return to sanity in financial market space. Regardless of the adjustment pains. The credit bubble globally is already so insane it defies logic.

Think that in print there are 1.2 trillion US dollars in circulation and about 70% of that is outside the USA. Now think hundreds of trillions of dollar based transactions are occurring annually. Also think of the enormous base of bank secured deposits of which 300 billion in real dollars printed in the USA is a tiny fraction – less than 10% of the digital entries of your money at banks.

Said another way – your money is not in the bank. Your money is being invested by the banks in increasingly high risk investments of which enormous dollars have busted and lost and to which the bank still reports full value on their books. This is a crime in other industries. It is wrong in any industry. It is a reason the world is bankrupt really.

Greed. The lack of regulation to control speculation.

Speculation – side bets on which way a market will go in the future – up or down – is manipulating prices. Bubbles in energy and commodities are busting now as the speculation bets were vastly wrong – the commodities went down in value not up – and the margin calls on the insane leverage bets – requires those like China holding these bets to SELL their stakes in the commodities further spiral to the market downturn – from oil to nutmeg.

The delivering of the credit speculation bubbles is crashing markets but that is just the beginning. To return to sanity will take a new regulatory frame work. I’ve been calling for just that for years.

The Fed system globally is broken. Fed’s must be merged into national treasuries. Period. Remove the biggest cost to nations – printing money – and paying debt interest on each dollar printed. That itself is an insane thought by the GREEDY against society.

Let Treasury control monetary policy and Fed systemic management internal to Treasury. Merge it. Remove the interest fee. Stop the blood letting.

If we don’t take that single step – the SUPER CRASH and WORLD WAR repeat to financial history is a merry go round we count on revisiting. We can avoid it but time is rapidly running completely out. Speculation is destroying the future of nations.

IT is a failure of global regulatory frame work nothing less.

Berny Dohrmann – Chairman CEO SPACE INTERNATIONAL – spitting in the wind