Right. I think whatever the Fed does, we need to see what
happens. The credit market could get spooked by inflation
even if they don't raise, or raise 25 bp. If they do raise,
the carry traders might get spooked, and raise rates more
for the Fed. The dollar could break down if they don't raise
enough. In fact, it does not matter what the Fed does. The
Fed is cornered. There is inflation, and they can't raise,
cause it will unleash debt defaults. The Fed is trapped.
If they don't raise, they risk the dollar collapse. If they
do, they risk debt defaults, stock market crash, and dollar
collapse. If collapse and defaults happen, they can't
lower rates. What matters is the market reaction. It has
been very positive, it did not matter what the Fed did.
I think time is approaching when the markets become very
negative, and again it won't matter what the Fed does. |
