The Fed Will Do The Unthinkable & Crash The Economy | Serious Pain Ahead!

The Federal Reserve is moving to crash The economy they have no choice and Power is trapped interest rates are Going to keep rising and my base case Now is 5.5 at the very least even BlackRock believes that rates are going Up to six percent and stay there for Extended period of time I want us to Understand how Jerome Powell has Miscalculated horribly with his Statements the Federal Reserve is losing Any credibility they have left now back In February Powell told the world that We are in the early stages of this Inflation but we all know that he's Daydreaming about the economy any monkey Knows that prices are still elevated and The inflation crisis isn't over yet and Guess what the FED is now doing a Dramatic U-turn he knows there's no Escaping the pain according to power the Latest economic data have come in Stronger than expected which suggests That the ultimate level of interest Rates is likely to be higher than Previously anticipated the Fed was Trying to influence the economy using Just words power doesn't want to pay the Price of a recession but it's now Impossible it's now too late he will Have to raise rates to crush inflation So if you're having to stocks or Considering buying real estate things Could get really ugly very soon now I

Wanted to take a look at the yield curve Today and inversion is a powerful Predictor of a recession he has Forecasted all nine recessions since 1955 with only one false signal that's a 90 accuracy about the U curve inverts it Tells us that a recession is likely Coming within 6 to 24 months and I don't Know about you but I trust the yield Curve much better than the federal Reserve's forward guidance and what do We have the steepest born yield Inversion since the balker era of the 1970s things are really getting very bad Now the market is predicting a hard Landing and the Day of Reckoning is Coming just take a look at the treasury Yields a six month is paying about 5.2 Percent while the 10 year is well below 4 and this tells us that investors are Fearful you are putting lots of money Into Bonds on the long end money is Getting sucked out of the system and the Moon is getting Ultra bearish and we Have to realize that power is trapped Between Biden and Putin and he can't Control what both of them are doing to The global economy let's understand that Power only has one tool to control Inflation which is Raising interest Rates it's a horrible tool but it can Only control the supply of money and It's only partial control but when power Was busy sucking money out of the

Economy we have the US government busy Pumping money into the system right they Are still spending like crazy the fiscal Policies out of control and still at Odds with the federal reserve's monetary Policy and let's just use one great Example which is the defense budget of The United States we have the U.S Senate Passing a record 858 billion defense Budget for 2023 which includes a pay Increase for the troops and buying tons Of weapons and now the Pentagon is Seeking another 835 billion from the U.S Government for defense bill it up there Is a total of nearly 1.7 trillion Dollars and we know this isn't going to End because they are chasing the Chinese Boogeyman who is also increasing its Defense spending by over seven percent Now the problem with war spending is the Inflation chaos you are unleashing in Real time you are borrowing money from The future on printing it through the Federal Reserve to buy raw materials From the open market you're buying oil You're buying Metals you're shrieking The supply of Commodities while Expanding the money supply and this is What the Federal Reserve has to deal With they have one time and time again Their rate hikes won't be enough if Government spending stays high power has No choice but to raise interest rates to Destroy demand from the everyday job

Because obviously he can't possibly tell Biden to stop spending and this brings Us to Powell's other inflation nightmare Which is Putin now if you have been Following the economic War you probably Know what Russia is doing Russia is Striking back on the G7 oil price cap With their own counter strategy they Want to keep inflation high in the west Russia has rerouted the majority of Their oil away from the West towards Asia we can see the volume loss to Europe has been taken up by Asia they Ramped up their Russian oil imports by Over a million barrels a day now Putin Has also called oil production by five Percent in March and it's moving for Deeper oil export Cuts in Western ports Which is only going to cause inflation To go up now the U.S has to compete with Europe for a smaller pool of oil and gas Which is going to keep inflation high And when your energy costs are elevated Everything goes up right gas gets more Expensive and food prices also saw and That's why power is trapped he can't Control the supply side of the equation So he can only hike rates up to destroy Demand but here's the daily truth power Actually knows what it will take to Crush inflation he knows you have to Destroy a ton of jobs and crash the Economy to put the inflation Genie back Into the bottle in the latest Senate

Hearing power revealed his hand and we Have to prepare for chaos in his Testimony before the Senate Banking Committee power was cornered and he Revealed daily truths listen to this Exchange between him and Senator Kennedy Kennedy asked Powell you're raising Interest rates to slow down the economy Are you not power responded Yes to cool The economy off Kennedy followed up and One of the ways you measure your success Is the unemployment rate is it not Powerful finally admitted that it is one Of the measures indeed now Senator Kennedy then projected if history Repeats itself the unemployment would Have to raise to seven percent just to Get inflation down to 4.4 percent which Power had no choice but to agree and This tells us that the Federal Reserve Is on the train to unemployment land Remember the feds bipolar dual mandate The promised land of both low inflation And maximum employment but we need to Look at external signs The Superficial Metrics which power is still looking at Inflation is still at 6.4 percent Rising Half a percent in January but Unemployment is still at a record low of 3.4 percent with job openings staying Elevated have we all know service Sector's job and not really painting the True picture but Powell doesn't care all He sees is a tight labor market and

Here's the big one Paul just confirmed His conviction to crash inflation at the Expense of jobs and it's important that We pay attention to his sparring session With Elizabeth Warren she asks him how Would you explain your view that people Need to lose their jobs and they told Her the truth saying I would explain That inflation is extremely high and It's hurting the working people of this Country badly and we are taking the only Measures we have to bring inflation down And this is where things get really Brutal Warren asks him and putting 2 Million people out of work is just part Of the course and they just have to bear It now power almost lost it and fired Back will working people be better off If we just walk away from our jobs and Inflation remains five to six percent Now the writings on the wall guys he Knows there's no escaping the pain and He's prepared to be the bad guy if Everything comes crashing down Jerome Power is prepared to be the villain and The market knows this well they know That eventually interest rates will have To go higher than the inflation rate Remember that back in the 1980s Inflation went well above 12 percent it Was crazy high and the Federal Reserve There to hike rates to 20 yes rates had To go much higher than inflation and They stayed elevated for quite a few

Years we have Traders on Wall Street all Betting that the Federal Reserve is Going to hike to six percent or more Hedge funds are starting to bet heavily That the FED is going to tighten all the Way to six percent in December and still Stay above 5 by June 2024 so we really Need to sit back and ask ourselves how Much more can the economy endure higher Interest rates because the collateral Damage will start the stock market and The real estate market and if those Collapse investors will start to get Freaked out and run away then we could Start to enter a daily asset deflation Spiral so let me put on my Doctor Doom Thinking cap and analyze how bad the Situation can really get now I'm not Saying that the collapse is coming Tomorrow but we have to take higher Rates more seriously and let's just take A look at the Sheila p ratio it is still At a crazy high of 29 compared to the Mean of 17 Wall Street is still Overvaluing stocks all it takes is for Serious earnings recession to hit Equities and we could see the multiples We are just back to reality we have Morgan Stanley telling us that the Markets are on borrowed time and U.S Stocks are about to crash again they Also pointed out to the overvalued PE Ratio showing that stocks are just as Overvalued as they were before last

Year's crash now obviously this isn't Good news but we are still in a Downtrend in equities You Could See the S p revisit the lows of 3600 again at The very least before a rebound now I Want to say that that's as bad as it Will get but if we look at real estate The picture is just as Grim now Homeowners they have already lost 2.3 Trillion dollars from the recent housing Correction in but we know rates are Going to keep heading up possibly all The way to six percent or more just take A look at Bank of America's APR rate Which includes the interest rates and Other fees it doesn't matter what type Of mortgage you are getting a 30-year Fixed rate or 10-year adjustable rate You are still paying over seven percent Just to get the loan so if power hikes The FED funds from 4.5 to 6 just imagine How high mortgage rates will get if Mortgages hit eight or nine percent I Think you'll see a generation of people Just giving up on home ownership the Monthly payments will be near Unaffordable so how bad can real estate Crash now we have the Federal Reserve Themselves telling investors to brace For 20 drop and they have backed it up With some terrifying evidence and According to this chart from the FED we Can see the U.S housing market is in Huge trouble with a big correction

Looming the price to income ratio is a Very popular measure of how affordable Home prices are the higher it is the More unaffordable housing is for people And what do we have the U.S price to Income ratio which is the black line has Skyrocketed to 116 today within just two Years the rest of the world is under 90 Showing that American home prices are Out of whack this is even higher than The price to income ratio back in 07 Before the 08 housing collapse happened And if a crash happens today this is Going to be very painful we are looking At a 19.5 percent decline to bring American housing back in line with its Fundamentals so just be aware that Slightly more downside to go in property Prices and it's not just residential Real estate that's in trouble commercial Properties globally are also plunging to Hell thanks to higher rates we have a Massive real estate player Blackstone Defaulting on a 530 million euro Bond Backed by real estate they even block Investor withdrawal in their 71 billion Dollar property Investment Trust now Investors they are running away from Real Estate and the chaos is so bad they Are blocking redemptions and this is Only going to get worse as power Continues to high grades because central Banks around the world they take their Kill from the Federal Reserve especially

The ECB but that is just the tip of the Iceberg we know how bad things can get As rates go up right people get poorer And spending will dry up and it isn't Just higher rates they are sucking money Out of Main Street the FED is also Sucking money out of Wall Street and the Big Banks now the Federal Reserve is Still leveraging its balance sheet they Have reduced their U.S Bond Holdings by Over 600 billion dollars plus if we look At the reverse repo facility we can see Over 2 trillion dollars still hiding Inside the big Banks they're not Circulating their money the economy Because the Federal Reserve has set up The ultimate risk-free trade for them There's no point in loaning money or Giving mortgages when the reverse repo Rate is at 4.3 percent that's above the 10-year yield is free money with Virtually zero risk so just imagine what Will happen as the FED funds rise Towards six percent we will see the Dollar in decks continue to move up as Well yes it sounds great for the U.S Consumer a stronger dollar seems Fantastic Until you realize it destroys Global demand as well a stronger dollar Pushes many emerging economies closer to A currency crisis and when their Inflation Source no one has money left To buy American made Goods so everyone Loses but rates still have to go up

Because inflation is just too high so Brace for impact guys that SMP has Already crashed to 3 900 and something Tells me that this collect isn't over Yet but let me know what you think in The comments below will the Federal Reserve hike rates of six percent or Even higher are you prepared for Economic collapse let me know in the Comments below stay safe be sure to Smash the like button and subscribe as We navigate through this crazy time