The US Federal Reserve meets and raises interest rates
Janet Yellen, Official Federal Reserve photo
The US Federal Reserve raised interest rates:
WASHINGTON—The Federal Reserve said Wednesday it would raise its benchmark short-term interest rate for the first time in a year and expects to lift it faster than previously projected in the coming year.
Fed officials said they would nudge up the federal-funds rate by a quarter percentage point on Thursday, to between 0.50% and 0.75%, a move that could cause other household and business borrowing costs to rise as well.
They also indicated they see a brightening economic outlook and expect to raise short-term rates next year by another 0.75 percentage point—likely in three quarter-point moves. …
In mid-November testimony to Congress, Ms. Yellen said a rate increase was possible “relatively soon” due to the economy’s “very good” progress on job creation and inflation. http://www.wsj.com/articles/fed-raises-rates-for-first-time-in-2016-anticipates-3-increases-in-2017-1481742086
The US Federal Reserve has been excessively influencing interest rates to historical lows and this will not end well for the USA. Some believe that it has not intentionally raised them as earlier indicated to assist in the election of Hillary Clinton.
Now, because interest rates have been artificially low because of actions by the US Federal Reserve, raising interest rates is logical.
But because the USA accumulated more debt than it ever should have, this puts the USA at major risk when interest rates rise.
Donald Trump raised concerns about interest rates rising himself:
Donald Trump has voiced concerns about interest rates rising in the USA:
If interest rates go up one percent, that’s devastating. What happens if that interest rate goes up 2, 3, 4 points? We don’t have a country. (Egan M. Donald Trump: ‘I’m the king of debt.’ CNN, May 7, 2016)
The rates Donald Trump is concerned about are not outrageously high. And the Federal Reserve has announced that it plans to raise a total of one percent, which Donald Trump says will be “devastating.”
The USA is walking a dangerous line on its debt that will not end well.
Notice two items I saw last month:
The Fatal Flaw in Trump’s Economic Plan…
Does Trump’s economic plan carry the seeds of its own demise?
Trump’s blasted Janet Yellen and the Fed for keeping interest rates artificially low. But if he’s going to spend over $1 trillion on national infrastructure over the next decade, he might have to whistle a different number…
The Fiscal Times reports the findings of the Committee for a Responsible Federal Budget. Those findings show that if 3-month Treasuries rise to about 4% by 2018, and if 10-year Treasuries rise from today’s 2.24% to roughly 5.2%, “interest payments on the federal debt will soar to $505 billion in 2018.”
That’s $282 billion higher than last year. The point being, debt doesn’t seem to matter… until it does. University of Chicago finance Professor John Cochrane:
Here’s the nightmare scenario: Suppose that four years from now, interest rates rise 5%, i.e., go back to normal, and the U.S. has $20 trillion outstanding. Interest costs alone will rise $1 trillion (5% of $20 trillion) multiplying already unsustainable deficits! This is what happened to Italy, Spain and Portugal. Don’t think it can’t happen to us. It’s even more likely, because fear of inflation — which did not hit them, since they are on the euro — can hit us.
Macro economist Richard Duncan is a Daily Reckoning contributor. Bear in mind Richard’s a boomer for quantitative easing and ultra-low rates. But he says in no uncertain terms that interest rates must not be allowed to rise to normal levels. Richard recently fired off a letter of advice to President-elect Trump. From which:
You have… been elected at a time when the global economy is in grave danger of collapsing into a depression, one from which it might not recover for decades — if ever… If interest rates go up significantly, the bubble will pop and the New Great Depression will begin. One wrong move on your part and the economy will spiral out of control into a depression. It won’t be short and sharp like 1921. It will be long and devastating like 1929–1945.
One wrong move doesn’t allow much wiggle room. Richard says Trump can’t impose trade tariffs or cut taxes, which are both planks of his agenda. They’re both inflationary in Richard’s estimate. And inflation will bring higher interest rates…
Tariffs would drive up the price of imports and fuel inflation. https://dailyreckoning.com/fatal-flaw-trumps-economic-plan/
What’s Trump’s stand on interest rates and taxes?
Trump has been quoted on occasions expressing his views on the country’s current interest rate levels. Most of those times he has indicated that the current interest rate levels are very low for no genuine reason and that they should be increased. While he appears to have since softened his stance, there is no telling that once he is inaugurated he won’t make those changes.
This could have devastating effect on economy if not done cautiously, especially considering his plans on taxation. Trump has expressed that he intends to lower taxes. That does not go down well with his plan to impose trade restrictions on foreign countries especially ones that contribute significantly to the national debt.
How could this affect the American citizens?
Taxation and debt are sources of revenue for the country, so if you cut down taxes and impose measures that could reduce funding from foreigners via debt while at the same time increasing interest rates—it could cause an economic meltdown.
That would mean squeezing money out of the economy which for the one and only good reason would boost inflation. However, as many credit monitoring experts would say, the impact on citizens may not be as positive. http://www.marketoracle.co.uk/Article57217.html
Yes, the USA will again get high inflation.
Yet, the time will come when the USA will face problems worse than high inflation.
While Donald Trump did not accumulate the approximately $20 trillion in USA debt, that debt exists before his presidency even starts–and he will likely increase the debt.
Notice a statement from Donald Trump about debt:
I’m the king of debt. I love debt. (Egan M. Donald Trump: ‘I’m the king of debt.’ CNN, May 7, 2016)
Donald Trump also said:
I have borrowed, knowing that you can pay back with discounts. And I have done very well with debt. Now, of course, I was swashbuckling, and it did well for me and it was good for me and all that. …
Now we’re in a different situation with a country, but I would borrow knowing that if the economy crashed you could make a deal. And if the economy was good it was good so therefore you can’t lose. …
I don’t want to renegotiate the bonds, but I think you can do discounting. … I’m not even suggesting that we don’t borrow money at very low rates long term so we don’t have to worry about when they come due. (Kurtzleben D. Donald Trump’s Messy Ideas For Handling The National Debt, Explained. NPR, May 9, 2016)
Nobody knows debt better than me. I’ve made a fortune by using debt and if things don’t work out, I renegotiate the debt. Well, you go back and you say, ‘hey, guess what? The economy just crashed. I’m going to give you back half. (“Trump recession”? Presumptive GOP nominee fires back at Clinton. CBS, June 22, 2016)
It sounds like Donald Trump believes that debt is good and there is nothing wrong with defaulting or otherwise not intending to pay the total debt back.
The Bible says the wicked have that attitude:
21 The wicked borrows and does not repay, But the righteous shows mercy and gives. (Psalms 37:21)
Donald Trump has also filed for bankruptcy four times—presumably to not pay back debt, while he claims a financial worth around $10 billion.
He may consider that to be ‘good business,’ but his practices and intents sound biblically immoral.
Yet he, the Obama Administration, and the Federal Reserve all seem to love debt. The Bible teaches that debt is one of the curses that happen to the disobedient (Deuteronomy 28:15,44).
Furthermore, the Bible teaches that debt accumulation will be far worse than even many pessimists believe. Here is an end-time prophecy given to the prophet Habakkuk by God over 2600 years ago:
2 And the Lord answered me:
“Write the vision;
make it plain on tablets,
so he may run who reads it.
3 For still the vision awaits its appointed time;
it hastens to the end—it will not lie.
If it seems slow, wait for it;
it will surely come; it will not delay.4 “Behold, his soul is puffed up; it is not upright within him,
but the righteous shall live by his faith.5 “Moreover, wine is a traitor,
an arrogant man who is never at rest.
His greed is as wide as Sheol;
like death he has never enough.
He gathers for himself all nations
and collects as his own all peoples.”6 Shall not all these take up their taunt against him, with scoffing and riddles for him, and say,
“Woe to him who heaps up what is not his own—
for how long?—
and loads himself with pledges!”
7 Will not your debtors suddenly arise,
and those awake who will make you tremble?
Then you will be spoil for them.
8 Because you have plundered many nations,
all the remnant of the peoples shall plunder you,
for the blood of man and violence to the earth,
to cities and all who dwell in them. (Habakkuk 2:2-8; English Standard Version)
The USA is the most indebted nation in the history of humanity and those in it should try to understand this prophecy. Perhaps it should be noted that when I checked last week, the United Kingdom was listed as having the second highest amount of total debt (about 1/2 that of the USA).
The Anglo-American world order will come to an end. Accumulation of debt, and then having to pay historically ‘normal’ interest rates will strain the national economies of the USA and UK more than almost anyone will believe.
Those who think the current world order with the USA’s dollar on top will last through the end of this century are in error.
Those who will believe the Bible will take the words that God spoke to the prophet Habakkuk seriously.
The Federal Reserve has been an agent involved in the massive increase of debt in the USA, including debasing of its currency by diluting it through ‘quantitative easing’ and other scam programs. Essentially the Federal Reserve has diluted the value of the US dollar currency by producing more of it (usually electronically) without real backing. If regular people do something like this it would be considered to be counterfeiting–but for the US Federal Reserve it is technically supposed to be ‘legal.’
Over in Europe, the European Central Bank (ECB) has followed some of the USA’s lead in falsely creating money.
The economists at the Federal Reserve and ECB should realize the massive risk. But their humanist views and political views have made it difficult for them to act on the truth (cf. 2 Timothy 3″1-7; Romans 1:18-32).
The Federal Reserve has created a bubble that will one day explode!
While the ECB has partially followed suit, thus far it has not diluted the Euro like the US Federal Reserve has been diluting the dollar of the USA.
Several actions that the US Federal Reserve has taken during the time of the Obama Administration (as well as various actions in its past) have been biblically inappropriate (Isaiah 1:22; Habakkuk 2:6) and will contribute to the economic and military end of the USA (Habakkuk 2:2-8; Daniel 11:39; watch also Do these 7 prophesies point to the end of the USA?).
Although he possibly could extend the prosperity of the USA (cf. Daniel 4:27), the election of Donald Trump will not solve this.
Some items of possibly related interest include the following:
America’s Day of Reckoning 2017 Dollar Collapse? Economist James Dale Davidson says that a financial bloodbath will hit the USA and there is nothing that Washington can do to stop it. He claims that at least 57 nations have gotten together to dethrone the US dollar as the world’s reserve currency. He claims this can happen any day or in a few months. He mentions China, Russia, the AIIB, and gold. He claims his track record in predicting massive shifts in the past should assure people that he is right about this. He claims that there will be massive unemployment, near elimination of social security benefits, and more. Is James Dale Davidson possibly right on any of this? Dr. Thiel goes over many of his claims and explains what the Bible shows related to the coming collapse of the US dollar. This is a video.
Can the Bilderberg Group Affect 2017 and Beyond? The infamous Bilderberg Group met in Dresden, Germany from June 9-12 in 2016. This super-secretive group has been meeting since 1954 and has admitted to some subjects it would cover, but blocked out cell phone reception and forbid coverage of the discussions by the media. This is considered THE meeting to be part of for the elites who are working for a global-type of government. It is by invitation only. They are working towards their version of the New World Order as opposed to the good news of the Kingdom of God. At least one top leader apparently attended to try to get the Bilderberg Group’s support for a bid to become the next Secretary-General of the United Nations to replace Ban ki-Moon, whose term ends 31 December 2016. This is a video.
Collapse of the Euro and Dollar? War in 2020? Larry Edelson of Money and Markets described aspects of current economic difficulties and explained why he felt matters would get a lot worse. He said war, like World War III, could break out as early as 2020. What did he call the ‘granddaddy of all cycles”? Will matters go as he said? What does the Bible teach? Dr. Thiel provides biblical insights that secular sources often miss. This is a video.
Anglo – America in Prophecy & the Lost Tribes of Israel Are the Americans, Canadians, English, Scottish, Welsh, Australians, Anglo-Saxon (non-Dutch) Southern Africans, and New Zealanders descendants of Joseph? Where are the lost ten-tribes of Israel? Who are the lost tribes of Israel? What will happen to Jerusalem and the Jews in Israel? Will God punish the U.S.A., Canada, United Kingdom, and other Anglo-Saxon nations? Why might God allow them to be punished first? Here is a link to the Spanish version of this article: Anglo-América & las Tribus Perdidas de Israel. Information is also in the YouTube sermons titled Where are the Ten Lost Tribes? Why does it matter? and British are the Covenant People. A short YouTube of prophetic interest may be Barack Obama and the State of the Apocalypse.
Will the Anglo-Saxon Nations be Divided and Have People Taken as Slaves? Will the lands of the United States, United Kingdom, Canada, Australia, and New Zealand be divided? What about Jerusalem? What does Bible prophecy teach? Are there non-biblical prophecies that support this idea? Who will divide those lands? Who will end up with the lands and the people? Here is a link to a video titled Will the USA and other Anglo-nations be Divided and Their People Made Slaves? Here is a related item in the Spanish language ¿Serán divididas las naciones anglosajonas?
British are the Covenant People What do ‘British’ and ‘Britain’ mean in Hebrew? Are the descendants of the Anglo-Saxons people of the covenant? Does the British royal family connect to the throne of David? What does the Bible teach? What does history show us? Is there any DNA evidence related to British-Israelism? When did Christianity make it to the British Isles? Could Jeremiah have made it to the British Isles? What type of Christians made it to the British Isles? Did the last King of England believe in British Israelism?
USA in Prophecy: The Strongest Fortresses Can you point to scriptures, like Daniel 11:39, that point to the USA in the 21st century? This article does. A related sermon is titled: Do these 7 prophesies point to the end of the USA?
When Will the Great Tribulation Begin? 2016, 2017, or 2018? Can the Great Tribulation begin today? What happens before the Great Tribulation in the “beginning of sorrows”? What happens in the Great Tribulation and the Day of the Lord? Is this the time of the Gentiles? When is the earliest that the Great Tribulation can begin? What is the Day of the Lord? Who are the 144,000? Here is a version of the article in the Spanish language: ¿Puede comenzar la Gran Tribulación en 2016 o 2017? ¿Es el Tiempo de los Gentiles? You can also see the English language sermon videos: The Great Tribulation from the Mount of Olives and Can the Great Tribulation begin before 2020? A shorter video is: Can the Great Tribulation Start in 2016?
Protestant and Church of God views of the United States in Bible Prophecy Is the USA mentioned in Bible prophecy? Some Protestants say yes, while others say no. What does the Bible really teach? Learn the truth about this. There is also a video available: Is The United States Mentioned In Bible Prophecy?
Physical Preparation Scriptures for Christians. We all know the Bible prophecies famines. Should we do something? Here is a version in the Spanish language Escrituras sobre Preparación física para los Cristianos.
The Plain Truth About Gold in Prophecy. How Should a Christian View Gold? What do economists and the Bible teach about gold? Gold and silver may drop in value. Inflation/deflation? What do Christians need to know about gold?
Who is the King of the North? Is there one? Do biblical and Roman Catholic prophecies for the Great Monarch point to the same leader? Should he be followed? Who will be the King of the North discussed in Daniel 11? Is a nuclear attack prophesied to happen to the English-speaking peoples of the United States, Great Britain, Canada, Australia, and New Zealand? When do the 1335 days, 1290 days, and 1260 days (the time, times, and half a time) of Daniel 12 begin? When does the Bible show that economic collapse will affect the United States? Here is a link to a video titled: The Future King of the North.
The Gospel of the Kingdom of God This free online pdf booklet has answers many questions people have about the Gospel of the Kingdom of God and explains why it is the solution to the issues the world is facing. Here are links to three related sermons: The World’s False Gospel, The Gospel of the Kingdom: From the New and Old Testaments, and The Kingdom of God is the Solution.
Donald Trump in Prophecy Prophecy, Donald Trump? Are there prophecies that Donald Trump may fulfill? Are there any prophecies that he has already helped fulfill? Could a Donald Trump presidency be apocalyptic? A related video is titled: 13 Ways President-Elect Trump is Apocalyptic.
Who is the King of the West? Why is there no End-Time King of the West in Bible Prophecy? Is the United States the King of the West?
When Will the Great Tribulation Begin? 2017, 2018, or 2019? Can the Great Tribulation begin today? What happens before the Great Tribulation in the “beginning of sorrows”? What happens in the Great Tribulation and the Day of the Lord? Is this the time of the Gentiles? When is the earliest that the Great Tribulation can begin? What is the Day of the Lord? Who are the 144,000? Here is a version of the article in the Spanish language: ¿Puede comenzar la Gran Tribulación en 2016 o 2017? ¿Es el Tiempo de los Gentiles? You can also see the English language sermon videos: The Great Tribulation from the Mount of Olives and Can the Great Tribulation begin before 2020? A shorter video is: Will the Great Tribulation Start in 2017?
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