ECONOMIC UPDATE: Higher Interest Rates Rise, Deeper Economy Will Fall
As interest rates go up business profits will decline, financial stress will increase and the deep-in-debt businesses and hedge funds that went on the cheap money borrowing spree during the COVID War
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It’s a numbers game. And of course like most games, those dealing the cards can rig the game.
Oh what wonderful news last week!
With more jobs created than The Street anticipated, equity markets soared on the “news” that despite the Bankster Bandits raising interest rates for the 10th time in a row, non-farm payrolls increased 253,000 for April.
Forget the fact that the Presstitutes basically ignored the facts that the Bureau of Labor Statistics bureaucrats slashed March’s job count from 165,000 to just 71,000.
And remember the strong February job numbers that also pushed equites up?
No, of course not, who would remember that back then the government said 248,000 new jobs were created but in fact only 78,000 were.
Yes, they jacked up interest rates 10 times since March 2022 bringing the current rates to 5 percent to 5.25 percent in their effort to fight inflation… inflation that the Fed and U.S. treasury secretary said was just temporary and then transitory.
Damage Ahead
And of course, whether they lied about inflation or were too stupid to see it was real, the Feds are blaming rising wages for inflationary pressures rather than their zero interest rate policy and Washington’s pumping in several trillion dollars to fight the COVID War… which spiked inflation and created HYPER-bubbles, as Gregory Mannarino notes in his article in this issue, “Gap Between the Stock Market, Reality, and Everything Else Is Near Insanity.”
As we have noted when they began the rate hike, the higher interest rates rise the deeper the economy will fall… but it would take many months for the economic damage to hit Main Street. That time is now.