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Scott M
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Why the Fed Is Afraid To Raise Interest Rates - Michael Pento - Delta Global Advisors

I agree with Michael on his analysis, but there was no mention of the impact. The FED only controls the overnight lending rate, and interest rates on all longer dated bonds are set by market forces (except when the FED engages in QE). So, rates on the 10-year treasury, for example will rise back to historical norms at some point in time. Lehman Brothers was worth $691 billion and would have collapsed the entire global economy if the government did not bailout the banks. Given the much larger numbers in terms of debt now coupled with the fact that the FED already has a bloated balance sheet, what will the outcome be when the "next Lehman Brothers" collapses? It is hard to imagine that the monetary system can survive the next crisis.

Commented 3381 days ago

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Beginning of the headline :Even though the major stock market averages are flat for the first six months of the year, by nearly every measure the stock market is still extremely overvalued. This point is not lost on Ms. Yellen and company, as the Fed Chair herself has recently assented that the current value of stocks are "quite high". Given this, the Fed must privately be afraid that even a small change in the Fed Funds Rate could serve as the needle that pops the massive bubble in the stock market. Exactl... Read More

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