“There
are two major events underway which everybody should be paying close
attention, Eric. The first one is rising interest rates. You and I
have already focused on this point to some extent, but we saw another
huge surge in rates to a new multi-year high after the unemployment
report on Friday, which is very telling. We need to look at this rise
in interest rates in relation to an economy that is barely crawling
along.
Here we are nearly five years after the 2008 collapse, yet people are still looking for an economic recovery....
“Of
course there have been some bright spots, but they are isolated. The
economy remains in a weak state and won't reach its pre-collapse level
until employment goes back to its previous high, with people once again
filling the quality jobs they previously held, rather than the part-time
and hamburger-flipping positions that have distorted the unemployment
report by making the headline number look better than it really is.
Yet
the Fed continues to purchase more government debt, as its balance sheet
last week reaching another new record high with total assets of $3.49
trillion. The Fed is not tightening monetary policy, so why are
interest rates rising even though the economy is weak and the Fed
continues to purchase debt for its QE program?
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