The free markets, economics, and statistics employed to speak about the financial picture we face is so perverted by central bank debt issuance that no one including the central bankers know what is going to happen.
Seven years of Fed manipulation into stocks, bonds and commodities have produced nothing. The global economy is at zero growth on average and the central bankers are at a loss for what to do.
With the amount of liquidity (future debt to be paid by our children) central banks have issued, the Dow should be hitting 35,000 with Apple’s stock near $300 and inflation running high, since wages would have doubled over the time.
None of that has occurred, why? because all of the “liquidity” is trapped in the hands of the banks balance sheets. Sequestered to prop up balance sheets so damaged that they cannot be repaired without declaring bankruptcy.
Most economic theories don’t work anymore, so when some talking head says “that if this happens, then that will happen” he or she is banking on an outdated theory that in practice doesn’t work anymore.
Even the basic tenet of supply and demand has been perverted. Look at US bond offerings. The more they issue the price goes up with yields hitting new lows.
No, this is a new paradigm of economic theory for a (mis)managed economy. So for anyone to call for something dire to happen to the economy based on historical precedence they are misguided or in on the game.
This post truly explains why the Federal Reserve and Janet Yellen appear clueless about when and how to raise rates. They are relying on PhDs in a subject that is arcane.
They might as well be buggy whip makers trying to repair a timing belt on a car engine. The two objects are made of rubber and provide propulsion but that is where the similarities end.