The following video is brought to you courtesy of the Epic Economist YouTube Channel. Click the video below to watch it now.
Most Americans do not understand this, but the truth is that the Federal Reserve has far more power over the U.S. economy than anyone else does, and that includes Donald Trump. Politicians tend to get the credit or the blame for how the economy is performing, but in reality it is an unelected, unaccountable panel of central bankers that is running the show, and until something is done about the Fed our long-term economic problems will never be fixed. In this piece, I am going to explain why the Federal Reserve is currently setting the stage for an economic collapse, a new housing crash and a stock market crash, and if those things happen unfortunately it will be Donald Trump that will primarily get the blame.
The Central Banks faced with signs of a global economic slowdown, are once again using low-interest rates and buying debt to juice up the global financial system. The U.S. Federal Reserve already cut its overnight lending rate. This is the first time since the financial crisis of 2008 that the Fed has cut rates.
In this competitive mortgage market, if a bank can make money offering a negative interest rate to borrowers, it will.
And voila, here’s your model for juicing the economy right into the bizarro world.
While it may seem illogical for a bank to pay you to borrow money, the central banks may see themselves as having no other alternative. It’s either that or they will have to let the debt-laden economy collapse without intervention.
And for mortgage lenders, a profit margin is a profit margin. Whichever way, you make it.
So there you have it. Expect a future in which the banks will make money by paying you to take a mortgage, and where you can make your debt easier to handle by taking on more debt.
All this while the central banks are constantly printing more and more money.
This cheap money flooding into the housing market means we are nearing the end of the road for the current housing boom with a huge housing crash.
It is a cheap money loan to fuel this housing bubble, which is really starting to verge on a ‘hyper-bubble’ as we see in the stock market today.
Even though the stock market has been booming, everything else appears to indicate that the U.S. economy is heading to economic collapse. When a new economic crisis and stock market crash didn’t hit in 2019, a lot of Americans assumed that the threat had passed. But just because a threat is delayed does not mean that it has been diminished. In fact, the coming economic collapse is probably going to be substantially worse than it would have been in 2008 because of the central bank manipulation that delayed it until this time.
Most big stock market crashes tend to happen in the fall, but the truth is that they can literally happen at any time. Whether you want to call it a “crash”, a “correction”, or something else, the truth is that a major downturn is coming for stocks and the only question is when it will strike.
And when things start to get bad, most of the blame will be dumped on Trump, but it won’t primarily be his fault.
It was the Federal Reserve that created this massive financial bubble, and they will also be responsible for popping it. Hopefully we can get the American people to understand how these things really work so that accountability for what is coming can be placed where it belongs.
When this new housing market bubble does burst, it will end as badly as the last one did.