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December 19, 2018 | Fed’s Powell Inches Toward the Ledge

Rick Ackerman

Rick Ackerman is the editor of Rick’s Picks, an online service geared to traders of stocks, options, index futures and commodities. His detailed trading strategies have appeared since the early 1990s in Black Box Forecasts, a newsletter he founded that originally was geared to professional option traders. Barron’s once labeled him an “intrepid trader” in a headline that alluded to his key role in solving a notorious pill-tampering case. He received a $200,000 reward when a conviction resulted, and the story was retold on TV’s FBI: The Untold Story. His professional background includes 12 years as a market maker in the pits of the Pacific Coast Exchange, three as an investigator with renowned San Francisco private eye Hal Lipset, seven as a reporter and newspaper editor, three as a columnist for the Sunday San Francisco Examiner, and two decades as a contributor to publications ranging from Barron’s to The Antiquarian Bookman to Fleet Street Letter and Utne Reader.

Fed monetary policy inched toward suicide Wednesday with a 25-basis-point rate hike and a feint toward bumping up interest rates two more times next year. Are they trying to make certain that Trump doesn’t get re-elected? This interpretation is sounding less farfetched each day as the banksters continue to flout a global economic storm that is gaining strength by the week. It is manifest in the faltering economies of Germany and China, but also in the U.S., where the housing and auto sectors have begun to implode.

The Burden of Debt

If that weren’t enough to make Team Powell think twice about continuing to walk the walk, the collapse in oil prices is threatening to unleash a deflationary juggernaut on the financial world. The energy patch is where all the leveraging hellcats flocked when the U.S. began to emerge from the Great Financial Crash of 2007-08. Energy resources became a key source of collateral for heedless lending, which in turn created a global derivatives bubble with a notional value exceeding a quadrillion dollars. Every 25-basis-point rate hike increases the burden of debt on all of it, making a deflationary day of reckoning nearly inevitable.

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December 19th, 2018

Posted In: Rick's Picks

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