I wrote the following on October 30th:
“Here, in my view, is the thing: The Fed absolutely can’t raise interest rates under present bond market circumstances without setting off one hellacious firestorm that’ll burn right through the stock market (not to mention the economy) as well, and I suspect they know it.”
Ray Dalio, manager of the world’s largest hedge fund, and, to date, the most successful (in terms of investor returns) money manager in history, posted the following yesterday:
“…an interest rate rise would be devastating for markets and economies because the world is so leveraged long.”
Needless to say I think he’s spot on!
While, indeed, a rise in rates would play havoc, the flipside — which is what we’re back to in Europe, and now in the U.S. as well (to the tune of $60 bill a month) — is constant money-printing that’ll do virtually nothing more than further inflate asset prices, making for yet another whale of a bear market/recession when it finally arrives. I.e., the sooner the “devastation” the better…