{"id":64040,"date":"2022-11-07T09:18:36","date_gmt":"2022-11-07T14:18:36","guid":{"rendered":"https:\/\/olduvai.ca\/?p=64040"},"modified":"2022-11-07T09:18:36","modified_gmt":"2022-11-07T14:18:36","slug":"are-you-ready-for-the-coming-u-s-government-default","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=64040","title":{"rendered":"Are You Ready for the Coming U.S. Government Default?"},"content":{"rendered":"

Are You Ready for the Coming U.S. Government Default?<\/a><\/h3>\n
\n

\"\"<\/a>The vast herd of investors are a deluded crowd.\u00a0 Following the Federal Reserve\u2019s much anticipated 75 basis point rate hike on Wednesday the major stock market indexes jumped upward.<\/p>\n

Optimistic investors keyed in on the Federal Open Market Committee (FOMC)\u00a0statement<\/a>\u00a0and, in particular, the remark that the Fed,\u00a0\u201cwill take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation and economic and financial developments.\u201d<\/em><\/p>\n

Somehow this was perceived as being the precursor to a policy pivot.\u00a0 Yet during the post-FOMC statement press conference, Powell clarified that,\u00a0\u201cIt\u2019s very premature to be thinking about pausing.\u201d<\/em><\/p>\n

Stocks then fell off a cliff.\u00a0 The Dow Jones Industrial Average (DJIA) closing out the day with a loss of 505 points.<\/p>\n

Will there be a pivot, pause, or no pivot?\u00a0 This is the wrong question to be asking. \u00a0The reality is the major stock market indexes have much farther to fall before the bear market is over, regardless of if the Fed pivots anytime soon.<\/span><\/p>\n

If you recall, the Fed began cutting interest rates in September of 2007.\u00a0 Yet the stock market didn\u2019t bottom out until March of 2009.\u00a0 Similarly, the Fed began cutting interest rates in January of 2001.\u00a0 Still, the stock market didn\u2019t bottom out until October of 2002.<\/p>\n

Thus, using these two most recent bear markets as a guide, once the Fed finally begins cutting interest rates, which would come after inflation has begun to abate and a period of interest rate pause, the stock market will continue to fall for another 18 to 22 months.<\/p>\n

In other words, this bear market may not bottom out until well into 2025.\u00a0 What\u2019s more, the entire dollar based financial system will likely blow up sometime beforehand.<\/p>\n

How\u2019s that for a grim outlook?<\/p>\n

\u2026click on the above link to read the rest\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Are You Ready for the Coming U.S. Government Default? The vast herd of investors are a deluded crowd.\u00a0 Following the Federal Reserve\u2019s much anticipated 75 basis point rate hike on Wednesday the major stock market indexes jumped upward. Optimistic investors keyed in on the Federal Open Market Committee (FOMC)\u00a0statement\u00a0and, in particular, the remark that the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[124,195,12043,431,11763,827,834,33358],"class_list":["post-64040","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-debt","tag-economic-prism","tag-interest-rates","tag-mn-gordon","tag-united-states","tag-us","tag-us-government-default"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/64040","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=64040"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/64040\/revisions"}],"predecessor-version":[{"id":64041,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/64040\/revisions\/64041"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=64040"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=64040"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=64040"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}