It’s almost impossible to find a kernel of truth in the Empire of Lies. As is always the case, the outlook from the Federal Reserve is sunshine and rainbows. The President has the same erroneous view. But ignoring the biggest bubble that the Fed has ever created will not make it go away.
In October 2016, days to go before the US election, he said Trump would win. “Everyone was shocked but that is what happened – that was not a guess.”
These are hard claims to deny. But despite his Nostradamus-like powers of prophecy, Rickards has got things wrong. Indeed, he has been predicting the imminent arrival of a market crash for at least three years now. So far, nothing. But Rickards is convinced.
“Recessions are very hard to predict, but expansions do die,” he says. “We don’t have markets anymore because the Fed is manipulating everything. Their interest rate policy is being driven by the stock market – nothing could be more obvious.”
The Fed should be plotting an even path between the Scylla and Charybdis of higher interest rates and the market’s insatiable appetite for expansion, but so far it seems to have taken its course according to the whims of the latter. Rickards says the stock market is like a little kid – give it some candy and it will stop misbehaving. But it will soon want more candy.
“The Fed should be raising interest rates to prepare for the next recession and normalising interest rate policy but they can’t, not without sinking the stock market,” he says. “They’ve clearly decided that markets come first. But what do you do as an investor bidding up stocks when the only thing propping them up is the Fed policy?”
It’s a big house of cards ready to come crashing down at any moment – and the longer it goes the worse the conclusion. Rickards has warned us, at least.