It is quite interesting how one country in the world who by the way own the worlds currency can raise interest rates. The Great US Interest Rise is about to crash the Worlds Economies. When you have a country that controls the worlds money supply you have problems for everyone. First of all the other countries of the world that owe you money are in trouble. Big, big trouble.
When a country owes you trillions of dollars and have to pay you back in their currency when it is crashing things don’t look pretty. First of all the money of their country will be shrinking and flowing back to the lender. In this case it is the U.S. As these countries economies shrink more the flow of the money might result in a big problem. This problem just might be bankruptcy.
Jerome Powell is insisting that the higher dollar will create more wealth in the U.S. He is adamant that as the emerging markets crash and interest rates rise in the States they will be able to sell more goods. This sounds good in theory but Trump is placing Tariffs on them. When goods enter the country the border cops are stamping them with a big hit. So how does this make their products cheaper in the states.
Another double weirdness is if the American dollar and interest rates keep rising who are they going to sell their stuff too. Each other. Now if I were an American with a huge dollar difference and I wanted to buy something where would I go. Of course you would be patriotic and buy American or you could be cheap that take your high dollars and buy Mexico or even Canada for that matter. Why do you think Trump is against high interest rates. They make no sense.
The interest rate rise is eventually going to cause the pay back of the trillions of dollar loans to the emergency markets become impossible. Let’s put Canada which is my home town into prospective. Were not a third world country yet but may well be on the verge. Why? Glad you asked. The interest rates affect housing costs. Debt is huge in Canada and higher interest rates affect that. Tariffs might cause higher goods.
If Canada keeps pace with the U.S. in raising rates for the next couple of years then paying back these loans is going to become more expensive. When your Condo drops by half or your credit cards or home loan payments rise it is going to be a real pain to pay them back. No one is going to buy anything from the states in Canada when it is going to cost double. If Canada keeps the dollar low Trump will Tariff it. Canada always benefited trading with the high dollar in the States. It’s all over now baby blue.
Canada Interest Rates
Corporate debt will also have to be paid back. Most companies in Canada borrow from Canadian banks who have low rates. Canada cannot function if their rates are not close to our American trading partner which is massive. It keeps Canada going. Without the Yanks Canada would be in big trouble. We can’t even put an oil pipe line in to sell to China. Let’s face it our governments are too divided between the provinces. Trudeau has no idea on how to deal with a Red Neck like Trump.
Canada likes to pretend it fiddles to it’s own tunes but without the States it’s lost. Much like Australia is attuned to the fate of China and it’s need of resources. Canada is similar in it’s need to sell it’s resources to the world. With emerging markets crashing and there currencies Canada will have a very hard time selling their resources if interest rates rise is Canada. This is become quite the world dilemma.
More than ever it is becoming apparent that the U.S. and it’s Bankers only want one thing. As long as they are in charge they will own your fate and the fate of the rest of the world. Even sanctions can devastate a countries economy. Global dependence on the U.S. Dollar has been set. They are in control and there is nothing any one can do. As long as that dollar is in control of the worlds currency everyone is at their whim.
If you think the U.S. thinks twice about your welfare if you live in Canada, Mexico or Tim Buck Too you are in for a big surprise. They don’t give two Eskimo blubber tarts if you live or die. Dropping a bomb or two on you don’t mean a thing to the yanks. They and their stock market trillion airs got all the worlds money. And they plan on keeping it for a very long time.
Goods and Services
When all the money of the world is flowing back to the rich in the states who do you think is going to benefit. Their workers of course. Trillions of dollars are flowing back to the yankee business owners who own 90% of the worlds wealth. Trinkets will be falling off their tables and like dogs below you will be eating the leftovers. Maybe your stocks will rise a few bucks. Raises of 50.cents an hour could be yours. After all you will be paid in U.S. dollars, which is more valuable right now than gold.
An American worker at a fast food store making 15 an hour american is pretty high pay compared to another country with a crashing currency. Wealth effects are indigenous to giving people a sense of well being. After all in this era of high technology you can buy anything on the cheap. With the massive tax cuts owners of U.S. companies can sell their stuff anywhere in the world and make a killing. No one will be able to compete with them no matter how cheap their dollar is.
An Island in the Sand
Like any great Island built is a Sea of Sand when the tide comes in it will get washed away. How can a country stay great when it lends trillions to the world and like any gangster wants if back. Not only does it want it’s money back it wants interest. Lot’s and lot’s of interest. Can’t pay it back! You don’t pay it back and you are cut off. Just like a bad child these countries that don’t pay will be punished severely.
No other country in the world has wealth like the states. What will happen if they all stop paying them back. One country might just say sorry! No more cash. Another country might say, that’s a good idea. Screw you Trump. One more jumps in. The next thing you know the countries from around the world will all jump in. Ban buying from the States, refuse to pay them back. The dollar won’t look good then. It will be junk. The higher interest rates will cause housing and credit costs in the states to soar for the working classes. Companies will lay off workers because no one will be buying from each other. An Island in the Sand never lasts for long.