Interesting commentary posted on the gold-eagle website….here’s an excerpt, followed by the link….
Many commentators have posited that the US Federal Reserve will not hike interest for several years. It is my contention that the Fed CANNOT raise rates EVER again. The reason for this is that some 80% of the $600 TRILLION in over the counter derivatives market is based on interest rates.
If even 4% of this is “at risk” and 10% of it goes wrong you’ve wiped out ALL The equity at the five largest banks in the US.
If you’re looking for the REAL reason Ben Bernanke is scared stiff about state of the US financial system and continues to pump money into Wall Street by the hundreds of billions despite the fact the stock market has hit new highs from the March 2009 lows (when the Fed first announced its QE program), you’ve got it.
China, on the other hand, not only WANTS to cool its monetary system, but CAN do something about it. To whit, the People’s Republic has already hiked interest rates once without warning on October 10 2010. Rumors are swirling that it’s about to do this again over the coming weekend.