{"id":287934,"date":"2016-12-31T07:08:21","date_gmt":"2016-12-31T06:08:21","guid":{"rendered":"http:\/\/rinf.com\/alt-news\/newswire\/head-on-collision-between-perception-and-reality\/"},"modified":"2016-12-31T07:08:21","modified_gmt":"2016-12-31T06:08:21","slug":"head-on-collision-between-perception-and-reality","status":"publish","type":"post","link":"http:\/\/rinf.com\/alt-news\/newswire\/head-on-collision-between-perception-and-reality\/","title":{"rendered":"Head-On Collision Between Perception and Reality"},"content":{"rendered":"
\n

Economist Jim Rickards appeared on CNBC\u2019s \u201cSquawk Box\u201d<\/a> outlining his 2017 predictions for rate hikes, Trump stimulus, and the coming US recession. Rickards believes the markets are unwittingly pricing in a stimulus plan that will never materialize.<\/p>\n

\u201cTrump wants to cut taxes. Steve Bannon is talking to his advisors about a trillion dollars of infrastructure spending, cutting regulations. All of these things are viewed to be highly stimulative. That\u2019s why the market is going up. Pharmaceuticals are going up on the repeal of Obamacare, banks going up on the repeal of Dodd-Frank.\u201d<\/p>\n

The markets and the Fed have the perception that tax cuts and spending will continue despite the realities of a fiscally conservative congress, a $20 trillion of debt and a 104% debt-to-GDP ratio.<\/p>\n

\u201cBut here\u2019s the point,\u201d Rickards states, \u201cthe stimulus is not going to come\u2026 Congress has already said tax cuts have to be revenue neutral. That\u2019s going to take away the simulative effect. They\u2019re going to balk at more spending.\u201d<\/p>\n

While a March rate hike is likely, according to Rickards, the Fed will backpedal when the market corrects or when the next recession hits. \u201cThen the Fed will backpedal from there, starting with forward guidance and perhaps a rate cut later in the year.\u201d
\n\"\"<\/a><\/span><\/span>
\nThe Road to Ruin: The …<\/a><\/span><\/span>
\nJames Rickards<\/span>
\nBest Price: <\/span>$13.25<\/span><\/span>
\nBuy New <\/span>$11.56<\/span><\/span>
\n<\/a><\/span>
\n<\/span><\/p>\n

In such a situation, the scramble to move assets into wealth-preserving instruments like physical gold<\/a> and silver<\/a> will begin again. 2016 saw this movement many times by investors looking for safe havens. If Rickards is correct in his predictions, 2017 is likely to be a repeat of the same.<\/p>\n

Highlights from the interview:<\/strong><\/p>\n

\u201cI expect they will raise rates in March. I think that\u2019s on track. But beyond that, we\u2019re going to go into a recession or the stock market is going to have a very severe correction. Either one of those will cause the Fed to backpedal.\u201d<\/p>\n

\u201cThe Fed never turns on a dime. They take months to change policy. I think they\u2019ll raise in March. Then something will hit the wall, either the economy or the stock market or both. Then the Fed will backpedal from there, starting with forward guidance and perhaps a rate cut later in the year.\u201d<\/p>\n


\n\"\"<\/a><\/span><\/span>
\nThe Death of Money: Th…<\/a><\/span><\/span>
\nJames Rickards<\/span>
\nBest Price: <\/span>$0.29<\/span><\/span>
\nBuy New <\/span>$4.25<\/span><\/span>
\n<\/a><\/span>
\n<\/span>\u201cThere\u2019s basically a head on collision coming between perception and reality. The markets are rising on the Trump reflation trade. Trump wants to cut taxes. Steve Bannon is talking to his advisors about a trillion dollars of infrastructure spending, cutting regulations. All of these things are viewed to be highly stimulative. That\u2019s why the market is going up. Pharmaceuticals are going up on the repeal of Obamacare, banks going up on the repeal of Dodd-Frank.\u201d<\/p>\n

\u201cOver at the Fed they\u2019re thinking of two things. Number one, they believe in the Phillips Curve. I personally don\u2019t, but they do\u2026 with unemployment at 4.6% and that kind of stimulus coming and they know monetary policy acts with a lag, they want to get out ahead of inflation, so they\u2019re on track to raise rates. By the way, they want to raise them anyway independent of this because they\u2019ve got to raise them so they can cut them in the next recession.\u201d<\/p>\n

\u201cBut here\u2019s the point: the stimulus is not going to come\u2026 Congress has already said tax cuts have to be revenue neutral. That\u2019s going to take away the stimulative effect. They\u2019re going to balk at more spending. We have $20 trillion of debt. 104% debt-to-GDP ratio, so we\u2019re not going to get this trillion dollars of spending.\u201d<\/p>\n

Reprinted from SchiffGold.com<\/a>.<\/em><\/p>\n<\/p><\/div>\n

Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Economist Jim Rickards appeared on CNBC\u2019s \u201cSquawk Box\u201d outlining his 2017 predictions for rate hikes, Trump stimulus, and the coming US recession. Rickards believes the markets are unwittingly pricing in a stimulus plan that will never materialize. \u201cTrump wants to cut taxes. Steve Bannon is talking to his advisors about a trillion dollars of infrastructure […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[519],"tags":[],"class_list":{"0":"post-287934","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-newswire"},"_links":{"self":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts\/287934","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/comments?post=287934"}],"version-history":[{"count":0,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts\/287934\/revisions"}],"wp:attachment":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/media?parent=287934"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/categories?post=287934"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/tags?post=287934"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}