Submitted by PM Fund Manager Dave Kranzler, Investment Research Dynamics:
Yes! Someone else who gets it. Every week we getting these dopes from the Fed coming out and saying “hey man, the Fed is behind the curve – time to raise rates.” But the evenbigger dopes are the dopes who believe the hot air. And now supposedly the Fed is on track to raise rates twice still this year.
The Fed has been on target to raise rates several times a year ever since Bernanke’s infamous “Taper” speech back in May 2013. Last time I looked, the flag flying above the White House was not a Japanese flag, but the Federal Reserve, Wall Street, financial media stage show sure looks a lot like Kabuki Theatre – quite literally, “the art of singing and dancing.”
Here’s one of the MAJOR reasons that the Fed won’t touch this rates – not this year and not next year: Housing Starts Unexpectedly Plunge 11.1%
May housing starts dropped 11.1% in May from April, with single family unit starts falling 5.4% and multi-family units dropping 18.5% (data from the link at the top). Although the month to month data reporting in the housing starts series has been volatile, there has been a definitive downtrend in starts since the beginning of 2013.
You can read the rest of this article I wrote for Seeking Alpha here: Housing: Look Out Below
A housing market that is on the precipice of re-collapse is just one of the reasons that the Fed will not be raising rates this year. The reason the Fed won’t be raising rates next year is because we may well have experienced a systemic reset by then…