They are warning something, and the warning is coming from their bond guru. And the reason why this warning is so important is because the bond market has been shaky lately, but really, we haven’t seen a large correction in the bond market for over a couple hundred years. And when the bond market goes, everything goes. And the Federal Reserve is afraid of one special thing, and that is they are trying their hardest to not jump into the bond market and start buying bonds to bring down the interest rate. The truth is, because we no longer have the allies economically that we once did just a couple of years ago, there is nobody buying our bonds in a large enough sum, a big enough purchase, you know, bulk purchases, to keep our interest rates down.

That’s why rates keep rising because the bond market rates keep rising, even though the Federal Reserve stopped raising rates quite some time ago. This story is out of fortune, and it’s entitled BlackRock’s Bond Guru, Rick Reeder, says the Fed’s favorite inflation firefighting strategy is no longer working. The private sector has become a creditor now, and you have to also understand the reality of that, because whatever the government does, it lays on your shoulders, but really your children’s and their children’s shoulders because it must be paid back. It has to be paid back. Every time the government takes a dollar out of a loan from the banks, the government does not create money, type one if you know that, type two if you did not.

And it’s important if you didn’t know that to come to that realization. The government does not print money. It authorizes debt that it takes out from the Federal Reserve, which is a private bank, and it is owed back with interest. The Federal Reserve, a private bank, they are the ones that get to create money out of nothing. This is very serious. So when the government takes out money and spends it recklessly, type three if you agree, the government is spending money recklessly like a drunken sailor. It’s like giving AOC a microphone at this point. Give her a microphone.

It’s like a loaded weapon. She’s going to spew all kinds of stupid stuff. The government’s the same way with a checkbook, but the checkbook says Federal Reserve. Now, listen to this warning from the Bond guru of BlackRock. Very important. He’s talking about… Let me dive over to my other phone because this one just shut down. This is a story about how interest rate hikes are supposed to work and why they may not be working as intended right now, at least according to one of the bond market’s biggest names. Typically, when inflation becomes an issue in the economy, the Federal Reserve raises interest rates to fight it, effectively increasing borrowing costs for businesses and consumers nationwide.

The goal is to stabilize prices by incentivizing more saving and less spending, which slows economic activity. This orthodox monetary policy usually works quite well. Debatably, we’ve all witnessed its success over the past few years in the Federal Reserve chair Jerome Powell’s battle against inflation. But let’s take a little sideline here. Arguably, we could say that it worked because it slowed a lot of spending down. However, it didn’t slow enough spending. Therefore, we still have inflation, right? Regardless, if you believe the government numbers, which I believe are a complete lie, or the real numbers, when you go to the grocery store, put a gallon of gas in your tank, or try and pay your electric bill or your water bill, you see that inflation is much more this mere 3% that the government has announced.

However, it wouldn’t be anything if the Federal Reserve came in with a battle ax and said, we’re raising rates immediately to this percentage. We know it’s going to stop economic activity. Let everyone have a breather. Slow down. Stop economic activity. Just let’s take a breather. The only thing, any business or commerce that should be happening at higher rates are ventures that would be making lots of money. But yet, we live in a world where people speculate because money is cheap. It’s still very inexpensive to borrow if you think about it. At today’s rates, we’re just at historic norms, mortgage rates, for credit card rates.

When you look at the last 40 years, the last 20 have been something very different. I call it monetary heroine. It turns people into junkies. It turns debtors into crazed maniacs, and they do things with money they shouldn’t normally do. And the sad thing is those crazed maniacs work for the government and work for hedge funds. Once you realize how big of a deal this is, you start to see what’s going on. Now, it says, in an interview with Fortune Reader, this is the bond guru from BlackRock, argued, the Fed’s interest rate hikes are the wrong medicine for the economy’s current disease.

It’s ambiguous to me today, at best, whether a higher interest rate helps bring down inflation versus actually contributes to it, he said. Now, to his point, I’ve said this many times, in the beginning, when Jerome Powell came out and started to raise inflation, he did it so slowly, and it took such a long time, I said, this is going to actually exacerbate the inflation scenario right now, because what it’ll do, it’ll create FOMO in speculators’ minds, and they’ve got to borrow more real quick and take that money and spend it into the economy, and there’s going to be more dollars flowing around than good, so it’s going to cause more inflation.

And it’s also going to cause beyond FOMO, that sense of, well, I guess it is FOMO, it’s never going back. Well, I want you to understand rates are going back down to near zero, but here’s the problem. They’re going to go much higher before they do that. And over the long term, people are going to be squeezed, people are going to lose jobs, and we’re talking about by the millions. This isn’t going to be a pretty scenario if you don’t know what’s coming. The 14-year BlackRock veteran who oversees $2.4 trillion in assets at the world’s largest asset manager and is known as one of the leading voices in the bond market argued that the Fed may need to change its strategy and opt for rate cuts in order to fight the last remnants of inflation.

Now think about what he just said. They need to opt for rate cuts in order to fight inflation. We’re going to talk about how the Fed, and this is what they are afraid of doing. Because when they do this, it is going to be not only a signal to the entire world, central banks, their respective central banks, but also it is going to be a signal to Wall Street that the end is here. That also includes the final nail in the U.S.’s coffin of being the world’s reserve currency. He’s saying that they may need to change their strategy and opt for rate cuts to fight the last remnants of inflation.

It’s all because many low-debt cash-rich consumers and businesses, particularly baby boomers and Fortune 500 giants, are actually profiting from higher rates. The government spending-driven savings boom and asset price appreciation of the COVID era enabled these large businesses and well-off consumers to become net lenders rather than borrowers, according to Reeder. He is talking about an extremely small percent of the nation. He says if you think about what happened in the last couple of years, the public sector made a huge transfer to the private sector. Companies turned out their debt, individuals de-leveraged, and you have a dynamic where you have huge amounts of savings and money in money market funds, he explained.

Now, if you look at service-level inflation, some of it is because you have so much income flowing through the system with these companies’ individuals that it actually gets recirculated. Now, I’m going to tell you something that this bond guru will not say, but I guarantee you, if he’s watching this video and you’d be surprised at who is, this is the reality. The Federal Reserve could tomorrow decide to change the federal funds rate and lower it, thus lowering the money, the percentage, or how much it costs for banks to go in and borrow money from the Fed and go loan it to you.

Here’s the problem. Because like what I said earlier in many other videos, companies or countries are abandoning the US dollar for trade settlement, thus leaving a massive hole, black hole in the bond market and the treasury market because countries are no longer needing to go buy as many US treasuries or dollars from the Federal Reserve or the government to go and deal with trade. As a matter of fact, they’re becoming sellers. And like Reeder says with all these companies that got really rich on cash a couple of years ago and are outloaning it, they are not wanting to loan it at lower rates.

So if the Federal Reserve lowers their rate, banks and corporations and even wealthy individuals are going to be very hesitant to loan their money out at lower rates, especially when inflation is still out of control. Now, if that happens and the Fed lowers rates and nobody dives into the bond markets to buy government bonds, then what happens? They’ve got a lower rate somehow and they’re going to have egg on their face. So the Federal Reserve will become the buyer of last resort and they will start to buy bonds and put them on their balance sheet.

But here is the truth. The Fed is extremely afraid of who’s going to be president next. Because the Federal Reserve is a private bank, if they build up their balance sheet, thus creating a buyer of US treasuries and bonds, bringing down the rate, who’s going to pay them back? Because in their opinion, if the wrong president gets in, the wrong Congress, the wrong leadership, and I mean wrong as in right for America and right for the health of the future of America, they may not be paid back all that they’re owed.

Also, when they do this and they intervene into their own, to the US government’s bond market, it’s a signal to the rest of the world that they’re in serious trouble and no one’s here to buy the US bonds. This is what is going on. Now, it’s interesting that this warning comes from someone at BlackRock but you have to understand that BlackRock is imploding. This is the truth. They’re utterly imploding because they manage money. Just because they’re the largest fund in the world doesn’t mean they own a single property. As a matter of fact, BlackRock gave back one of their signature office buildings, their headquarters in Manhattan a couple of years ago, gave it back to the bank.

Please understand the ramifications of what I just said because they don’t even own their headquarter building. See, the emperor has no clothes. Whether that be the US government, BlackRock, or all these other massive funds that you believe are taking over the world, and they’re trying to buy everything they can, trust me. It’s an eternal machine and it’s going to need to be fed more dollars, more properties, more power. However, Enron was also the largest company on earth too at one time. Type V of Enron. You know what Enron is. Many people don’t.

Type VI if you’ve never heard of Enron. It’s important because it was the largest company at the time in its sector and people were afraid of it. It was getting bigger and bigger and bigger until everyone found out it had nothing to back it. Well, guess who doesn’t have anything to back itself? The Federal Reserve, the US government. Many people think that it’s the full faith and confidence the US dollar, which has nothing backing it, doesn’t have gold anymore. Others think it’s because the US government has a mighty war machine. Well, so did Hitler until he couldn’t afford or get fuel to his massive fleet of fighter jets.

His fleet of ships. See, it doesn’t matter how big your army is or how big your company is. When one small little linchpin gets taken out. And here’s the good news. The linchpin is being pulled out right now in the form of higher interest rates and the fact that the BRICS nations are pulling away from the dollar. You are at endgame right now. If you’re not preparing for hard times, but I’m not saying that you prepare for you having hard times, you set money aside because others are going to have hard times. And if you have your credit score solid, you have money in the bank, you have inflation hedges set aside, you are going to absolutely crush it.

This is the first time in your lifetime, as a matter of fact, in history that a certain percentage of the population that would have been otherwise left out in the past but now have the understanding and knowledge of economics. To get ready for this, to see the signs, you’re going to absolutely dominate it. Everyone, I hope you got something out of this. Thank you to everybody that signs up the newsletter. It’s free. It brings you updated things with what’s going on with the channel, videos, videos that don’t want to be shared, things like that.

I’ll put a link down below. I hope you have an awesome day. The Economic Ninja is out. Go crush it, everyone. [tr:trw].

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