The Fed and other central banks created the inflation problem. Their solution to the inflation they created could turn the impending recession into something alot worse.
The US government has a $31 trillion deficit. Every time rates go up the interest on that unpayable debt rockets higher. Then think about the $13 trillion of consumer debt in the US and the $11 of corporate debt. As rates keep going up a chunk of this debt will be defaulted on. Then of course, the cost of mortgages and other loans such as sub prime cars loans will go up and squeeze living standards even more.
The Fed does not have a solution for this crisis of a totally insolvent financial system.
If China, Russia and other BRICS nations develop a gold back currency for conducting trade then the dollar will lose its status as the worlds reserve currency which will have major repercussions for all of us.
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