Bond Market Troubles Will Take Away The Fed's Printing Press

Those cheering today’s sky-high asset prices say they don’t worry because “the Fed has the market’s back”

And they haven’t been wrong to-date. There’s no doubt that the Fed’s $trillions in monetary stimulus has pushed the prices of stocks, bonds, real estate and nearly every other asset class to all-time highs.

But the Fed’s ability to print money with impunity may not last forever. In fact, veteran money manager Bill Fleckenstein warns it could end this year.


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And Bill isn't alone.

61% of business economists say inflation risks are the highest they’ve been in two decades, and 46% of members surveyed by the National Association of Business Economists predict the Fed will be forced to hike interest rates sooner than it’s currently forecasting:

Economists say inflation risks highest in two decades and could force Fed to raise interest rates in 2022 (MarketWatch)

March 22, 2021 at 12:54 p.m. ET

61% of business economists say inflation risks highest in two decades

Federal Reserve leaders keep saying they don’t plan to raise rock-bottom U.S. interest rates for several years, but a growing number of economists think a speedier recovery and high inflation will force the central bank to act more quickly.

Some 46% of members surveyed by the National Association of Business Economists predict the Fed will lift a key short-term interest rate in 2022, at least a year before the central bank itself expects it will do so.


Bill predicts that such forced tightening by the Fed will throw today’s stimulus-addicted markets into anaphylactic shock, resulting in a heck of a lot of losses.

Which is why he agrees that now, more than ever, is the time to partner with a financial advisor who understands the nature of the market risks in play as well as the opportunities, can craft an appropriate portfolio strategy for you given your needs, and apply sound risk management protection where appropriate:

Anyone interested in scheduling a free consultation and portfolio review with Mike Preston and John Llodra and their team at New Harbor Financial can do so by clicking here.

And if you’re one of the many readers brand new to Peak Prosperity over the past few months, we strongly urge you get your financial situation in order in parallel with your ongoing physical resilience preparations.

We recommend you do so in partnership with a professional financial advisor who understands the macro risks to the market that we discuss on this website. If you’ve already got one, great.

But if not, consider talking to the team at New Harbor. We’ve set up this ‘free consultation’ relationship with them to help folks exactly like you.


This is a companion discussion topic for the original entry at

Bill Fleckenstein has been making wrong prediction forever. He’s an interesting guy, but net/net just one of many doomsayers that’s never right. And as for 61% of economists, as Paul Samuelson used to say, “Economists have predicted 11 of the last 3 recessions.”
Inflation is nowhere to be found except in raw materials, which make up 1% of GDP… oh, and in asset prices, which makes people richer. What’s the big deal?
There is the SUPPOSITION that the $1.6T in peoples’ bank accounts from all the stimulus will create a tsunami of demand… and thus shortages… and thus inflation. Well, maybe. But: 1) that will be one-off; and 2) the Ricardian Equivalence says most of this cash will be saved, not spent.
We see high food and energy prices it is said. Well oil prices are artificially juiced via OPEC supply restraints. The world is in fact awash in oil and without the constraints oil would be at $30/bbl, if that. Food? Yesterday at Publix you could buy a whole cooked and seasoned chicken here in Miami for $7. That’s SEVEN DOLLARS!!! And 9 oz of prime hamburger cost $5. Our family’s food budget has actually declined because in the COVIDene Era we actually are eating out less.
And many things actually cost less – airline tickets, cruises, telecommunications services.
We may get inflation, but from what source? Wage pull inflation? Not with 10m still unemployed, many perhaps permanently. And then there are all those unskilled illegals flooding in to take all the low-paying jobs. Are input prices going to experience rapid price rises? Will oil got to $120, copper to $10, lumber to $2000? Not likely.

We all know more or less how this is going to end, presumably with a holocaust in the US Treasury market and hyperinflationary destruction of the dollar. We’ve been talking about it for 12 years now. However, the level of useless forecasting has been uncanny, even in the alternative media. I can’t think of anyone who predicted the sheer size of QE and then the Covid followed by humanity’s completely absurd response, especially in the west. I’m sure there will be some more surprises coming soon.