Here, in the spirit of modest contemplation, we offer several hunches, inklings, conjectures, and guesses as to what quantitative tightening might mean. These are not predictions. They re merely a starting point from which you can extend out your own visions into the futur
Interest rates will rise. Asset prices, including bonds, stocks, and real estate, will fall. Credit will contract, yanking the thin rug the economy is resting upon right out from under it. GDP will decrease. Unemployment will increase in the face of declining labor participation.
Cash in hand will be king (at first), as several too big to fail banks will, in fact, fail. Numerous cities and several states will also go bankrupt. Hartford and Illinois are leading the pack in their respective category. More will follow.
The Fed will be forced to reverse course. However, efforts to push interest rates below zero through massive balance sheet expansion will have a negligible effect on stemming the economy collapse.
Thus, the Fed will inject fiat money not credit directly into the economy via helicopter drops. This may take the form of direct delivery of monthly electronic tax rebate cards to taxpayers and non-taxpayers alike.
This will trigger an earnest free-fall in the value of the dollar and of all paper currencies, as other central banks will be executing similar programs. Simultaneously, grocery stores will be cleared out and the shelves will remain empty.
Gold and silver prices, in fiat money terms, will launch into the stratosphere. This will be met with direct government confiscation. After that, things will really get ugly.
Yer İmleri