Saturday, October 3, 2015

Nomi Prins: Fed Scared to Raise Rates

Nomi Prins does a new online interview with Greg Hunter and she talks about the problem the US Fed now has regarding what to do with interest rates. Here is a link to the video interview and below is a summary of it from Greg Hunter's web site. After that, a couple of added comments.


"Former top Wall Street banker Nomi Prins says forget about a Fed Rate Hike in December. It’s not going to happen. Prins explains, “They are not going to raise rates in December. I didn’t think they were going to raise rates in September. . . . It wouldn’t have made sense for that to happen, and it’s not going to make more sense for the same reasons for December. In the next three months, economies thought the world will not be repaired, markets will not be stable, currencies will not be stable, and all of a sudden, interest rates will not have the need to rise to hurt other countries who are reducing their rates. So, the Fed is not going to move in December. . . . The factors around the policies, around economy, around the markets, don’t lend themselves to doing that. So, she (Janet Yellen) is in a catch 22 of her making and of the Federal Reserve’s making. The choice was made to bail out the financial institutions and prop up the markets with artificial money, and printing money, and reducing the level of interest rates, and reducing the level of currencies relative to the dollar throughout the world. That was the decision that was made. . . . The talk is ‘we will see what the economy does. We’ll see if unemployment is better. We’ll see if inflation is still low, and then maybe we will think about it.’ That is all code for we are not going to think about it because we are scared to move and cause a worse situation than the one we already created. ”        

. . . . .

"How do people protect themselves? Prins says to hold cash and explains, “People should be out of this situation, and they should have gone into cash earlier this year. . . . I am talking about holding cash and paying down the things that you own. I am talking about basically taking a physical lock on what you have. Yes, you can keep some cash in the banks . . . . You need to keep it practically for paying bills and mortgages and so forth. There has to be a minimum amount in order to do your personal business, but beyond that, I believe this is a good time to hold on to cash. Being out is the thing that protects most individuals right now.”


My added comments:

In this interview Nomi Prins offers her thoughts as noted above on what people need to consider doing at this time due to the market volatility that exists. She says holding some cash is a good idea. This ties in to an article she wrote earlier this year on her blog. She also points out in the interview that the possibility of a bail in for depositors is always looming if we do indeed get a severe crisis in the future.

She did not mention holding gold in this interview so I reached out to her to ask if she had thoughts on that. She indicated that she felt holding cash was the best idea for now during these early stages of volatility and possible transition to worse conditions in the markets. She thinks gold may catch a bid later on in the process so investors need to stay alert and informed as things unfold.

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