In June, the Federal Reserve of the United States increased the fed funds rate by 75 basis points (0.75%), which was the highest increase since 1994. The Federal Reserve is expected to increase the fed funds rate by at least 1.75% more through the rest of the year of 2022. As of the June 2022 increase, the federal funds rate floats between 1.5% and 1.75%.
The Federal Reserve increases to the fed funds rate impacts a lot of things – the interest on the United States debt, which is well over $1 Trillion (if anyone can wrap their head around how much money that actually is), it also impacts anything with a current variable interest rate (car loans, mortgages, student debt, credit card debt) and all those things are also impacted for anyone that gets a new loan or credit card.
Increases in interest means that the cost of money is going up, but the level of inflation is also going up too. The May 2022 inflation was at 8.3%, which was higher than expected and the expectation of those in high ranking positions also decreased the GDP expectations of the country as well. All of this isn’t much of a shock if you pay attention. But most people don’t pay attention, and therefore, it is a shock. All they know is that stuff costs more, their money doesn’t go as far as it once did, wages are backwards compared to inflation and more-so when considering the increases in interest. As a result, they are angry and they don’t know who is to blame.
Sadly, the blame is decades, if not near a century, in the making. The blame is largely politicians and the Federal Reserve that manipulated things to their favor for the short term gain of getting elected or in the elected officials good graces to keep their positions at the expense of the future. It all snowballed faster with the measures taken to keep the market from freefall with the housing crisis in 2008/2009. I was one of the few that said “let it crumble”, but to ease the pain then it assured greater pain later. How much later, it might be now or very soon. Especially since the 2008/09 crash, the markets got used to easy money and low cost of money. The federal reserve was like a drug dealer that gave the financial markets it’s increased doses of the highly addictive drug of cheap and easy money to the point where the markets need to essentially go cold turkey off those highs. When you keep kicking the can down the road and make it the next guy’s problem, sooner or later, the bill must be paid and the proverbial “hot potato” is set to buzz any minute, likely to cause a free fall of the markets and life as we know it to not so pleasant outcomes. Like I said in one of my older posts (click here to read it), the crash that is coming, or we are likely currently in, will make the crash and great depression of the 1930’s look like a warm day in the sun where there’s just blue skies and we wished we had it as good as people did in the great depression. Honestly, I am surprised that we aren’t using ration books or something by now.
Do I have the answers? I don’t think I am better equipped than most to be the ultimate source of information. I do think I see things more clearly than others. In that regard, I use what I see to make decisions and such to put myself in the best position possible in the event of a “worst case scenario”. If it happens, I am better prepared than the majority; if it doesn’t, then I’m that much more secure in my mind should something else unexpected happen.
Based on what I am seeing now, I think that there is a possible world where in the United States, we could see a simultaneous world war, civil/revolutionary war among itself, and a greater depression than what was experienced in the 1930s. Perhaps add in a few strong hurricanes on the east coast too. If that were the case, what does life look like for you and your loved ones? Are you ready for such a reality? What can you do now to be prepared for such a world, whether it happens or not? Start coming up with plans to make sure you are ready for whatever your “worst case scenario” is. If you need help, Get my free report here to help you on your journey.
(c) 2022 Disaster Survival Answers
Real wonderful information can be found on weblog. “Education is what most receive, many pass on, and few possess.” by Karl Kraus.