(cont) If this is correct, then the Fed will want to keep the stock market stable and fairly buoyant so they can continue to normalize interest rates ('Job #1' in their mind). For the next several years while they raise rates, they don't want a runaway hyperbolic stock market that becomes an unstable bubble ready to burst. They want it stable, but they definitely don't want an extended big drop or stock crash since that would force them to stop normalizing interest rates.
Anyway, this is one way to analyze the situation. On the other hand, it could be the elites are in fact ready for the big SDR/Ice-9 crash now, and the act of raising interest rates is the trigger, and Trump gets the blame. In this scenario, US interest rate hikes boost the US dollar to the point where China is forced to break the yuan/dollar peg and do a mega yuan devaluation (as Rickards has described), which triggers the big financial crisis and subsequent SDR/Ice-9 solution. Trump's trade/tariff threats against China would get the blame instead of the Fed's rate tightening.
I guess time will tell. But if the first scenario is true, you definitely don't want to be short the market. And if the second scenario is true, you probably don't want to be mega short either due to the looming Ice-9 lockup of all brokerage accounts
, banks, money markets, and closure of stock exchanges - all your digital 'profits' will be frozen, and possibly lost forever into the ether of cyberspace.
However the short/puts route would work if there is a sizable stock market drop (not the big Ice-9 crash) that the Fed allows to happen. But why would they allow it to happen if their 'Job #1' is a desperate drive to normalize interest rates? Problems with the stock market would only force them to stop/delay raising rates.
The Fed would probably like to see a 5-10% correction in the market ideally, to put it on more solid ground and less in bubble territory. They might let that happen and then bring the juice back in to maintain the new level. That may be what happens sometime after next week's rate increase. They could let the market sell off/consolidate, and possibly forgo a rate rise in June, and then do the next rise in September.
Time will tell, but the consolidation would be temporary and limited, in which case you'd want to take profits on your short positions and not be a perma-bear, since the correction would reverse and resume a stable/upside bias.
AI
