The Fed is on the edge of the fall of this card house

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The destruction was amazing … and we did not even carry the weight of the storm.

My husband and I returned after the evacuation of southern Florida, and the amount of damage we encountered was outstanding.

Power lines at low speed. Shrubs destroyed Broken windows. And millions of people without power.

Already, almost two weeks later, the area in which we live and work is still trying to recover. I continue to hear stories of people without power. The electricity in our office is accidentally cut as a repair line for workers.

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The restoration of the storm will be ongoing for the next weeks – and for the Florida Keys in the coming months.

 

And there’s still a storm ready to overthrow the United States and leave behind you a painful remedy that could go away from your wealth if you’re not ready.

 

We have a problem

 

The great recession left not only the United States, but the whole world in a financial crisis. And the first order of business: Spend!

 

Nearly all governments have committed themselves to the promise to get out of the catastrophe.

 

Within the United States, we have made printers and defined the era of “easy money” with the most extreme interest rates.

 

And the price is that we have counted nearly 20 trillion dollars in public debt. These debts represent 107% of our gross domestic product (GDP).

 

But the United States is not the only country that fights with debt.

 

Japan has had a debt problem for decades. Although its debt is only $ 11.4 trillion, it accounts for 239% of its GDP.

 

Greece, Italy, Portugal and Belgium also have public debt exceeding their GDP.

 

During the Great Recession we noted that many countries increased their debt levels, so they had a higher percentage of their GDP.

 

And although we have managed to remain in debt despite an economy that is slowly but steadily developing, we face a dangerous time. This is all thanks to the Federal Reserve.

 

Enter the Fed

 

The Federal Committee on the Free Market has recently taken a decision. It was almost nonexistent, as everyone had expected. Prices remained unchanged and ranged from 1% to 1.25%. It is still the highest level since September 2008.

 

But we know Fed Chairman Janet Yellen and the rest of his team will not just stop there.

 

More interest rate increases.

 

The unemployment rate is lowest with 4.4%, the economy swells and the stock market remains hot.

 

Of course, the low inflation figures for the Fed are still worried.

 

But I’m not so sure that it will remain the Fed’s hand to raise rates again when it hits in December.

 

And rising interest rates mean that interest payments on all these debts – both public and private – will increase.

 

Consumers and the government will spend less by huge debts and rising interest rates.

 

We have seen too often that the Fed takes interest rates too far, and it is always good after the damage has been done that it detects its mistake. It’s time to prepare for the Fed to go too far, too fast.

 

And the United States is no longer alone when it comes to raising interest rates.

 

The Bank of Canada surprised the market when it began its prime rate of 25 basis points at the beginning of this month at 1%.

 

The Bank of England has recently begun to raise some heavy indices that it expects to raise interest rates – the first increase in nearly a decade. The Bank of England’s guide is currently at 0.25%.

 

Many market commentators have spoken of the market approaching a tipping point. As we look at this big, striking bang that could reverse this card house, it could actually happen as a slow and painful slowdown.

 

But you do not have to look at your own wealth to relax with the rest of the market.

 

A better balance of the portfolio

 

The turmoil that risks entering the markets if the Fed continues to cut prices and cut costs will not destroy your portfolio either.

 

It is important that you take action to ensure that your prosperity is well diversified in the market.

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