Rickards: The FED May Cause the Next Recession by Trying to Get Ready for the Next One
In a recent interview conducted at the Nasdaq stock exchange headquarters in New York, macro analyst and financial commentator James Rickards warned of a potential upcoming financial panic in the run-up to the release of his latest and final book in a series of four called “Aftermath“.
The bestselling author thinks that the US Federal Reserve (FED) raising the interest rate from zero all the way to the current 2.25% to 2.5% over the last couple of years may be a ploy from the central bank to give it the opportunity to then cut rates in the event of another potential economic downturn.
Rickards has had a long history on the frontlines of financial panics. He had a role as the chief legal counsel for the now-defunct hedge fund Long-Term Capital Management. The firm was infamous for the bailout it received organised by the Federal Reserve Bank of New York to the tune of $3.625 billion following heavy losses for the firm following the 1997 and 1998 Asian and Russian financial panics.
Since then, Rickards has spent time on the sidelines and bore witness to the 2008 financial crisis and subsequent bailout – this time directly from the US Treasury.
Moving forward another 10 years, he thinks we may soon be on the precipice of another major economic downturn, but this time the mess will be too big for even state-backed central banks like the FED to get us out of trouble.
