\u201cWithout deviation from the norm, progress is not possible\u201d<\/p>\n
\u2014 Frank Zappa<\/p>\n
\u00a0<\/p>\n
(What you are reading is a cut\/paste of a post I wrote for a different publication.\u00a0 Some of you know most of my thoughts on this already, but if\u00a0 you would like to read it anyway, please enjoy.\u00a0 I wrote it in a more grown-up style than you\u2019re used to seeing on here, so don\u2019t get freaked out.)<\/em><\/p>\n \u00a0<\/p>\n As a contrarian, I tend to gravitate to other contrarians over time, especially on social media because it\u2019s much harder to find these people in real life. I will say however, a lot of them have become contrarians only recently, and when you change your views for the first time, you tend to overcorrect and go too far over to one side. This kills objectivity, and in my opinion, times like this expose these people for the neophytes they currently are.<\/p>\n For example, the Trump administration has more or less told us out loud they are going to bring us into a correction at best, and a recession at worst. And I applaud them for it.<\/p>\n Anyone who is upset about this has zero understanding of how markets work. They are either in the cadre of people who blindly oppose anything this current administration does, which is never an educated approach, or like a lot of people they have simply been conditioned to only be able to function if number does nothing but go up, and are concerned it won\u2019t be doing this for a while.<\/p>\n Both groups are filled with people who should never be allowed to run or manage a taco stand, much less anything of broader importance. In case you have forgotten, over time, recessions are healthy. If you take a long term approach, and you always should, recessions are vital. They rid the market or malinvestment and excess, and allow us to reset what needs to be reset, and move forward without a slew of dead weight dragging us down at every turn. Think of it as purging pre-cancer cells in the body due to occasional bad health decisions, environmental damage, stress, etc. If you ignore it because it\u2019s scary, inconvenient or hurts a little bit, then you are only making everything worse over time. And this is what we have done.<\/p>\n And why have we done this? Votes. We in the US and most of the Western world nowadays only focus on short-term problems, because we somehow think it is in our best interest to do so. We focus on \u201ccommunist China\u2019s\u201d inherent flaws without giving them extreme credit for bucking this harmful trend and focusing on what really matters decades into the future. With China\u2019s demographic collapse and cult-of-personality quasi-communist government, the fact they\u2019re still here and prospering says a lot. And these types of long-term decisions have played a major part. It is in their culture. It is not in ours. And if you so\u00a0dare<\/strong>\u00a0have us go backwards even a little bit, so we can eventually move forwards \u2014 here come the pitchforks. \u201cYou can\u2019t take us into a recession, I have CHILDREN for chrissakes!!\u201d This is where democracies can really work against you at times.<\/p>\n And this is where the Trump administration comes in. They are (legally, mostly) coming in and saying \u201cwe are not taking this to a vote, we are doing what is necessary\u201d. A bit scary if you think about it, but I will agree it\u2019s necessary. And in the best interest of themselves, they need to get this recessions started now so we can be in the recovery phase by midterm elections in November of 2026. It\u2019s pretty obvious.<\/p>\n If it\u2019s still not obvious to you, let me go further than just stating my own opinions over and over. Fed Chairman Powell has stated publicly he is not aligned with the Trump administration. Powell has the power to raise and lower interest rates. There is little reason to drop interest rates if the market appears healthy and its numbers are not falling. Powell has dropped rates, only once, and he did it in a rising market. This was done right before the 2024 election, there was no real reason for it, and this is why I have always suspected him of working for the swamp behind the scenes. But apart from this, you would only drop rates\u00a0to get ahead of<\/strong>\u00a0impending doom in the markets so the recovery can begin sooner as opposed to later.<\/p>\n Don\u2019t believe me? If you don\u2019t, history would not be on your side I\u2019m afraid. In the chart below, you have a history of where interest rates have been in the US. Ever since 1980, which was a wild time in our financial history where very little made sense, things got really really predictable.<\/p>\n If you had a rise in rates, followed by a flattening, followed by a cutting cycle \u2014 a recession was soon to follow. On the chart, recessionary periods are shaded in gray. Have a look.<\/p>\n
![\"\"](\"https:\/\/nononsenseforex.com\/wp-content\/uploads\/2025\/03\/fedrate1.png\")
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