Rate Cuts

Posted By Darren Winters on Jun 6, 2024

Rate Cuts

Rate cuts are coming, and in light of the world war, which is not televised, those rate cuts are likely to be aggressive.

Central bank liquidity cycle troughed in 2024, at the beginning of a super war cycle is probably no coincidence.

NATO’s plan to create land corridors intended to accelerate the movement of US troops, half a million troops, and equipment across Europe into the East front will likely escalate Europe’s bloodiest war since WW2, into Russia’s border. The goal is to break Russia into small, weak states, which can no longer threaten the hegemonic US-centric world order.  

The dominant power dominates the old continent, Europe. 

WW2, the defeat of Germany, and the end of the last super war cycle was a period of relative peace in Europe. 

But the three victorious powers post WW2, Russia, the UK, and the USA, would meet again on a battlefield in the 21st century.

It takes about 80 years for populations to forget the horrors of war. 

The 80-year super war cycle, world war and rate cuts  

Ukraine, with its civilian and public infrastructure destroyed, 12 million refugees (latest figure) and half a million graves of soldiers, is no longer a country but a warzone between the two great superpowers

Russia, and the US and its proxy army NATO.   

Wartime military manoeuvres are a drain and costly on human resources and materials. 

Mobilizing more than half a million US and its allies troops towards the East Front requires the type of finance and treasure only central banks can accommodate. 

Central bankers in cahoot rate cuts

Was last month’s central bank meeting, May 2024, in Amsterdam about monetary easing policy during wartime?

The European Central Bank, in a widely telegraphed move, is seen trimming its key rate from 4% to 3.75%, its first rate cut in nine years.

Such a move follows the Bank of Canada’s rate cut on Wednesday to 4.75% from 5%. Central banks in Sweden and Switzerland also have trimmed rates this year.

Discount the Fed’s double speak about holding rates for longer or even rate hikes by the wide-eyed.

The Fed will most likely cut in cahoots with other central banks and maybe even more aggressively than the market thinks to trigger the Great 2024 treasury bond rally. 

Making treasury bonds great again as the war enters a capital-intensive stage would be no coincidence. 

During WWII, the US issued war bonds that were called Defense Bonds. Defence bonds were later relabelled war bonds after the attack on Pearl Harbour.

War bonds sold in the US helped the government raise about $185 billion, and 84 million Americans bought those bonds.  

Aggressive rate cuts could be coming as the war escalates, and it is no coincidence.

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