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The Fed is Trapped.

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As we have been saying for some time, the Federal Reserve is trapped. With the Federal Reserve's monetary policies and the U.S. Government's fiscal policies, they have created so much new debt that higher interest rates will crash the global economy and global financial markets.

Quite simply, there is too much debt in the world (you may have heard us say this over the past half-decade or more-modest sarcasm), and the world cannot handle higher interest rates because of this quantum debt load at all levels, individuals, corporations, and governments.

So what is the Fed (and other central banks) going to do? Unfortunately, they have only two choices, both end with the same result, massively declining asset prices.

Path A: Crash the stock market by hiking interest rates and stop printing money; this will significantly decline asset prices.

Path B: Inflate, keep printing money, let inflation run hot as even the Fed has admitted they will do. Inflation will lead to higher interest rates, a problem with a heavily indebted society.