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No Interest Rate Hike in 2015???By
Thursday, November 13, 2014
Everyone expects higher interest rates in 2015... Everyone, that is, except Jim Rickards.
Jim Rickards is an original thinker...
I've already shared with you in DailyWealth Jim's brilliant but out-of-the-mainstream view that DEFLATION – not inflation – is the financial storm that nobody is expecting. (I urge you to go back and read the DailyWealth I wrote about that, right here.)
Jim opened my eyes to that idea... and so far he has been right. Inflation, it turns out, is apparently much more difficult to ignite than governments around the world have expected. The threat of deflation looms.
Earlier this week, Jim offered up yet another well-researched but out-of-the-mainstream view...
Jim says it's very likely the Federal Reserve will NOT raise interest rates next year.
Jim spoke after me at our investment conference in the Dominican Republic earlier this week. He is a compelling speaker. (Go see him if you get the chance.)
Jim explained why he doesn't expect the Fed will raise interest rates in 2015. It all comes down to who makes the decisions to raise interest rates...
"Almost everything changes on January 1," Rickards explained...
"The President has vacancies to fill among Fed Governors, and he will most certainly put doves in. Also, two "super-hawks" – Fisher and Plosser – will no longer have a vote." (Doves are less likely to raise interest rates. Hawks are more likely to raise interest rates.)
Rickards says Janet Yellen – the head of the Federal Reserve – is dovish and won't be in any hurry to raise interest rates. So the list of voting members, according to Jim, is loaded with doves. This group, he says, won't raise interest rates.
I didn't believe Jim when I first heard him say that he thought the Fed wouldn't raise interest rates in 2015. But I like his explanation.
A year ago, Jim was the only man out there making a strong case that deflation was a REAL threat. It was a bold call. But so far, he has been right.
Now, Jim is making a bold call that the Fed might not raise interest rates in 2015.
It's another bold call... But he may just turn out to be right about this as well.
Everyone else says the Fed will raise interest rates in 2015. Jim Rickards isn't so sure of that...
You can agree or disagree with Jim Rickards' opinions – but don't dismiss them. Instead, soak them in. Learn both sides of the argument.
I love it when people are willing to stick their necks out with conviction. Jim Rickards is one of those people.
He could be right... or wrong... about a lot of things. Either way, he is thought-provoking... and therefore worth listening to. Deflation is a real threat, and the Fed might not raise interest rates in 2015 after all. I like this guy's thinking...
You should learn more about him. To learn more about Jim and his thought-provoking perspectives, I highly recommend you read his book, The Death of Money.
Good investing,
Steve
Further Reading:
Read more from Steve on America's battle between inflation and deflation here:
The World's Most Important Financial Battle Is Coming to a Head
The world is witnessing a climactic battle between deflation and inflation... The Coming Death of the Dollar
"The Federal Reserve believes that it is managing a reversible process... [but] it is mistaken." What to Own as the Dollar Dies
If you're worried about a collapse of the U.S. dollar, you may want to start incorporating some of this advice into your portfolio today... Market NotesA HUGE UPTREND IN MEDICAL SERVICE STOCKS "Picks and shovels" investing works... especially in the booming health care sector.
Over the years, we've helped thousands of readers learn why investing in "picks and shovels" is a great way to invest in sector booms. These businesses supply the vital tools, products, or services to many participants in a sector (to read our educational interview on "picks and shovels," go here).
As you likely know, the health care sector is booming. With millions of Baby Boomers reaching retirement age in the U.S. each year, health care demand is steadily growing. This trend has produced a solid uptrend in medical service stocks.
You can track (and invest in) the medical service industry with the SPDR S&P Health Care Services Fund (XHS). This fund owns a basket of companies that provide essential products and services ("picks and shovels") to America's hospitals, doctors' offices, and pharmacies.
As you can see, shares of XHS have doubled since late 2011... and they just set a new all-time high last week. It's boom time for the picks and shovels of the medical industry.
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