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In the past two weeks the tone of the stock market has changed considerably. Quickly gone are the days where the stock market is only expected to go up, as many have become concerned after several days of sizable declines.

Whether this is the beginning of a bigger crash that so many in the Austrian community have forecast for years, or just another alarm to which Wall Street hits the snooze button remains to be seen. Yet it certainly is interesting to see just how quickly sentiment has changed.

The theme presented by the mainstream media is that market participants are becoming concerned about rising interest rates. Which they well should. Yet it seems as if most are almost stunned by the development. As if maybe they never really expected the Fed to raise rates.

But you are seeing in action what the Austrian School of Economics lays out so clearly and eloquently. Simply that of course when you’re creating tons of new cash and credit, market values will look better. Reflected by how the stock markets have tripled since the Fed began quantitative easing in 2009.

Of course the other half of that is that when the printed money is retracted, you get the exact opposite effect. As was seen in the stock market these past two weeks.

With that said, what’s relevant now it Is thinking about what happens next.

At this point, the Fed has been saying that not only is it going to raise interest rates, but is also going to sell off $4 trillion of assets from its balance sheet, all while China speculates about walking away from the treasury market and introducing the PetroYuan.

If that all did actually occur, the stock market would get destroyed.

We haven’t even hit 3% in the benchmark 10-year treasury and the market is already panicking. What would happen at 4 or 5%, let alone any level remotely near what would be required to undo the unprecedented amounts of monetary easing?

If Paul Volcker had to raise short-term interest rates to 20% back in 1980 to normalize the market then, what rate would it take to deflate the bubbles that are exponentially larger this time around?

Far more likely is that we never see interest rates anywhere near those levels. Primarily because it’s hard to imagine a scenario where the stock market is plummeting and the Fed doesn’t respond with a shock and awe QE campaign.

Even Ben Bernanke himself said in his incredible 2010 Washington Post op-ed that the whole purpose of that using programs was to goose the stock market.

“This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to anticipate the most recent action. Easier financial conditions will promote economic growth.

For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.”

Have you seen any indication since then that either the Fed or U.S. Treasury have any plan to change course? I suppose anything is possible. But to the degree that one can approach trading as a science of probabilities, seeing the Fed not respond with more easing sure seems like a long-shot.

Again, whether we have reached the seminole Minsky moment or are just witnessing another warning signal remains to be seen. But seeing the stock market’s response to the rising yield is worth taking note of.

Because the underlying fundamentals that have led so many to the precious metals sector are more intact than ever, and it appears as if we are getting closer to a resolution in that market.