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Jim Rickards: Normally the Fed would not be raising rates. Right now they're on pause. They said so. They're going to, they use the, the keyword patient, you know, so they're going to be patient and that means no rate hikes as far as the eye can see. If the Fed decides they want to hike rates, they'll remove the word patient from their statements. So at least the quarterly statements that come out after the FOMC meetings. So as long as you see, well when we get to the June meeting, if they used the word patient, you can be certain they will not raise rates in September and so forth. And if in September they use the word patient, you'll know they're not going to raise rates in December. So you can look three months ahead with ease and perhaps longer. Well, but that doesn't mean that they've given up and that's the point.

Jim Rickards: Normally , the Fed never leaves the economy. This notion that the Fed does things and the economy falls is not true. The Fed follows the economy. So they'll start out with the coming out of recession were very low rates and then you know, unemployment will go down, inflation will tick up, capacity utilization will tick up, et Cetera, and then the Fed watches and watches and watches. Eventually the economy gets a little too hot. Inflation gets some traction, and then they say, well, Gee, we better raise rates, and they do, but of course they're, they're reacting, they're behind the curve, not ahead of the curve. Then they raise raise and then they raised them too much. The economy goes back into recession, so that's a normal business cycle with the Fed tagging along. That's not what's happening this time. What's happening is the Fed is racing to get rates up to three and a half, 4%, wherever they can before the next recession.

Jim Rickards: Even though the economy's weak. Normally you would never raise rates in an economy that's as weak as we are right now, but they're doing it anyway because they're trying to build up some capacity to cut rates in the next recession. The conundrum all along is how do you raise rates into weakness without causing the recession you're preparing to prevent? I never thought they could do it, and as of last December, It looks like they've thrown in the towel. They said, we can't raise rates anymore. We will cause a recession, but the job's not done. And so they're going to sit there and watch it. If economy shows little sign of strength, they're going to raise them again. They'll warn us by removing the word patient, but they're not done. They're, they're not where they need to be to fight the next recession.

Jim Rickards: What are their options then, Jim, in your opinion?

Jim Rickards: Their options are all bad, and this is because of Bernanke. The time to raise rates.. So I did an interview in August of 2009 now imagine that August, 2009 almost 10 years ago, and the interviewer or the anchor said there was a FOMC meeting coming up and said, Jim, what should the Fed too? I said, they should raise rates just a little, you know, just 25 basis points. No big deal. It's just a signal that they're trying to get back to normal. Well, they raise rates in 2015 December, 2015. that was the liftoff. So that was six years after. I said they should've started raising ways, but it, you know, yeah, the economy was coming off the bottom in 2009, 2010, 2011 but it was growing and that's the time to raise rates, to kind of get back to know, if they'd started in 2000 even 2010, 2011, if they had started them, they would have been able to normalize before now.

Jim Rickards: But by waiting until 2015 because of Bernanke and Yellen, they were way behind the curve. I have a certain sympathy for Jay Powell. He knows what his job is, is job is to get it raised at three and a half percent. He just can't do it. So, so if they, if they stand still with this pause that they're going through right now, so called patient policy, they better hope the economy keeps growing. If it does, they will try to raise them again. They're not done. And that that's the important message for the, for the viewers, Danielle, the Fed's not done. They're not where they want to be and they won't be done until they get to three and a half, 4% but as I said, right now, their hands are tied because if they raise them anymore, they will cause a recession.

The Federal Reserve is caught in a difficult situation of having to raise rates without causing another recession, said best-selling author Jim Rickards.

 Unlike previous monetary cycles, the Fed is trying to raise rates in anticipation of a possible recession, even while the economy is not showing signs of overheating.

"The Fed is racing to get rates up to three and a half, four percent, wherever they can, before the next recession, even though the economy is weak. Normally, you would never raise rates in an economy that's as weak as we are right now but they're doing it anyway, because they're building up some capacity to cut rates in the next recession," Rickards told Kitco News.

Contrary to popular belief, the Fed's actions are reactionary to the economy, not prescriptive, and so is behind the curve on macroeconomic trends.

"The Fed never leads the economy. This notion that the Fed does things and the economy follows is not true. The Fed follows the economy, so they'll start out with coming out of a recession with very low rates and then unemployment will go down and inflation will tick up, capacity utilization will tick up, etc. and then the Fed watches and watches," he said.

Rickards said the last administration is to blame, as the Fed should have raised rates a little bit back in 2009, and not wait until 2015.

He added that the current Fed remains "patient" but may remove that word and change their dovish stance should the economy show more signs of growth.

Check out what they're saying about the Federal Reserve over on Real Money. Not a member? Sign up here.

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This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.