Image Source: UnsplashStocks soaring on slowing fundamentals is an overreaction that can be explained in several ways. This recent market reaction reflects a huge overreaction on the part of investors and computers hunting out shorts. This is seen in both stocks and the currency market. Big market moves like we recently saw do not always make a trend or confirm a turning point, but they do take a lot of pressure off markets being overbought or oversold.At this point, it is difficult to think the Fed wants to see these markets move further and undo the work it has achieved during the last eighteen months. Inflation has slowed, but it is not dead, and the seeds for a new wave have already been sowed. A peek at the National Debt Clock shows that after hitting 32.5 trillion dollars just recently, we are already about to hit 33.7 which signifies we are moving far too fast in the wrong direction.The fact is, little changed last week and the game and effects of higher rates will not end until they do. It could be argued that Powell has gotten a large part of the job done if he can simply hold the course. This means staying high for longer. This has the power to an end the era of zero and negative interest rates. The implications of ending this forty-plus-year trend are enormous. True price discovery has been lost during the debt explosion. What we are seeing is not about interest rates rising to slow a magnificent economy. What we are seeing is higher interest rates being used as a tool to get debt under control. When the debt collapses and defaults soar bad things happen. Bad news is not good news.Too much debt and even worse, the expansion of it, is a problem. For as far as the eye can see, unsustainable government deficits scream devaluations of fiat currencies. This only raises the issue of which currency falls fastest and hardest. An increase in the risk of defaults is in place, this includes not only individuals going bankrupt, but companies and even nations. Yes, the markets may be celebrating a bit early. When all is said and done, little has changed. The dangerous game of accumulating wealth has more to do with avoiding huge losses while salting away gains than with markets violently swinging sideways. Wealth accumulation is a marathon and not a fifty-yard dash.More By This Author:Lulled Into Complacency Again? Yes, It HappensChina Could Derail Japan’s Fragile RecoveryJapan’s Yen, Where It Goes From Here