Skip to comments.CODE RED: Central Banks Will Frantically Pound The Panic Button - Executioners, World's Currencies
Posted on 04/27/2014 7:26:04 AM PDT by blam
CODE RED: Central Banks Will Frantically Pound The Panic Button And Eventually Become Executioners To The World's Currencies
John Mauldin, Thoughts From The Frontline
Apr. 27, 2014, 9:21 AM
(It is especially important to read the opening quotes this week. They set up the theme in the proper context.)
There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.
Ludwig von Mises
No very deep knowledge of economics is usually needed for grasping the immediate effects of a measure; but the task of economics is to foretell the remoter effects, and so to allow us to avoid such acts as attempt to remedy a present ill by sowing the seeds of a much greater ill for the future.
Ludwig von Mises
[Central banks are at] serious risk of exhausting the policy room for maneuver over time.
Jaime Caruana, General Manager of the Bank for International Settlements
The gap between the models in the world of monetary policymaking is now wider than at any time since the 1930s.
Benjamin Friedman, William Joseph Maier Professor of Political Economy, Harvard
To listen to most of the heads of the worlds central banks, things are going along swimmingly. The dogmatic majority exude a great deal of confidence in their ability to manage their economies through whatever crisis may present itself. (Raghuram Rajan, the sober-minded head of the Reserve Bank of India, is a notable exception.)
(Excerpt) Read more at businessinsider.com ...
The big banks (from the IMF on down) papered over the debt crisis starting way back in 2005 - the S finally hit the fan in 2008, and they’re STILL papering over it.
In other words the big boys aren’t just in the frying pan, they are playing with the bonfire...
Maybe this explains all the recent ‘suicides’ in the banking industry?
See list at this thread:
This isn’t going to end well.. I’m just not sure if I should start selling my belongings or just sit back and make popcorn and watch..
When (not if) it all comes tumbling down, they'll retreat to their private islands, expansive tracts of land in strange places, and gated communities and wait it out....for generations, if necessary.
But where is/will be your cash stored?
If there were any certainty (or near certainty) in the referenced (not peer reviewed) analysis, then the market would have already reacted. Markets anticipate, and market participants are loathe to lose money.
Eventually the music stops and demand goes to zero. Default occurs in all sectors.
Only those with stores of cash and no debt survive,
Which explains why corporations are hoarding cash and the velocity of money is jack.
Selling your belongings is exactly the wrong thing to do, essentially currency is going to be meaningless.
That is what I have thought for awhile now, watch the bankers, not the bank.
“When (not if) it all comes tumbling down, they’ll retreat to their private islands, expansive tracts of land in strange places, and gated communities and wait it out....for generations, if necessary. “
The Bush ranch in Paraguay comes to mind.
Shed your debt, locate in a jurisdiction that is not urban, not predatory and is administered fairly. Convert some of your liquid assets into nonperishable food and barter goods, but just some, not all, not even a majority. Going all in will make a fool of you, should these fears not materialize. Then, get on with your life. If it happens it happens, there’s really little control over the matter to be had from an individual perspective.
I remember Ted Turner's answer when he was asked what he's going to do with the 10,000 acre 'compound' he has in Patagonia. He said, "that's where I'll go when the revolution starts."
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What do you think all the bullets are for? It's to keep order when the shit storm hits. Storm clouds have been on the horizon for some time. We are feeling sprinkles now and can see down pouring clouds in the not too far distance.
“the fundamental problem we are still facing is excessive debt. Not excessive public debt, mind you, but excessive debt in the private and public sectors. To resolve that, you need restructurings and write-offs. Thats government policy, not central bank policy. Central banks cant rescue insolvent institutions. All around the western world, and I include Japan, governments have resolutely failed to see that they bear the responsibility to deal with the underlying problems.”
So what happens to the college debt? Will all those college kids be forced into labor camps?
Nah...there will be such an out-cry that the debts will be 'forgiven' for votes.
They'll be paid by you from the national treasury. Get ready!
No system is perfect. Democracy and capitalism is no different. Here is the scoop. All economies go in cycles. Boom and bust. Politicians do not want to be blamed in busts and dominant businesses do not want to take the losses and lose their place in the financial chain. Both got together with a simple scheme, politicians vote to borrow and spend, and use the money to bailout the corporations. If recovery does not occur quickly have the central banks manipulate the money supply, interest rates and if necessary have the financial institutions maniplate and rig the market till recovery cycle manifests. Problem is gov and big business rigging and manipulating the markets has grossly distorted the prices of assets. No one dares to buy or invest, and gov/central bank/bailed out corporations are in a world of hurt.