This Can Cause The Entire Financial System To Collapse

Tuesday, November 5, 2013
By Paul Martin
November 5, 2013

Today KWN is pleased to share an incredibly powerful piece from 50-year veteran Art Cashin, who is Director of Floor Operations at UBS ($650 billion under management). Cashin covers one of the greatest dangers facing the financial system today.

By Art Cashin Director of Floor Operations at UBS
November 5 (King World News) – “Do We need A Dodd-Frank Rule For Central Banks? – I was paging through my friend, John Hussman’s latest report and came across this rather astounding paragraph:

A brief update on the bloated condition of the Federal Reserve’s balance sheet. At present, the Fed holds $3.84 trillion in assets, with capital of just $54.86 billion, putting the Fed at 70-to-1 leverage against its stated capital. Given the relatively long maturity of Fed asset holdings, even a 20 basis point increase in interest rates effectively wipes out the Fed’s capital. With the present 10-year Treasury yield already above the weighted average yield at which the Fed established its holdings, this is not a negligible consideration.

The Rest…HERE

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