INESTOR ALERT: The Underlying Cause of The Banking Crisis Has Returned, Grave Adverse Effects Of The Ultra Loose Monetary Policy Everywhere In The World

Monday, April 14, 2014
By Paul Martin

Investmentwatchblog.com
April 14th, 2014

et again, it seems, once senior political or economic figures leave their ‘public service’ the story changes from one of “you have to lie, when it’s serious” to a more truthful reflection on reality.As Finanz und Wirtschaft reports in this great interview, Bill White – former chief economist of the Bank for International Settlements (who admittedly has been quite vocal in the past) – warns of grave adverse effects of the ultra loose monetary policy everywhere in the world… “It all feels like 2007, with equity markets overvalued and spreads in the bond markets extremely thin… central banks are making it up as they go along.” Some very uncomfortable truths in this crucial fact-based interview.

http://www.zerohedge.com/news/2014-04-11/bis-ex-chief-economist-i-see-speculative-bubbles-2007

The Underlying Cause of The Banking Crisis Has Returned

The world economy has not yet recovered from the last such implosion, and already we are on to another phase of unsustainable credit growth

As its name implies, the International Monetary Fund’s latest Global Financial Stability Report attempts to track developing risks within the financial system.

So the following statistic, contained in the report, should be of concern: high yield issuance among US corporates – junk debt in other words – over the past three years is more than double the amount recorded in the three years prior to the crisis.

What’s more, the trend is accelerating; gross issuance of high yield corporate bonds stood at a record $378bn (£225bn) last year. There were also $455bn of institutional leveraged loans issued in 2013, far exceeding the previous high in 2007, just ahead of the crisis.

The Rest…HERE

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