Brace For Turmoil In Global Markets As Spanish Domino Falls
June 26, 2012
On the heels of Moody’s downgrading 28 Spanish banks, today 40 year veteran, Robert Fitzwilson, wrote the following piece exclusively for King World News. Fitzwilson is founder of The Portola Group, one of the premier boutique firms in the United States. Here are Fitzwilson’s observations of the current crisis we face: “The monetary system is trapped. Despite various forms of quantitative easing and the forcible reduction of interest rates, the level of economic activity has begun to reverse course. The recent releases of economic indicators, in most areas of the world, have been revealing a global economy that is beginning to tank. It is clear that the levers exercised by the central banks since late-2008 are not as effective as they once were.”
Robert Fitzwilson continues:
“The extended Zero Interest Rate Policy (ZIRP) is wreaking havoc with retirees, savers, retirement funds, and the net interest margin of the banking institutions. Large corporations have a tremendous amount of cash, but small businesses struggle to find working capital and bank loans. Small businesses and entrepreneurs are the job creators.
Another problem is that volatility is high for risk assets. The velocity of money stagnates. The system is imploding and unless something is done soon, and on global scale, we will lapse into a downward economic spiral….