Watching Your Money Disappear: There Is No Exit Strategy. There Is No End To Quantitative Easing. Central Banks Will Print As Much As Necessary To Save Their Ponzi-Scheme Of Credit And Debt. You Need To Take Immediate Steps To Protect Your Wealth…NOW!
December 19th, 2012
Watching Your Money Disappear
Can this go on forever? No, it certainly cannot. This will end, it will end badly and probably soon.
Why soon? – Because around the world we have pretty much reached the endgame: Policy rates everywhere are now at zero and central banks around the world are using their own balance sheets to prop up banks and select asset markets. Again, the Bank of England is among the most eager money-printers and can rightfully claim the title ‘Queen of QE’. The BoE has already monetized about a third of Britain’s public debt. But forget the little differences between central banks that keep the editors of the FT busy: Fact is, ALL central banks use their own balance sheets to keep the financial system from contracting.
The major centrals banks have now a combined balance sheet in excess of $13 trillion dollars, which is up from $3 trillion only 10 years ago. Global central banks’ assets now comprise a quarter of all global GDP – up from only 10 percent in 2002. It is self-evident that these assets would trade at very different prices if they had to be placed in the free market.
Without these massive interventions the market would do what it always does when a credit boom has gone too far – it would liquidate what it considers unsustainable.
What is the endgame?