Bank of International Settlements warning of a Bond Crisis on the way!
By: Julian D. W. Phillips, Gold/Silver Forecaster – Global Watch
Thursday, 27 June 2013
From 2007 the crises have grown – Central Banks can’t fix it alone!
Whether it is Bill Gross of Pimco, Marc Faber, ourselves or so very many competent analysts in the financial world, to a man, are warning of the destructive power of rising interest rates. Now in addition to all of us, we have the central banker of central bankers, the Bank of International Settlements, giving a serious warning to developed world governments that it is perhaps too late to rely on growth to rescue the global economy from deflation.
To their credit, central banks in the developed world have, in their supportive way, given muted recommendations of a similar nature, that governments and the entire political system should be instituting programs that stimulate economic activity from the ground up. But over the last six years after discussion after discussion, they have failed to give fundamental stimulative support to central banks to get developed world economies going. The democratic process itself, whether in the U.S. or in the Eurozone has conspired through partisan or national agendas to defeat a united move to stimulate growth even without intending to!
Governments have made considerable efforts to reinforce the banking system, on which they depend for the working of the system, but have largely ignored the needs and aspirations of their voting base. We now look at not only ‘hung’ governments, but a disjoint from the people they represent. Consequently, the most pressing problems facing their electorate, the economic ones, have been badly mishandled, neglected or just plain ignored.
After the ‘credit crunch’ of 2007/2008, involving ‘just’ the banking system, which nearly brought it down, U.S. efforts to ‘fix’ the problem simply let it continue with some capital buffers, but the underlying problem has not really been addressed [the levees have been raised but another ‘storm surge’ could still knock them down]. After that we have seen the Sovereign debt crisis of the Eurozone nearly spread a destructive solvency crisis among the weaker members of the E.U. Not only have the problems there not been fixed [yes, the levees have been raised there too], but the structural problems have been starkly highlighted through awful unemployment levels, [56% among the youth 26% overall in the weaker member nations] but not fixed.
Out of these structural problems not only do we find social unrest rising, but the people generally are expressing their disappointment in the democratic system as never before, feeling as they do the victims of government and banking failures.