Monday, June 1, 2009
End of the financial system may be imminent
The end of the current financial system, as we know it, maybe imminent. If you would have asked me even two weeks ago if collapse was imminent, I would have said it was highly unlikely, now I am saying it is possible. Bernanke may be able to patch things up short-term, if he is lucky, but long term the U.S. financial structure is in serious trouble. There is just too much Treasury debt that needs to be raised. An international panic out of Treasury securities, even a slow controlled panic, means the Fed will be the major buyer. This will ultimately mean record inflation.
And keep this in mind, we have never seen a collapse of a currency like the dollar. Even the Wiemar inflation can not serve as an example. Since the dollar is the reserve currency of most of the world, a panic out of the dollar means more dollars will return to the U.S, shores than any country has ever experienced.
Other countries have had collapsed currencies, but never in the history of world of finance has so much currency been held outside a country of issue that could come flying back, almost on a moments notice. If the panic out of the dollar starts, even if Bernanke stops printing money (unlikely), all the dollars flying back into the U.S. could cause a huge price inflation all on its own.
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Bob CHapman seems to be of the mind that something bad and big is coming down the pike in the next month or two. Might be because of the steepening yeild curves of T-bills and the Fed's reaction to it. 'We don't know what is happening'. Pfft. What is happening is that nobody wants to buy US debt anymore and the Fed still needs to purchase 1.6 trillion in Treasury bills to support the bailouts.
ReplyDeleteYep, it's a mess.
Why the old RP video? Doesn't it say RP 2008 in the background?
ReplyDeleteWhat do we know? The fed is broke and the world is broke too! The warning signs are on every street corner now, no jobs, too much debt and the fed is keeping the money supply in the banking circle, none for the local banks to loan to us when we need it. What a tired old game of keep the elite's fat and throw bones to the population to knaw on. We also know that their game is soon to expire when the dollar panic reaches critical mass back on our home shores even before August 2009 is over. Hello Bank Holiday and a lot of mad suckers who trust the system. Stay alert each day and watch for signs of hoards of dollars returning to our shores and watch for countries going bankrupt too! An official bankrupt country that doesn't get bailed out will trigger the final meltdown. Get ready for massive change to a humble life style.
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