Nomi Prins: "The Fed Is Scared To Death Of Crashing The Global Financial System
Content adapted from this Zerohedge.com article : Source
by Tyler Durden
Via Greg Hunter's USA Watchdog blog,
Two time, best-selling author Nomi Prins says central bankers have no idea how to stop the easy money policies that they started after the financial meltdown of 2008.
Prins explains,_ "So,when the Fed says they are going to remove assets from their $4.5 trillion book by not reinvesting the interest payment...the reality is they haven't really done that. They have reduced their book by about $10 billion off of $4.5 trillion since they mentioned they were going to start 'tapering." _ 
The media discusses this as a major tightening move. Somehow all of our economies have finally worked because of central bank activity. Growth is real. It's all positive. The markets are evidence of that because of the levels they are at; and, therefore, these central banks, starting with the Fed, are going to reverse course of these last 10 years.
"The reality is if you look at the actual activity of the central banks, beyond the Fed raising rates by a little bit, there hasn't been and there isn't being a reversal of course because they are scared to death that too much of a reversal is going to cause a major crash throughout the financial system.
Everything is connected. All the banks are connected. Money flows around the world in less than nanoseconds, and all of it has the propensity to collapse if that carpet the central banks have created is dragged from beneath the floor of all this activity."
Prins, who just finished traveling the globe to research her upcoming book, thinks there is one big thing that can take the entire system down. Prins, a former top Wall Street banker, contends:
"There hasn't been any real growth in the real economy. That is an indication of the misfire of this entire plan. There has been tremendous growth in stock markets and bond markets.
If you look at localities or states or governments whose debt to GDP levels are well over 100%, in Japan it's over 200%, in the United States it over 100%, and this is the same throughout the world. ** These are levels that they have never been, and they are all at their historic highs.**
That's why debt will ultimately be the destructor of the system. In order for that to happen, the cheapness of money that allow states, municipalities and corporations to continue to borrow at these cheap levels has to go away...
At some point, there will be a mistake. There might be a tiny smidge of an interest rate hike at some central bank, probably the Fed, which ripples throughout the system as a mistake, not because real growth has happened,and that's why interest rates have been raised. That will incur defaults throughout the system. People will incur personal defaults, and that will cause problems in the mortgage market... then it becomes a knock-on credit crisis, and then banks start not to lend... Then we have the makings of a broad crisis."
Prins doesn't think we get a crash in 2018, but warns when the markets crash, "they will come down fast."
So, how is Prins protecting herself?
Prins says,
"I'm buying gold... I would also be a buyer of silver because silver is a used hard asset, and it's at really cheap levels right now. I would be a buyer as a percentage of my portfolio. I have done exactly what I am telling you is a good idea to do, which is to take money from the stock market and put it into hard assets."
Join Greg Hunter as he goes One-on-One with Nomi Prins, author of the upcoming book titled "Collusion: How Central Bankers Rigged the World."
After the Interview:
You can find free information and analysis from Nomi Prins at NomiPrins.com. Prins is giving USAWatchdog.com viewers a special link to buy her new book at a hefty discount.
Prins says this pre-order link will give USAWatchdog.com buyers of "Collusion: How Central Bankers Rigged the World"a 40% discount up until it officially releases on May 1, 2018.
The Fed's bilateral balance, with Treasury and mortgage-backed bonds of $ 700 billion in 2008, reached a huge $ 4.5 trillion in about 10 years. For the time being, he was trying to keep the size of the bald eagle in balance by reloading the papers filled by the penny that the Fed had held. However, after 10 years of financial crisis, the Fed is laying out a very detailed road map to narrow down the blind.
The Fed's downsizing strategy is to refinance the two types of bonds, treasury bills and mortgage-backed treasury papers. The collapse in treasury bills starts at three-month intervals starting at $ 6 billion; With $ 6 billion worth of slices to the top of $ 30 billion. Then the reduction will be done at maximum level.
The same thing will start with $ 4 billion on mortgage-based accounts. It will be upgraded every 3 months with slices consisting of 4 billion. As a result, it will be up to 20 billion dollars. It is not yet clear when it will be started and where it will be finished. However, the vast majority of American economists point to December.
Greg Robb, one of MarketWatch's editors, said the Fed will start to shrink bilge sums to $ 10 billion per month in the first place; then he figured out that he was planning to spend a little over 50 billion dollars to slowly collapse. As a result of the implementation of this plan, there will be a contraction of 300 billion dollars in the first 12 months and 600 billion dollars in the following year.
It is said that the contraction of the balance sheet will start as early as July. I hope they really do it. If this reduction is made, the desired result will be obtained.
I hope you will see the comment. I could not post the comment early due to the bandwidth problem. @zer0hedge
How about Cryptocurrency causing a disruption? Right now it is insignificant, but the growth rate shows that it can considerably affect the dollar in the future. Already countries with economic collapse are adopting cryptocurrency. Eventually weak fiat currencies will be replaced with cryptocurrency and those weak fiat currencies will go down like dominos. In the interim, there will be a need to have physical cash. So strong currencies like US dollar, Euro, etc. will have a temporary boost in value. Eventually that will get wiped out by cryptocurrency becoming dominant in scale. Eventually the FED will be forced to clamp down the flood of money and raise interest rates.
In the first quarter of the twenty-first century, the global capitalist system no longer holds its contradictions and
have difficulties in overcoming their problems. Global stagnation is very high
the rates of indebtedness, the big one that can terminate the existence of mankind on earth
The 'global ecological crisis', the structural financial instability tendency, the excess of income disparities
the rise of democracy into oligarchy, the creation of imperialist wars
major problems such as mass migration waves threaten the future of global capitalism.
According to Italian political theorist Antonio Gramsci, "the crisis is the death of the ancestor,
and in this interim, a wide variety of morbid signs may emerge "
In addition, slow economic growth in the real economy Since the 2008 crisis, the growth incomes of emerging economies, except China, have never been so weak. As for China, Even when we are living outside India and the Philippines, the growth estimates for developing countries in 2015 are around 3.5%.
Yeah I agree bro that the global capitalist system no longer holds its contradiction.
Thank you bro for your comment
The Fed most certainly will crash the economy. That is what they do. It might not happen today or tomorrow but there will come a point where they step right on the throat of it.
People seem impressed how the central banks can "manage" the economy. I disagree...I think what they do is a disaster...they dont manage anything...they allow bubbles to be created (like now) and then allow them to pop. That is what the fed does.
That is why we had over 100 years of boom/bust cycles. It has taken 10 years to get this boom...and there might be more...but the bust is coming.
This is why I think everyone should be in crypto, at least a little bit. It's like hedging your bets(using fiat) against the inevitable bursting and recreating of the bubbles we all know are happening...
Before crypto, the doomsday hedgers said the same thing about holding gold and silver in case of a monetary collapse.
@zer0hedge..the reason why the fed hasnt reduced their balance sheet isnt because they havent tried but because they cant find any buyers for the shithole linked CDOs that the banking cunts dumped on them.Pedantry alert, but a nanosecond is how long it takes for electrical signals to travel something like the length of a human hand. The financial flows don't shift planet wide by the nanosecond. They can barely even shift that fast inside one computer cabinet.can no longer hide which tribe is she coming from and yet still makes a killing by stating the obvious again and again and again. This depreciating asset lost tons of sex appeal and got fatter. I hope this professional clickbait got a brain at least. On the bright side she is one gurl who makes fags be proud to be what they are thanks to her still ample assets. ..thank you for sharing with us...
Banks are hand in hand with each other, they control the finances that the rest of us rely on. A small rise in interest rates on its own will mean nothing to many but it will help cause a knock on effect eventually, people will have less money, bills will not get paid, mortgage payments missed a few months causing default - you get the picture - good credit goes to bad credit and before you know it we are back in a slump once more - only difference is that maybe this time people will not be turning to the banks to help them but cryptocurrancies to help save them
GDP levels are well over 100%, in Japan it's over 200%, in the United States it over 100%, and this is the same throughout the world. These are levels that they have never been, and they are all at their historic highs.
That's why debt will ultimately be the destructor of the system. In order for that to happen, the cheapness of money that allow states, municipalities and corporations to continue to borrow at these cheap levels has to go away.
I love your extra ! Amazing photo,flawlessly written ! I will save later you :)
I still think any day any time, there is more security of investing in assets than stocks
I also think so bro.
a very different description or detection.It got me thinking. if so, the situation is very bad.thanks for the post, I arastirica