Banks Demand that The FedRes And ECB “Try Every Last Thing They Can” to Save Their Hyperinflated Ass!
- QE, money printing, creating a massive amount of money out of thin air, is not about helping the real economy. It is not about helping the sheeple, Mr Joe Public, Main Street. It is about saving the Illuminist banks. Both US and UK have indulged in QE times. Did QE1, QE2, QE lite … work? Of course, it did not!
- Deflation means asset prices go into a period of sustained decline. It is a death sentence for banks. For eg. banks loan out money to house buyers using their property as collateral. Say they loan out US$1M to a couple to buy a house. Should the couple lose their job and default on payment, the banks will take the house as collateral. In a period of deflation, house prices are declining. The house price will end up far lower than the outstanding US$1M loan amount. The bank’s balance sheet will show negative equity for such properties ie. Loss.
- In a period of deflation, banks will end up holding collateral that are rapidly declining in value. It may be real estate, factory machineries … etc. Banks will collapse! This is what is happening in the western world now. Although, there is commodity price inflation, asset prices are falling, in particular real estate. To save these banks, the central banksters need to drive up asset prices ie. inflate! Say an asset with book value of US$1M but market value of US$200K (ie. negative equity of US$800K); by hyperinflating, this asset can easily cross the US$1M mark and thus be a profit and not a loss! So all debts, liabilities and losses can be hyper-inflated away. If a bank is fined US$100B for Libor fraud, when hyperinflation kicks in and a cup of coffee costs US$10B, US$100B is no big deal !
Banks Demand that the Fed and ECB “Try Every Last Thing They Can” to Save Their Hyperinflated Ass!
U.S. Treasury Secretary Tim Geithner, wanted on this side of the Atlantic for criminal complicity with the banks’ LIBOR looting rampage, spent July 30th in Germany, where he tried to break every available limb of German Finance Minister Wolfgang Schaeuble’s, to get him and Chancellor Angela Merkel to go along with the hyperinflationary bailout strategy uttered last week by ECB head Mario Draghi.
The “Weimaristas” that Geithner represents are desperate beyond words. They are putting on a full-court press to get the U.S. Fed (at this week’s Tuesday-Wed FOMC meeting), the ECB (at its Thursday rate-setting meeting), and the Bank of England (which also meets Thursday), to print money like there’s no tomorrow. A Bloomberg wire quoted JP Morgan’s chief U.S. economist Michael Feroli saying: “They [the Fed and the ECB] are at the end of their rope and are probably searching for every last option for what they can do… You can’t rule anything out, because they’re going to flail around and try every last thing they can.”
In the same vein, the London Telegraph‘s Angela Monaghan writes that there is “mounting speculation of a dramatic intervention by the ECB to arrest the crisis engulfing the region.”