- Janet Yellen Meets With Obama in Emergency Meetings As Crises Erupt Worldwide
by The Credit Suisse Fear Barometer just hit an all-time high as reports circulated through the alternative media that Barack Obama discussed the imposition of martial law when he and Vice President Joe Biden met with Yellen on Monday in an “emergency meeting.”
The reports may be exaggerated but not the crisis-like feel of the meetings. This was reportedly a first: having the president and VP meeting directly with the Fed head. Does it have something to do with the “survival of the government” at a time when the US banking system may be facing a general default? According to some reports: “Members of the House and Senate are said to have been ‘up all night’ in discussions and meetings; with floods of phone calls back and forth. ”
Pick of Problems
What could be the problem? Take your pick of dozens, literally!
There’s South America’s largest country, Brazil. It has the seventh largest economy in the world but these days it is mired in what’s been called a “depression.” Employment has cratered and price inflation keeps rising, bringing people out onto the streets in huge protests. Meanwhile, the huge corruption scandal having to do with Petrobas has sent many pols to jail and may soon claim the president who is facing impeachment.
In Venezuela, where I just visited (and barely survived), to see hyperinflation in person the country is on the brink, pushed to the edge by the oil price collapse. People carry around backpacks full of Bolivars to get through the day. The murder rate in Caracas is so bad that people don’t go out at night. The morgues are full. The streets are empty.
Austria just made a historical first with its first bank “bail-in” amidst hurried meetings in Europe. The failed Hypo Alpe Adria bank – the Heta Asset Resolution AG – was forced by creditors into an involuntary “bail-in” after an $8.5 billion capital hole in its balance sheet became apparent. Austria is the first to use a new law now part of the European Bank Recovery and Resolution Directive to share losses of a failed bank with senior creditors as a way to slash bank debt. It won’t work though. This will see investors piling out of bank stocks which, in itself, can cause the bank to fail. And once that happens, then the Cyprus-style depositor bail-ins begin.