John Williams: “The Fed Will Crash Markets & The Dollar”

 

Economist John Williams warns the Federal Reserve has painted itself into a very tight no-win corner.

No matter what the Fed does with rates it’s going to be a disaster. Williams explains, “You had some very heavy selling towards the end of the year and when you saw the big declines in the stock market you also saw that accompanied by a falling dollar and rising gold prices.”

European Central Bank In Panic Mode as Economy Stalls

 

The eurozone could not borrow from the momentum of the U.S. economy in the third quarter as economic growth slumped to a tepid 0.2% , the slowest rate in more than four years. With the 19-nation currency bloc beginning to stagnate, and the heavyweights failing to post significant gains, Brussels is in panic mode, likely leaning on the European Central Bank (ECB) for further stimulus.

Economists originally anticipated growth of 0.4%. But global trade woes, tumbling business confidence, Italian distress, and the gradual dissipation of an accommodative monetary policy all contributed to the poor numbers in the July-September period.

Signs Point to a Global Slowdown

 

As gold has struggled through 2018, (down over 10% from $1,363/oz. on January 25 to $1,215/oz. today), my forecast for a strong year-end for gold has remained unchanged.

This forecast is based on a better-late-than-never realization by the Fed that they are overtightening into fundamental economic weakness, followed quickly by a full-reversal flip to easing in the form of pauses on rate hikes in September and December.

Those pauses will be an admission the Fed sees no way out of its multiple rounds of QE and extended zero interest rate policy from 2008 to 2013 without causing a new recession. Once that occurs, inflation is just a matter of time. Gold will respond accordingly.

Cologne Institute of German Business Warns of Deposit Protection May Not Survive in Europe

 

The Cologne Institute of German Business sees in the planned European deposit insurance is simply incapable of proving protection against a bank crash in Europe. The EU deposit guarantee is simply not practical under any concept of austerity. The Eurozone still has inherent significant risks in the balance sheets of European financial institutions. This is primarily because where the USA took the bad loans from the banks and stuffed them into Freddie and Fanny, in Europe, the bad loans are still on the books of the banks. Systemically, this has been the leading problem why Europe has been unable to recover and Quantitative Easing merely robber savers of their income and it failed completely to stimulate the economy. Banks were still reluctant to lend and people would not borrow if they did not have confidence in the future.

Goldman Warns That Market Valuations Are at Their Highest Since 1900

 

• Returns likely to be lower across all assets in medium term
• Risk scenario sees inflation jump that ushers ‘fast pain’

A prolonged bull market across stocks, bonds and credit has left a measure of average valuation at the highest since 1900, a condition that at some point is going to translate into pain for investors, according to Goldman Sachs Group Inc.

Schäuble Warns of Coming Economic Crisis

 

In his farewell interview for the Financial Times, Federal Minister of Finance Wolfgang Schäuble warned of a new global financial crisis predicated upon the Quantity of Money theory that the central banks had pumped trillions of dollars into the financial system that is creating a risk of “new bubbles”.  Indeed, many just do not comprehend what is going on and are blaming the new highs in share markets on concerns about the increased risks from the accumulation of more and more liquidity and the growth of public and private debt.

Global credit crunch WARNING issued on debt bubble as current trends mirror 2008 crash

A indicator tracking credit is following a worrying trend [Getty]

 

WARNING signals have been felt today after a key credit indicator mirrored the same pattern experienced ahead of the financial crisis of 2008, in a eerie sign that the global economy is heading for another downturn.

A key UBS credit impulse which monitors the changes in credit volume has tumbled by six per cent of GDP since last year.

It mirrors the same movement seen before the financial crisis 10 years ago, raising fears the global bubble could be about to burst and another credit crunch.

The world economy can’t handle even one US rate hike, strategist Sri-Kumar says

Please see the source for the video.

 

Even one small interest rate increase by the Fed could have a sweeping impact on U.S. and world economies, Komal Sri-Kumar told CNBC on Monday.

“I think they are going to hike” on March 15, Sri-Kumar said on “Squawk Box,” echoing a theory shared by many analysts. “But that is going to prompt capital outflows from the euro zone, especially with the political risk. It is going to increase the capital outflow from China, and the U.S. economy will feel the impact.”

These moves would strengthen the dollar against other currencies, putting downward pressure on the euro, said Sri-Kumar, president of Sri-Kumar Global Strategies.

Draghi Admits EU May Breakup For First Time

For the first time, the head of the European Central Bank, Mario Draghi, has conceded the possibility that the EU may fall apart. Draghi came out and said that any member leaving the Eurozone would need to settle its claims or debts with the bloc’s payments system before severing ties. This statement reveals the heated discussion at Davos and the rift that is beginning to spread. This statement, released on Friday, was made in a letter to two Italian lawmakers in the European Parliament.

One big, fat, ugly bubble is about to burst… and Donald Trump will be wrongly blamed for it

 

(Natural News) Editor’s note: Donald Trump is officially the president of the United States. But what happens now could change everything…in sudden, unexpected ways.

Today, we’re featuring another important essay from Crisis Investing editor Nick Giambruno on this topic. On Wednesday, Nick said Trump could go down as the worst president…but it won’t be his fault. Today, he gives more reasons why Trump is destined to fail…and what you should be watching closely today.

(Article by  By Nick Giambruno, editor, Crisis Investing from Caseyresearch.com)

The establishment is setting up Donald Trump.

The mainstream media hates him. Hollywood hates him. The “Intellectual Yet Idiot” academia class hates him.

The CIA hates him. So does the rest of the Deep State, or the permanently entrenched “national security” bureaucracy.

They did everything possible to stop Trump from taking office. None of it worked. They fired all of their bullets, but he still wouldn’t go down.

Of course, the Deep State could still try to assassinate Trump. It’s obvious the possibility has crossed his mind. He’s taken the unusual step of supplementing his Secret Service protection with loyal private security.

Pensions Timebomb in “Slow Motion Detonation” In U.S., EU and Internationally

 

Max Keiser and Stacy Herbert discuss the end of retirement which many Americans, Britons, Europeans and others will suffer as their pensions are decimated in the coming years due to zero percent interest rates and ultra loose monetary policies pursued for the benefit of banks and corporations.

Governments and central banks bailed out banks at the expense of pensioners and the pensions of workers who have been “thrown under the bus”.

2016 – US dollar warning : the beautiful isolation of the « global reference currency »

Note for our readers : Following our monetary research work under the form of a surveillance of several months, our team is worried again about the US dollar. After a calming two year time, the dollar is heckled again within today’s new multi monetary world. Surprised by the conclusions of its own analyses, presented here below exclusively to you, our team of experts wishes to warn you, the GEAB readers, about the possible danger threatening the dollar. 2016 could very well be the year when the dollar wall will fall…

To explain the current financial turmoil, all official accusing fingers are pointing to a single guilty party: China, the ideal guilty player, the same way Greece and the euro currency were at their time. It is true that evidence seems to be on the side of those accusing fingers, due to the recently unstable Shanghai stock market and its low values.

Opinion: How negative interest rates take money out of your pocket

Negative interest rates, which central banks in several countries have implemented as a way to spur economic growth, is a radical move. In the last of a three-part series, ‘Negative Thinking,’ commentator Satyajit Das examines this policy and its risks.

…

Low rates are supposed to encourage debt-financed consumption and investment, feeding a virtuous cycle of expansion. They also increase wealth, encouraging spending. Low rates and abundant liquidity should drive inflation.

Instead, these policies since 2008 have brought the global economy a precarious stability at best, and have not created economic growth or inflation.

Why a selloff in European banks is ominous

Dark clouds are gathering around Europe’s banking sector.

 

Europe’s bank index has posted its longest weekly string of losses since 2008

European banks have been caught in a perfect storm of market turmoil, lately.

…

“The current environment for European banks is very, very bad. Over a full business cycle, I think it’s very questionable whether banks on average are able to cover their cost of equity. And as a result that makes it an unattractive investment for long-term investors,” warned Peter Garnry, head of equity strategy at Saxo Bank.

Russell Napier Explains How The Decline Of The Yuan Destroys Belief In Central Banking

From Russell Napier of ERI-C

It’s Not a Pet, It’s a Falcon: How the decline of the RMB destroys belief in central banking and a successful reflation

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;

– The Second Coming- W.B. Yeats

First catch your falcon, as the formidable Mrs Beeton might have said if she was in need of a method of catching her main course (see Mrs Beeton’s Book of Household Management 1861- ‘Recipe for Jugged Hare’).