It’s the week of April the 13th 2016, a week that could go down as very important in the years ahead, a time when something cracked in the calm corridors of financial power. Consider the following:
There was a secret emergency secret meeting of the Federal Reserve Lat last week. There was then a secret meeting between Obama, his Vice President and the Chairwoman of the Federal Reserve on the 11th April, followed by another emergency secret meeting of the Federal Reserve. This is in a week when the G20 finance ministers were meeting in the same city. This is in a week when the World Bank and the IMF were meeting in the same city!!!
These meetings do not happen unless something is very wrong. The blog From which I am getting this information (Knave Dave) suggested the following possibilities:
1. Defaults in the US energy sector have reached a critical mass and are effecting the solvency of the US banking system. Defaults have already hit 40 this year. Bank profits are forecast to be the lowest in many years for the first quarter, if any profit at all.
2. The Italian government has just called an emergency meeting to figure out how to deal with 350 billion a euro of bad debts in its banking system that have nowhere to go but collapse the banks behind them.
3. The Austrians have just closed a corrupt bank that has cost their government billions. They are now demanding a haircut from depositors, ie large banks who hold most of the loans and bonds to this bank. This is the first depositor haircut under the new European banking rules. This has ramifications for some very big and very distressed European banks, a domino effect could be building. An Austrian bank that collapsed in 1931 pushed the whole world into the depths of the Great Depression.
4. The American economy is sliding very fast into a recession, which would likely deliver the presidency to either Sanders or Trump, an anathema to the establishment.
5. China is a mess, it is now borrowing money at the rate of $trillions a year just to pay the interest on its $30trillion mountain of debt, used to create an artificial boom in construction ( http://www.zerohedge.com/news/2016-04-12/new-middle-kingdom-concrete-and-red-depression-ahead )
Perhaps it is all five? Anyway, something big is going on in the big end of town and we are going to feel its effects very soon.
is this another reason why gold has taken off this year?
you can see the entire fascinating article from “Knave Dave” below