Damn. Just noticed that I have already published this some months ago. Well, repetition is the source of all learning. ;)
Many have had an uneasy feeling about the economy for a long time, and for a good reason. In this article, I will explain why the actions of central banks and governments, over the past 15 years, are leading the world into an economic crisis of epic proportions. They have chosen this road deliberately, yet not maybe malevolently, but we will end up paying a hefty price regardless.
Economic collapse is something we at GnS Economics have been warning since March 2017. In December 2017 we assessed that the first signs of the collapse would appear in 2019, and they did. The near-collapse of credit markets in early January 2019 leading to the ‘pivot’ by the Federal Reserve, followed by a near-collapse of the U.S. repo-market in mid-September leading to the “Not-QE” by the Fed, signaled that the financial system was unable to stand without continuous central bank support. Essentially, without these ‘bailouts’ the crisis would have, most likely, commenced in 2019.
After a series of ever more pervasive bailouts, we now face a similar, but a much more daunting dilemma. The global economy is edging towards a recession with bloated public and private balance sheets. Governments, corporations and many households are more indebted than ever. This calls for a massive global bailout by central banks, when the crisis hits, which would bear dire consequences to us all. Let’s examine the situation, and our recent economic history, in more detail to understand why.
When central banks mess up
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