Tuesday, January 20, 2015

Nomi Prins: We are in a Financial Meltdown

Former Goldman Sachs banker Nomi Prins does this new interview with Greg Hunter. She covers a broad range of topics in this interview including propects for the dollar, the Swiss Bank depeg from the Euro, and the impact of the collapsing price of oil. Just click on the link above to watch the full interview.

Here some quotes from USA Watchdog site from this interview:

"Best-selling author and financial expert Nomi Prins says, “We are in a financial meltdown.  I said 9 or 10 months ago, it hadn’t happened yet, but it should happen because of the instability of a system that is supported by central bank maneuvers and not really anything organic and leveraging and reaching for yields in places like oil and natural gas and other places on the virtue of cheap money. . . . It kind of boggles the mind.  This QE is epic.  It’s historic.  It is larger and more insane that ever in history.  It is pan-global.  The reason that things have kind of stayed in place is because there was enough cheap money coming into the system and enough corporations getting it . . . that really kept the markets artificially buoyed by virtue of this cheap money coming  in.  That’s kind of coming to a stop.  The ECB QE will help provide the markets and banks some solvency for a while and some buoy for a while.  So, therefore, there is still a little bit coming in.”

". . . I think the dollar will get weaker, but I don’t think we are going to see that plunge in the very near term because every other country is struggling right now.  That’s why there is still an advantage to the dollar and, again, not because our policies dictate that and not because this extra debt is smart.”
"On gold, Prins contends, “This shift to the dollar going down, I think, will be more gradual.  For the same reason the dollar stays strong is the same reason gold has done okay very recently but hasn’t had this major outbreak. . . . Gold will increase this year–also gradually for the same reason the dollar will not dump but could decrease gradually as QE and all these maneuvers play out.  I don’t really think this is going to be that breakout year.  The markets are going to go down because of the end of all this artificial aid, but we also have been underestimating the aid that gets continually dumped into the markets and into these banks.  That’s where the timing is critical to look at. . . . There’s going to be a negative market.  There’s going to be a downward impact on the markets.  There’s going to be an upward impact on gold.  All of that will happen.  It’s just not going to be as huge this year.  It’s going to be a more gradual working into that this year.”
My added comments:
Nomi Prins comments regarding the US dollar and gold are somewhat in agreement with what we have talked about here. That being, both the dollar and gold may remain strong for awhile as capital moves in a "flight to safety."  She predicts that the change in these markets will probably be gradual rather sudden because the US is still doing better than much of the rest of the world. This could help hold up the dollar longer than many are expecting.

Over time, if gold begins to out pace the US dollar, it would indicate the major confidence has been lost in the present financial system. For now, there appears to be confidence in both the dollar and gold so long as the dollar continues to be the global reserve currency. 

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