Thursday, September 1, 2016

Crisis Watch Update - Not Much Change

We have concluded here on this blog that really the only thing left to watch for is another major financial crisis so large that it could lead to major monetary system change. Because such an event is impossible to predict from a timing standpoint, I decided to end daily articles here since it could be a long time before another crisis unfolds. 

On the other hand, we have established from many highly credible sources that the conditions for another major crisis do exist and are pretty much present all the time. There are many credible analysts who expect this kind of crisis, but we have only listed many of the warnings issued by both the IMF and the BIS here on this blog. You can see that list here. This is because most people accept these as highly credible sources.

This creates a dilemma for me in trying to serve readers here responsibly. I need to make sure readers are aware of the legitimate warnings and forecasts of credible sources that believe another major crash is either possible or will actually happen. At the same time, I need to make sure that I am not presenting fear based hyperbole if no new major crisis arises any time soon. It's the most difficult issue I struggle with here on this blog.

I have given this problem a lot of thought and my solution is to try and do periodic updates I will title as "Crisis Watch". I will provide a brief summary of all the primary sources of information I follow as to what they are saying regarding the prospects for a new major crisis/crash/collapse. 

This will hopefully assist readers in a responsible way without me having to make any kind of prediction myself because I freely admit that I have no way to forecast a major event like this unless someone inside the system gives me direct input that they see such a crisis ready to unfold. So far, no one inside the system has done so.

With all that said, not much has changed since the last update on 8-1-2016. Therefore, for this report I will just refer readers to this link to the report from last month for anyone new here who may not have seen that update. Below are just a few links to relevant items I have seen during this past month that may be of interest.


BOE Governor Mark Carney - Dishonest Bankers create "Systemic Risks"

John Hussman article on the risk of an unwind of years of low interest rates

BIS report on Derivatives Clearing Houses   ---   Article in the Financial Times

Jim Rickards: Next Crisis Will Result in $10,000 Gold - One Way or Another

Chinas Corporate Debt Challenge - Economia

Quote from Economia article:

"According to the International Monetary Fund (IMF'S) recently published annual report on the Chinese economy, credit is growing about twice as fast as output. It is rising rapidly in both the non-financial private sector and in an expanding, interconnected financial sector that remains opaque. Moreover, while credit growth is high by international standards – a key indicator of a potential crisis – its ability to spur further growth is diminishing."

CBC News: Waiting for a China Crisis to "Reset" the Global Economy

Quote from CBC News article:

"It may be that the world needs a shock, a clearing of the air, an economic storm to reboot the world economy and start things growing again on a new footing. And scanning for possible places for such a reset to occur, China is one eminent candidate."

Kevin Dowd (Cato Institute article) - Keeping an eye on Deutsche Bank

SovereignMan article on recent comments by Thomas Hoenig (see WSJ article here)

Quote from SovereignMan article:

"On Friday morning, a gentleman named Thomas Hoenig wrote some rather unflaterring comments about the US banking system in a little known publication called the Wall Street Journal."

Added comment: Notice how western media like to try and point a finger at China as the potential trigger for any new major global financial crisis. Eastern media tend to point a finger at the US. Should be an interesting G20 meeting coming up in China. I guess if we do get another major crisis, China can blame the US and the US can blame China (watch Donald Trump say China over and over here). That might very well keep people as divided and confused as they are now during a new crisis if one happens. 

Added note 9-2-16 -- This article on the new SDR Bond Issue appears ahead of G20:

Bloomberg - China Construction Bank predicts $7 Billion in SDR Bonds in coming years 

It should be noted that the China Construction Bank is talking about it taking several years to issue just $7 Billion in SDR Bonds. At that pace, this would not be anything that would lead to a major shakeup in the current monetary system any time soon.

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