Monday, March 16, 2015

Nomi Prins Warns Increasing Volatility Signals QE End Game Nearing

Nomi Prins is a former Goldman Sachs manager that we follow here on the blog. There are only a few people that have extensive experience inside the present banking system who offer their insights to the public on these somewhat sensitive issues. 

In her new blog article, she goes into detail about how the increasing volatility we see in all markets is a sign of stress in the present system. She notes that the current policy of subsidizing speculation by the major banks "can't last forever."

Below are some quotes from her article and then a comment. To read the full article, click here.


"The battle between the ‘haves’ and ‘have-nots’ of global financial policy is escalating to the point where the ‘haves’ might start to sweat – a tiny little. This phase of heightened volatility in the markets is a harbinger of the inevitable meltdown that will follow the grand plastering-over of a systemically fraudulent global financial system. It’s like a sputtering gas tank signaling an approach to ‘empty’.

Obscene amounts of central bank liquidity applauded by government leaders that have protected the political-financial establishment with failed oversight and lack of foresight, have coalesced to form one of the most unequal, unstable economic environments in modern history. The ongoing availability of cheap capital for big bank solvency, growth and leverage purposes, as well as stock and bond market propulsion has fostered a false sense of economic security that bares little resemblance to most personal realities."

. . . . .

"This latest rise of market volatility, however, is foreshadowing the real end of global QE as a proxy bond investor packaged for political purposes as necessary to combat deflation, increase liquidity, or whatever the reason-du-jour providing the QE program legitimacy beyond its true function of providing cheap capital to the private banking system, is."

. . . . . .

"All this is fodder for triple digit market swings. Somewhere in the madness, lies the notion that this particular policy of speculation subsidization for the upper banking class can’t last forever. There are only so many entities that can buy so many bonds and filter so much cheap capital into the system for so long. At some point the ECB program will run its stated course. Rates around the world will head to zero or somewhat negative. And then what?  There will be no more powder in the QE / ZIRP global keg. That’s when it gets really bad."

. . . . . . . . Meanwhile, the rising volatility we will face this year (to the downside) in the financial markets, will be a forbearer of this unraveling. The best course for mere individuals is . . . . .  click here to see what her recommendation is.
My added comment:

We can add Nomi Prins to the list of those who sense that the ability to sustain the present monetary/banking system is nearing an end. That is what this blog was started to keep an eye on in the first place. If you are willing to spend some time looking through the archives on this blog (in the column to the right), you will see many links to warnings about risks in the present system coming from the leading financial institutions in the world (the IMF and the BIS). You will find links to similar warnings from respected experts like Jim Rickards, Andrew Huszar, and Nomi Prins. These are people who have worked inside the system. People we should listen to.

All of this means it is important it stay informed and have some type of a plan in mind in case we do get a breakdown in the present system. Former IMF senior staffer Peter Doyle tells us not to expect any kind of early warning for the next systemic crisis from the IMF. He notes that the IMF issues working papers that mention risks (like we have documented here), but never forecasts that those risks will escalate into a new full blown systemic crisis. He says the IMF cannot do this because they are beholden to the major powers that run the present system who exert political pressure on them to avoid alarming the public.

This means we are pretty much on our own to stay alert and informed. We will continue to feature experts like Nomi Prins and Jim Rickards here as some of the best sources of information available on these important issues. Ms. Prins advises us that a new interview with Greg Hunter is available online now that explores this same topic in more detail. You see that new interview here.

No comments:

Post a Comment