Legend Warns We’re Entering The Most Dangerous Phase Of The Worst Crisis In World History

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Legend Warns We’re Entering The Most Dangerous Phase Of The Worst Crisis In World History

On the heels of six weeks of chaotic trading in markets, today the man who has become legendary for his predictions on QE, historic moves in currencies, and major global events, just warned that we’re now entering the most dangerous phase of the worst crisis in world history.

By Egon von Greyerz, Founder of Matterhorn Asset Management

Central Bank heads believe they are magicians who can wave their magic wand to create whatever economic conditions they desire. But the problem is that they are consistently wrong in their assessment of the economy so they don’t know what to do with the wand. Also, the wand is not magic but just bogus. And this is the dilemma of all central banks. They are given unlimited powers to manipulate monetary policy and to print money…

 

Egon von Greyerz continues: But when you give infinite powers to someone who can neither assess the situation properly nor understand the consequences of his actions, it is like giving weapons of mass destruction to a bunch of kids. It is actually worse than that because the bankers are using the weapons to create wealth for their banker friends.

King World News – Richard Russell – Prepare For Something Worse Than 1929 – 1932 … Will The U.S. Seize People’s Gold?Booms, Busts & The Destruction Of The World Economy
Thus central banks have created mega wealth for a small minority and unlimited debt and misery for the rest of the world. What central banks are doing is to create booms and busts of a magnitude that destroys the economy. And this is exactly what will happen in the next few years.

The world economy would function considerably better without central banks. Instead of the massive booms and bust that we currently have, there would just be natural self-correcting economic cycles of much smaller amplitude. The turn of the cycle that is now beginning will change the world for a very long time. One hundred years of mismanagement will lead to economic and human misery that could last decades or even centuries as at the end of the Roman Empire.

US Monetary Policy Has Created A Global Problem
Back in December after the Fed rate increase, we said the Fed again made an incorrect decision that soon would have to be reversed. Well, this week in her statement to Congress, Federal Reserve Chairwoman Janet Yellen started to backtrack. But like all politicians she neither sees nor would admit that most global economic problems stem from US monetary policy. It is because the US has lived above its means for more than half a century and flooded the world with worthless printed dollars that we are now in this mess. But since she is a politician, Yellen would never admit to that. Instead she blamed market turbulence and higher risks from China for conditions being less supportive of US growth. It is amazing how politicians can never be honest and see the log in their own eye rather than the splinter in their neighbor’s eye.

It reminds me of Gordon Brown, the former Labor Party prime minister of Britain who, when he was chancellor of the exchequer, told Parliament that he had abolished boom and bust. But when the 2006-9 crisis started, Brown blamed international conditions and not his own mismanagement of the economy.This is the immorality of politicians — they take credit for all good things but blame others for all the disasters they create.

KWN Embry I 2:9:2016

Negative Rates In The US
So Yellen has made another mistake that she half admitted to. As I said back in December, it will not be a question of no more rate increases but of rate reductions and probably even negative rates. Yellen confirmed that the Fed is studying negative rates. She said, “We would want to be prepared in the event that we needed to add accommodation.”

This Fedspeak is just unreal. Why can’t they ever use language so that ordinary people understand? Well, we know why. They create fancy terms like “quantitative easing” and “accommodation” to make people believe that the Fed is doing something very complex and clever. Why not use the proper words like “money printing” and “interest rate manipulation”? But then the world would know it is just trickery, so that is why central bankers must hide behind incomprehensible Fedspeak.

Anyway, Yellen knows that negative rates are likely to come to the U.S. jusdt as 13 countries have them already.

The competition for who has the lowest rates is heating up. Switzerland is still leading with -0.75%. But Sweden is now catching up and just went to -0.5%. (I promise it is just a coincidence that I am both Swedish and Swiss!) Sweden’s economy is in relatively good shape currently so a rate reduction is not really justified. But the Riksbank’s official reason was that inflation is too low. What they don’t realize is that low or negative rates don’t stimulate the economy. They discourage savings and therefore also discourage investment.

But the real reason to lower rates is not low inflation but to win the currency race to the bottom. This is what Sweden and Switzerland are competing for together with at least another 11 countries with negative rates……More Here

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