As we kick off the third week of trading in October, today James Turk warned King World News that the coming financial storm will devastate the world.
James Turk: “There was some remarkable news about the future of the euro reported here in London over the weekend, Eric. The Daily Telegraph picked it up from an obscure central banking publication, and I am pleased that they did…
Otherwise this shocker might have been buried without the attention it rightly deserves. And the Daily Telegraph did not hold back, as the following quote leading into their article makes clear.
“The European Central Bank is becoming dangerously over-extended and the whole euro project is unworkable in its current form, the founding architect of the monetary union has warned. ‘One day, the house of cards will collapse,’ said Professor Otmar Issing, the ECB’s first chief economist and a towering figure in the construction of the single currency.”
Issing is well known in Europe and a very respected figure. Even though he is retired and no longer in the ECB, his words carry a lot of weight in business as well as political circles. This blunt assessment from a former insider is remarkable for its frankness and is likely to reverberate though a lot of board rooms and political circles.
It is particularly noteworthy that Issing has been a keen advocate of the so-called European project that aims for closer integration of Europe’s nation states, which of course is what the United Kingdom rejected with Brexit. So hearing this news from a europhile is going to make a lot of people uncomfortable. And I am referring to people both inside and out of the ECB.
The Daily Telegraph report went on to say:
“Prof Issing said the euro has been betrayed by politics, lamenting that the experiment went wrong from the beginning and has since degenerated into a fiscal free-for-all that once again masks the festering pathologies.”
The article then quoted Issing directly:
“Realistically, it will be a case of muddling through, struggling from one crisis to the next. It is difficult to forecast how long this will continue for, but it cannot go on endlessly.”
It is interesting that Issing sums up in a way that I think captures the prevailing mood. People sense things are wrong. That’s why the UK opted for Brexit. But things aren’t going badly just here in Europe of course.
Popular option polls in the US continue to report that the country is headed in the wrong direction. That’s why an outsider of the political mainstream like Trump received the Republican nomination.
Yet policymakers continue to follow the same old failing policies. For example, Bloomberg today reported that “Big Central Bank Assets Jump Fastest in 5 Years to $21 Trillion.”
All central banks do is debase national currencies by printing evermore currency. The only difference between the central bank of Venezuela and the ECB, the Fed and other central banks is the speed at which they debase, which brings up an important point…..More Here