This is correct Wolfgang, I am writing about this currently for subscribers.
As far as I know, and correct me if I’m wrong, the bond market is the largest market in the world (aside from derivatives).
Graham Summers makes sense to me in his thinking. Any Central Bank action, such as QE and ZIRP, is not about resuscitating economic growth, but preventing a bond market collapse, and hence a worldwide financial debacle.
Add the quadrillion dollar derivative market, which is tied to bonds, and you have the formula global Depression.
Of course, despite the reputation and size of Central Banking, we all know the free markets can cut the legs out from under and any Central Bank action. At will.
What’s in your wallet?
CIGA Wolfgang Rech
The ECB Comes Clean On Rising Rates and the Coming Systemic Reset
November 30, 2017
Remember how the Fed, ECB and others all claimed ZIRP and QE were about generating economic growth, making mortgages more affordable, and helping consumers?
Well, that was a gigantic lie. The truth is that every major policy employed by Central Banks since 2008 have been about one thing…
Maintaining the bond bubble.
Governments around the world have used the bubble in bonds to finance their bloated budgets. If interest rates were anywhere NEAR normal levels, most countries would lurch towards default in a matter of weeks.
If you think this is conspiracy theory, consider that the European Central Bank openly admitted this in its semi-annual Financial Stability Review this week:
Even so, [the ECB] said that “higher interest rates may trigger concerns about sovereigns’ debt-servicing capacity,” and noted that “distrust in mainstream political parties continues to rise, leading to fragmentation of the political landscape away from the established consensus.”
In plain speak, the ECB is admitting here that if rates were to rise, the financial world would quickly realize that most countries couldn’t finance their debt payments. Indeed, the five largest economies in the world are all near or above Debt to GDP levels of 100%
CIGA Hugh telling it like it really is!
We live a world of double standards for sure. Matt Lauer loses his job and get dogged, while Bill Clinton does the same thing or worse with women and nothing happens!!
Meanwhile the markets are moving like we are in the greatest economic boom in our life time. Absolutely nothing makes sense anymore.
I have been waiting for the world to come to its senses since 2008, only to see things get worse. I do not know what or who to believe in anymore.
I do not know how you and Jim can stay so positive!
Thanks for listening. Peace and god bless.