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Emergency Central Bank Intervention Coming?

By       Message Stephen Lendman     Permalink
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Evans-Prichard added that LTRO problems abound. Draghi may have no way to resolve them. He cited Capital Spreads' Angus Campbell saying he needs radical ECB mandate change to deliver as promised.

"Until European politicians can agree to the necessary treaty changes, we could see this rally fizzle out as quickly as it materialized." Achieving it requires 17 Eurozone member countries agreeing. It won't happen quickly if at all.

Peter Schiff is a longtime skeptic. He thinks economic collapse could begin August 1. He posits a worse crisis than 2008. Others agree. 

The late Bob Chapman predicted economic collapse any time from late 2012 to 2017. No one can predict timing. All sorts of stopgaps can delay trouble. Central banks used many. At issue is how much more can they do.

According to Schiff, QE III delays America's day of reckoning. At the same time, it'll weaken the dollar and won't lift the economy. He envisions an eventual Greek-style crisis.

"We have a much bigger collapse coming, not just the markets, but of the economy. It's like what you're seeing in Europe right now only worse," he said.

Chris Martenson says accelerating debt at first goes unnoticed. At the same time, it's accelerating to unsustainable levels. "That's when chaos breaks out," he believes.

According to Harry Dent , eventual debt bubble deleveraging will collapse markets. When air starts coming out of the balloon, watch out.

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Phoenix Capital Research 's chief market strategist Graham Summers says neither the Fed or ECB can stop what's coming. Monetary policy didn't resolve issues causing 2008 crisis conditions. They exacerbated them and created new ones.

Awakening comes slowly. Market professionals are "incentivized not to realize" dire issues. Now, they're "slowly realizing that 2008 was actually 'the warm up' " for worse things to come.

The Fed knows aggressive monetary intervention eventually causes trouble. As a result, it decelerated. It's only action since last year was Operation Twist and extending it. 

Officially it's called the Maturity Extension Program. It exchanges short-term debt for longer maturities. In theory, it's to lower interest rates on 10-year Treasuries. It also represents QE without printing more money and thereby dampens inflationary pressures.

Since June last year, the Fed "rein(ed) in monetary stimulus." It "largely relies on verbal intervention....The general public and financial media are" just catching on.

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"(I)n some ways, (the Fed) is at the end of its rope in terms of monetary intervention." It's been clear in FOMC (Federal Open Market Committee) statements.

Its latest one said it's "holding off on increasing monetary accommodation unless the US economic expansion falters or prices rise at a rate slower than its 2 percent target."

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I was born in 1934, am a retired, progressive small businessman concerned about all the major national and world issues, committed to speak out and write about them.

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