Global Central Banks Are Facing a Crisis Larger Than 2008... And With Little to No Fire Power Left!

Phoenix Capital Research's picture

There is talk of another 2008 hitting the markets.


However, what’s coming will not be another 2008. It will be worse than 2008.


There are several reasons for this.


Firstly, today, there is over $20 trillion more debt in the financial system than there was in 2008. If 2008 was a debt bubble that needed to burst; today the bubble is even larger.


Secondly, Central Bankers have already employed both ZIRP and NIRP for years. In 2008, we had only just begun to experience ZIRP in the West and NIRP was still considered a “nuclear option” that bordered on insanity.


Today both ZIRP and NIRP are commonplace. Indeed, the EU has cut rates into NIRP three times in the last 18 months. The world has watched as these actions have barely resulted in an uptick in the EU’s inflation.



Central Bankers have also employed Quantitative Easing, another “nuclear option” that had yet to be unleashed back in 2008 (the Fed launched the first QE program in December 2008).


To date, global Central Banks have printed over $14 trillion in new money to buy bonds via QE. Even banking systems in which the legality of QE was questionable, such as the EU, have launched QE programs that are €1 trillion or larger.


These programs have been massive in scope. In Japan, a single QE program equal to 25% of GDP was launched in April 2013. Japanese GDP growth barely moved higher before once again rolling over.  Even an expansion of this already incredible monetary policy in October 2014 failed to ignite significant growth for Japan’s economy.



Finally, today, Central Bank balance sheets are already bloated to the point of being larger than even some of the larger countries’ economies.


The Fed’s balance sheet is over $4.5 trillion, larger than the economy of Germany and just smaller than the economy of Japan. The ECB’s balance sheet is €2.7 trillion, larger than the economies of France or Brazil.  The Bank of Japan’s balance sheet is over $3 trillion, larger than the economy of the UK.


And on and on.


With Central Bank balance sheets so massive already, the marginal effect of more expansion, (even via massive new QE programs) will be much less than it was in 2008. In 2008, Central Bank balance sheets had ample room to grow. Today, investors have already seen what a 200% or 300% expansion of a Central Bank’s balance sheet can buy.


In short, Central Banks are in far worse shape than they were in 2008 to deal with another crisis. And that’s too bad, because the coming crisis will be significantly larger than that of 2008 (again there is over $20 trillion MORE debt in the system than there was then).


Smart investors are preparing now.


We just published a 21-page investment report titled Stock Market Crash Survival Guide.


In it, we outline precisely how the crash will unfold as well as which investments will perform best during a stock market crash.


We are giving away just 1,000 copies for FREE to the public.


To pick up yours, swing by:


Best Regards


Graham Summers

Chief Market Strategist

Phoenix Capital Research







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Herdee's picture

The United States,China and Europe all have one thing in common.They'll do whatever it takes to mirror Japan.That's the endgame and its not a sign of anything getting better.It's like a heroin addict,with the solution of going to the poppy fields in Afghanistan.IMO,lots of negative,free money coming down the pipeline for years to come.Life without interest,I hope it's the end of usary.

GreatUncle's picture

In 2008 was a wake up call, they socialised the debt and stole all the profit they could.

Now they got away with it that time, so there was no need to change the system was there? So stacking debt at a faster rate since 2008 we are gradually getting there yet again. The faster we stack the debt the faster we get to the next event.

The call is this, "can they pull it off again and do it all over again"? There is no other call because they are not going to change a system that is so beneficial to them. So unless you use ultimate force against them they will continue and all moderate protesting fucking pointless, political promises will be broken, they will say there is no other way, etc. etc....

They needed busting in 2008, everything confiscating in full and nationalised not because it is good because the taxpayer fucking paid for it. Then there would be no socialising the debt and no more stealing all the profit. So far since 2008, not one piece of legislation has been enacted or implemented to prevent this process occuring again if anything it has been assisted with bail in provisions etc.

It will happen again, they are designing it to happen again because it worked last time!

That last point is now the point that needs breaking and that means only violence now, because precedence was set last time so they will not even ask it will happen and they will say "well that is what we did last time". If you hgave kids they are so fucked under that kind of system so I can only guess "parents today do not give a fuck about their throwaway kids".

Quebecguy's picture

Tyler I guess some of the banks are disguising ZIRP with higher loan rates. 

Truth Eater's picture

It matters not how much debt there is but who holds the debt.  In the last 7 years, banksters were clever to get their buddies to move their private debts to public liability.  Follow who transferred debt to whom and you will see a better picture of what is happening. 


Profits were privatized while debts/ losses were put on the public.

BOPOH's picture

Once upon a time I have bought one hundred dollar bill for a fraction of it nominal amount. It was counterfeit one. Same has to be in the credit business. Soon I am going to visit my bank loan officer and make a deal: I borrow $100,000.00 today and in ten years I will pay you back $50,000.00. How it's sounds, good and fair right?