If This Isn't The Start Of The Crisis, Imagine How Bad The Real One Will Be

Tyler Durden's picture

Submitted by Simon Black via SovereignMan.com,

Chances are you’ve never heard of William White.

You might have heard of the organization that he used to manage—the Bank of International Settlements (BIS).

The BIS is often called the central bank of central banks; their role is essentially to facilitate international financial transactions among the world’s central banks.

So they are a major component in the international financial system, just like the IMF and World Bank.

William White is a central banker who used to be on the BIS management committee. And this makes him a key member of the global financial establishment.

It’s not too often that central bankers are particularly transparent with the public.

Ben Bernanke famously told the world in July 2005 that there wouldn’t be a nationwide decline in home prices in the United States.

Then just a few months later when home prices did fall, he told Congress that the adverse effects of the housing market were ‘contained’ and wouldn’t affect the broader economy.

He was dead wrong on both accounts. And one of the biggest financial crises in history broke out shortly thereafter.

Central bankers seem to always miss the crisis just around the corner.

That’s pretty scary given that they have the power to dominate and control just about everything in the entire economy.

And despite a serial track record of failure, we’re just supposed to trust them to be smart guys. It’s madness.

A few days ago, however, William White gave an interview stating some things that you never hear coming out of the mouth of a central banker. Ever.

According to White, the global financial system is dangerously unstable.

“The situation is worse than in 2007,” he said, and went on to explain that central banks no longer have the ammunition to fight off a major crisis.

He railed against the mountain of government debt that has accumulated worldwide, saying that “it will be obvious in the next recession that many of these debts will never be serviced or repaid.”

White also suggested that banks, particularly in Europe, will have to be recapitalized on an unimaginable scale.

And due to all the new regulations, it will be depositors who have portions of their accounts confiscated by the state in order to fund the bank bailouts.

William White is not alone.

Michael Burry, the man who made $100 million betting against the last housing crisis, sees the same thing.

In an interview last month, Bury spoke about the “absurdity” of the massive level of debt in the system, and the Federal Reserve’s pitiful balance sheet.

When he gave the interview, the Fed’s balance sheet was leveraged 77:1. Today, barely a month later, it’s over 100:1. Incredible.

Financial markets have been in panic mode since the beginning of the year.

Just in the first few weeks of January, US stocks are down more than 10%. In China, the epicenter of the chaos, stocks are down 20%.

Commodity prices continue to fall. Pessimism abounds.

Look, maybe this is it. Maybe the global financial system has truly reached its limit.

Maybe the world has realized that the path to prosperity is not in conjuring money out of thin air, raising taxes, or going deeper into debt.

Maybe people have finally figured out that an insolvent government and insolvent central bank cannot possibly continue to underpin the entire financial system.

Or maybe not.

Maybe this will all be forgotten in a few weeks. And this coming Christmas no one will remember the great crisis of January that almost was.

But to me the incredible thing is how much panic there has been, particularly in banking and financial markets, just at the mere HINT of problems in the system.

It’s a clear indication of how quickly people can lose confidence and an entire system can become unglued.

Maybe things drag on like this for years, with government continuing to pile up debt and central banks continuing their slide into insolvency.

Maybe interest rates can become even more negative, and banks can become even less liquid.

But one day that confidence will turn. And as this month shows, it can all happen in an instant.

Look, I’m an optimistic guy.

Crisis always brings opportunity for those who can see the obvious realities. And I think what’s starting to unfold is tremendously exciting.

Economics isn’t complicated. The Universal Law of Prosperity is very simple: produce more than you consume.

Governments, corporations, and individuals all have to abide by it. Those who do will thrive. Those who don’t will fail, sooner or later.

When the entire financial system ignores this fundamental rule, it puts us all at risk.

And if you can understand that, you can take simple, sensible steps to prevent the consequences.

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Termin8or's picture

Maybe it is a good thing that the Central Banks are out of "ammo" seeing thier track record when they had "ammo".....

Dead Canary's picture

I think we should tax all foreigners living abroad. Hey, it worked for the Romans.

notallangreenspan's picture

Termin8or, I down-voted you by accident. My apologies.

"We down-voted some folks."

Edit; never mind, I figured out how to fix it.


WhackoWarner's picture

Blah blah blah.  Analysis, charts, talk talk talk talk,

 

Face the final game music.  The cards are dealt and the prize is clear.  

Anyone here pay more than passing attention to the article that 62 people....62 ....control the majority of the financial world????  Anyone pay any attention?

 

Think that 62 people are going to walk away at this point? Been building for decades, this.   My precious is so close.

snakeboat's picture

Names. We need the names.

 

and addresses would help, also.

skinwalker's picture

I'm just glad I put off having children. Think I'll wait a bit and see what happens. 

RaceToTheBottom's picture

Need bodies to kick the debt can to.

 

tc06rtw's picture

   
 …  I wouldn’t bother filing my  Income Tax  just yet,  either.

TheDanimal's picture

Need ObongoHooker. Liberal women to fuck into submission. 

greenskeeper carl's picture

thats the truth. my 2 year old has more money than almost any adult, only a couple thousand, but thats more than most adults have because he has no debt. Except, of course, his share of the national debt, in which case he is just as fucked as the rest of us. They need productive people to have children because someones gotta pay all the interest on that debt.

 

And to the other poster, you still gotta live your life, no matter what bad shit happens. Having kids is truly great. While it scares me what kind of world they will inherit, and yes, they are expensive as hell, I wouldn't change it for anything, and you won't either once you have one. Just don't have more than you can realistically provide for. I think the two I have now is my limit. Its two fold - for one, I don't want to overextend myself, since i want to be able to provide a good standard of living for my family, eat healthy(which means kind of expensive) food, nice quality cloths, etc. The other side is that while I could "afford" three kids right now, the money to pay for it would come at the expense of me saving money, and I don't want to end up working as a greeter at walmart when Im 80 because I didn't save. Its a balance. But don't let fear of the unknown stop you from doing what you and your spouse want. Its a gamble, to be sure, but what isn't these days?

BandGap's picture

If you put pencil to paper you will never justify the cost of having children. I have six. I will always be glad to have them, regardless.

If you want kids, go for it.

dirtscratcher's picture

@Bandgap

Thank you for that. I could elaborate, but I won't. Suffice it to say: Thank you for that.

WhackoWarner's picture

Don't have children HAVE warriors equipped with knowledge. 

tokerhead's picture

the assholes ain't done fucking up shit yet.

NotApplicable's picture

Agreed. All this means is that it won't be so easy to obfuscate this time.

Luckily for them, war makes for a fine diversion.

GreatUncle's picture

You got to laugh.

Just fucking print on a system that can never add up is the only solution. Then like it is now those that don't get the QE bung will hate you.

51% getting the deal keeps u going feeding the 1% alone will nit keep the 1% alive.

Truth now this problem has been growing for so long you can' t pretend no longer

GreatUncle's picture

You got to laugh.

Just fucking print on a system that can never add up is the only solution. Then like it is now those that don't get the QE bung will hate you.

51% getting the deal keeps u going feeding the 1% alone will nit keep the 1% alive.

Truth now this problem has been growing for so long you can' t pretend no longer

RaceToTheBottom's picture

But this time is different.

Winston Churchill's picture

It sure will be, but not in the way  you think.

Sudden Debt's picture

The trick is to lure as many morons in the market so the elite can at least sell their remaining stocks before it all flatlines.

Anybody still in stocks... Fuck them.

Jstanley011's picture

By my back-of-the-napkin calculations, there's $4 trillion in "retirement money" exposed to the stock market. Okay well, that was last year's pencil so it's closer to $3.6 trillion now.

"Retirement money." In the stock market. Roflmao...

"The stupid is thick on this planet, Jon Luc."

Dick Buttkiss's picture

"Better a year early than a day late."

But who's listening.

Rainman's picture

" Pension funds are the biggest joke in municipal government "

              Mayor of Troy, New York

silverer's picture

...but if you can promise them right up 'til their death...

Victory_Garden's picture

Wolf...wolf...wolf...wolf...wolf...wolf...wolf...wolf...wolf...wolf...wolf...wolf...wolf...wolf...wolf..

...wolf...wolf...wolf...wolf...wolf...wolf...wolf....Kaboom!

Fear fear fear fear...how to steer 101.

Be the heart that knows, not the mind that is easily fooled, or imperialistically conditioned.

When do they play that big distraction Super-Game a la carte in SF, any ways?

sgorem's picture

“it will be obvious in the next recession that many of these debts will never be serviced or repaid.”..........DUH..........sounds like something that could maybe,.......UH..........start a WORLD WAR???:)

ToSoft4Truth's picture

"Central bankers seem to always miss the crisis just around the corner."

 

Nah.  Some gullible people believe others really are looking out for their best interest even though demonstrative evidence to the contrary has been entered into the historic record time after time. 

taketheredpill's picture
So we get the Global Depression we were going to get in 2008 (and 1999 and 1995....) but it ends up being exponentially worse. Do the people running the show sit back and say sorry?  Or do they take advantage of the crisis to implement "emergency" measures...what that could be who the fuck knows.
silverer's picture

I think it's your second scenario. 

Implied Violins's picture

Can you say, "globalism"? Because I believe they *created* this shitstorm to bring on their "solution", and having a member of the BIS call it straight should make EVERYONE wary.

xxxxx's picture

When the central banker of central bankers tells you the Europian banks will fail AND the people will have to pay for it. I am surprised there are not bank runs there.

WhackoWarner's picture

Grow up.  Emergency. war, poverty, urban drones, middle class collapse have all been think tanked already.

The remaining cards involve collapsing resource prices such that companies can be bought for pennies and all control passes to "the one ring that unites them all".

messystateofaffairs's picture

People plan but things get out if hand. Looks like some kind of clusterfuck to me. Maybe these financial and economic geniuses know how to make a NWO chocolate pie out of this pile of shit or think they know how. I don't know.

FreeShitter's picture

Our entire economic model is based on a select few of satanic pedophiles with their claws on Ctrl P......let that sink in for a minute motherfuckers.

o r c k's picture

 new rule?  The more you steal, the less you fear

PoasterToaster's picture

This is how the "powers that be" become the "powers that were".  The world is outgrowing these financial control schemes and every day these central controllers make themselves more irrelevant.  Soon we will be free of them.

cougar_w's picture

It all ends with the end of growth in the means of production. Which happened about 15 years ago, but nobody really noticed. Since then the global economic story has been rolling on stored momentum alone, but that was just an illusion of "going forward" which even a car completely out of gas can do ... until it can't.

The pundits will try to make "some other kind of sense" out of all that, because their bread+butter is all tied up in the growth story. It's fine they can think whatever they want to, it doesn't matter.

It's over. It's not going to be not over ever again because it can't be. There are no do-overs here.

Whodathunkit's picture

Is Bill White the antithesis of Bill Black?

Setarcos's picture

Quote:

"Economics isn’t complicated. The Universal Law of Prosperity is very simple: produce more than you consume.

Governments, corporations, and individuals all have to abide by it. Those who do will thrive. Those who don’t will fail, sooner or later.

When the entire financial system ignores this fundamental rule, it puts us all at risk."


 

I'll cite another simple rule which negates all current economic theories:  WE CANNOT HAVE INFINITE EXPONENTIAL GROWTH ON OUR FINITE PLANET.

Winston Churchill's picture

You can, by drastically changing a variable.

The great cull draws nigh.

KashNCarry's picture

The present dark ages which began in 1973, will make the last dark ages look like Disneyland! And there won't be anyway to dig ourselves out of this one living on a finite planet.