"Central Banks Are The Market" & Nomi Prins Warns "It Can't Go On Forever"

Via Greg Hunter's USA Watchdog blog,

Two time best-selling book author Nomi Prins says the rescue policies of the 2008 financial crisis are still with us today. Prins is out with a brand new book called “Collusion: How Central Bankers Rigged the World.” 

The enormity of our current global debt problem is caused by central bankers.  Prins explains, “It is huge...

"The debt is between two and a half to three times global GDP, which is an historical high.  Debt to GDP throughout the developed world is higher than it has ever been, and it continues to grow.  Why?  Because money continues to be conjured up and rendered cheap for the participants at the top of the financial system.  The banks, the major corporations, the people who make money out of that, and it hasn’t washed down to the rest of the economy.  This is why most people feel this anxiety about another potential financial crisis, but also about what happens every day in their own pocketbooks. 

So, it is worse.  These central banks today, 10 years after the financial crisis occurred, that was supposed to be an emergency situation.  They have $21 trillion worth of conjured money in return for debt assets, stocks and corporate bonds around the world. 

If they pulled that plug, if they were to take down any of the $21 trillion, even a little bit . . . it would begin to create a major rupture in the financial system.  This is why I say the central banks are the market.  Without them, the markets would be nowhere near these highs. If they pulled their help and subsidies, the market would plummet really quickly.”  

Prins admits this has gone on for longer than most believed possible, but says it can’t go on forever. How does it all end?  Prins, who was a former top Wall Street banker, says,

“We will eventually get a crash because, at some point, the amount of quantitative easing, or conjured money to buy assets out of the market to pump up the...financial system, will come to this head where even though these major central banks are continuing to dump money in. 

There will be ruptures at the bottom of the economy . . . even though they are borrowing cheap money, they just can’t make enough money to service very cheap debt.  Consumers, who are at all-time debt highs, don’t have enough to continue to service their debt.  When these things happen at the same time in terms of lack of payments, delinquencies and defaults, then money will be taken out of the stock markets to plug the gap, and then the stock market comes down.  It will start with debt disintegrating, defaulting or having delinquencies...

The behavior that happens after this is the seizure of credit and lack of confidence everywhere.  When the cracks start, they will get bigger and bigger faster, and that’s when we have a crash.”

Will the next crash be worse than the last one? Prins says, “Yes, it will because we will be falling from a higher height. 

...The idea here is you are sinking on the Titanic as opposed to sinking on a canoe somewhere.  All of this artificial conjured money is puffing up the system, along with money that is borrowed cheaply is also puffing up the system and creating asset bubbles everywhere. 

So, when things pop, there is more leakage to happen.  The air in all these bubbles has created larger bubbles than we have had before.”

How does the common man protect himself? Prins says,

They have to own things, and by that I mean real assets, hard assets like silver and gold.  That’s not as liquid, so taking cash out of banks and sort of keeping it in real things and keeping it on site . . . keeping cash physically.  You need to extract it from the system because the reality is when a financial crisis happens, banks close their doors to depositors. . . . Also, basically try to decrease your debt.

Join Greg Hunter as he goes One-on-One with two-time, best-selling author Nomi Prins, who just released “Collusion: How Central Bankers Rigged The World.”

Comments

Endgame Napoleon earleflorida Sun, 05/06/2018 - 19:22 Permalink

When the crash happens, I wonder what will happen to people holding a lot of debt?

She says the big crash will start with an avalanche of delinquencies & defaults, prompting people to take money away from stocks? 

Does she mean retail investors, removing their investment money from the stock market due to fear or due to trying to cover their own daily bills in a worsening economy? 

Or does she mean the Fed and / or big government, intervening to artificially stop the crash through manipulating the stock market? 

When the stock market plunged a few months ago, the Fedsters left a numerical hint that they control the stock market, not just the banks. 

In reply to by earleflorida

44magnum Endgame Napoleon Sun, 05/06/2018 - 20:06 Permalink

"I wonder what will happen to people holding a lot of debt"

The banks will own whatever they have just like they own the USA(in their back pocket),we did go tits up in the 30's. They caused the 2008 crash and ended up bailed out and took over a lot of real estate.  

Thomas Jefferson:

“The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered.”

In reply to by Endgame Napoleon

ElTerco Endgame Napoleon Sun, 05/06/2018 - 22:15 Permalink

"Does she mean retail investors, removing their investment money from the stock market due to fear or due to trying to cover their own daily bills in a worsening economy?"

Think margin calls, where the brokerage starts liquidating stock for you at market prices whether you like it or not. This becomes a snowball on the way down.

There is currently $645 billion in margin debt, and stock prices are set by the ratio of sellers to buyers, not in terms of "store of wealth". In other words, look out below if that margin debt clears over a period of three or four days.

Welcome, millennials, to the *real* stock market.

In reply to by Endgame Napoleon

Slomotrainwreck Endgame Napoleon Mon, 05/07/2018 - 14:46 Permalink

Prins admits this has gone on for longer than most believed possible, but says it can’t go on forever. "How does it all end?" 

Actually it will end as soon as all history is deleted from the HTML System of archives and be replaced with the "New Official Gubmint/Microsoft/Apple dedicated computer browser". At which point all of us will officially be slaves to the omnipotent. Sorry open source alternatives, your hacking will be punishable by obsoleting you. No way out. Kiss your oldies goodbye.

In reply to by Endgame Napoleon

Crazy Or Not LetThemEatRand Sun, 05/06/2018 - 19:26 Permalink

Decades ago CIA ran "Air America" (today Silk Airways) drug/arms cargo to covertly fuel shadow spook actions. (Gladio etc)
To think that such an organisation would pass up the benefits of Crypo to fund similar goals is naive beyond belief and akin to ignoring how the Clintons came to power and what forces keep them safely beyond reach.
Make money on Crpto by all means just realize whose yard you play in.

In reply to by LetThemEatRand

Kidbuck Sun, 05/06/2018 - 19:09 Permalink

If you own silver and gold or are in a position to you are not a common man. You are doing better than half of the peons in the United States that don't have enough set aside for their next haircut. For the majority of Americans the crash began years ago.

Endgame Napoleon Bigly Sun, 05/06/2018 - 19:34 Permalink

Gold is worth more, but it seems like silver would be more fluid, like the way the market is bigger for a small, affordable house than a mansion in a depression. In the Great Depression, the richest people in the country could not sell some of finest homes ever built. Some were donated to the public for that reason. I guess gold would always be liquid. It does not matter to most of us, however. What little gold jewelry many women had was sold for a pittance when silver & platinum became more trendy. Many gold buyers took advantage of this trend.

In reply to by Bigly

HRH of Aquitaine 2.0 Bigly Sun, 05/06/2018 - 21:13 Permalink

I have a hand truck in the garage. But one monster box easily fits into a heavy-duty nylon duffel bag with handles. I normally don't pick up my whole stash at one time. Mini-monster boxes of Kangaroos are 250-oz's FYI. RCM 100 oz. bars weigh a little more than a 5-lb. bag of sugar. The day you can't pick up a bag of sugar is the day you have bigger problems than PMs.

In reply to by Bigly

HRH of Aquitaine 2.0 GotAFriendInBen Sun, 05/06/2018 - 19:19 Permalink

Botox. It freezes the muscles around their eyes and forehead and only the nose and cheek muscles work. Laura Ingraham did the same thing to her face. To not get crows feet all they had to do was wear sunglasses and stay out of the sun.

Heck you can get OTC retinol products now that are very effective. (Peter Thomas Roth makes some amazing OTC retinol. I can put it on and wake up without my eyes watering all night long. It doesn't cause burning or redness, either. That's impressive).

In reply to by GotAFriendInBen

Endgame Napoleon HRH of Aquitaine 2.0 Sun, 05/06/2018 - 19:50 Permalink

Some people just age more slowly. She has good articles, actually. If I had book-buying money, I would probably buy the eBooks of several economists on here and a few others. Some people are good at explaining financial concepts in an understandable way. She is one of them.

I don’t agree with all of the people who focus on monetary policy, but then again, I don’t understand much about it. I see it a little more after reading this blog.

I still think wages have more to do with economic blight than anything else, but wage growth may be hampered by the money supply as well. When the dollar is worth less, employers pursestrings may tighten.

A couple of days ago, Tyler had an article saying the hours worked are up a bit. Since wage growth is so anemic that it does not even matter to the ordinary person, that is about the only decent thing I have heard.

It is not just wages; it is the fact that so many jobs are temporary and part-time. That makes it impossible to do anything. You cannot plan, not even by reducing your expenses to spartan levels in order to afford an apartment.

In reply to by HRH of Aquitaine 2.0

HRH of Aquitaine 2.0 Endgame Napoleon Sun, 05/06/2018 - 20:51 Permalink

"If I had book-buying money, I would probably buy the eBooks of several economists on here and a few others."

The local library is FREE. Tax mules, like me, pay property taxes so everyone (in the US) has access to books, for FREE (not FREE for me, the payee of property taxes, but FREE for you the user of the local library). If your library doesn't have the book you want you can put in an interlibrary loan. But that requires that you get off your fat ass and hoof it down the library and put in a request. And if you are too fat and too disabled to walk to the library you can call Dial-A-Ride and get a nearly-FREE ride in your electric wheelchair (also funded by tax mules like me).

You're welcome. Will you say thank you? No. Gratitude isn't taught to people like you. The only thing you are taught is to be an ingrate and to envy those who have worked harder, and smarter, than you. What we provide for you will never be enough.

When you work for something, you appreciate it. When you are handed something, for FREE, you do not. So either earn money by doing something people value or call the local short bus provider to take you to the FREE public library. Heck, you seem to have some type of Internet service (probably provided for FREE by your local housing authority). If you had any intelligence at all I am guessing you could figure out a way to read those books for FREE on the Internet.

I understand. Whinging is so much easier than working hard and adopting an attitude of gratitude.

In reply to by Endgame Napoleon

HRH of Aquitaine 2.0 RafterManFMJ Mon, 05/07/2018 - 00:25 Permalink

Fuck off dickhead. I am sick and tired of enabling other people to live at my expense. That stupid cunt should be happy that people like me pay property taxes and provide free books, and staff, to help them read and find free books.

If it was up to me people would have to buy their own fucking books or pay me to have access to my private library.

Those government tit suckers, like you and EN, should be scared. Because when taxpayers like me go Galt, that means your supply will be cut off. I can't wait until you fuckers wake up and realize the free $hit is gone. No more. Empty cupboards. Work or starve. And when fucktards like you and EN show up with some fucking sob story, I will give my own massive sob story back to you. Hours and hours and hours. And after you have waited, for hours, to find out if will give you a job, I will laugh when I tell you another long long long sob story about how I have spent my last silver coins to help a few people to feed their families and I have no more silver to hire (losers like you).

In reply to by RafterManFMJ

Endgame Napoleon Archive_file Sun, 05/06/2018 - 21:18 Permalink

Good luck. I do not trust the Swampers, but I fear them less than the leadership in a country without a long-standing, constitutional system of law. You are right about the surveillance state. But while the Indonesian government might have less technologically advanced means of oppression, the rulers probably lack restraining, constitutional traditions. I would just visit, collecting rent from a distance, if I were you. 

In reply to by Archive_file

turkey george palmer Sun, 05/06/2018 - 19:29 Permalink

People at work are saying now is time to get credit cards and spend to the limit because we are all going to be bankrupt anyway so might as well load up now.

Dumb idea but what's the difference in logic between that and what the fed does? Aside from the fact that the fed doesn't pay anything for money but we all have to slave away for it.

Endgame Napoleon turkey george palmer Sun, 05/06/2018 - 19:57 Permalink

If people do that, the whole economy will go down. They will crack down on that. This article said it is better not to hold debt in a crash, likely because they’ll take it out on the ordinary person. Remember: In America, only the top 20% and illegal aliens are above the law. It is probably not everyone in the top 20%, either, but just most of the 1%ers and their servants. 

In reply to by turkey george palmer

pliny the longer HRH of Aquitaine 2.0 Sun, 05/06/2018 - 21:17 Permalink

HR you speak as if it matters.  what if u F the system? what if you don't care about the vaunted bankers credit score?  what if  you just walk away?  sure you won't 'own' a house in 10 years, there are those see that which is clearly visible. who cares?  do u own it in the next 30 years anyway?  what a joke.  F the system, the status quo. I don't like it, but i can't blame them.  the world is changing my friend.

In reply to by HRH of Aquitaine 2.0