The world economy is at risk of another financial meltdown, following the failure of governments and regulators to push through all the reforms needed to protect the system from reckless behaviour, the International Monetary Fund has warned.
With global debt levels well above those at the time of the last crash in 2008, the risk remains that unregulated parts of the financial system could trigger a global panic, the Washington-based lender of last resort said.
Much has been done to shore up the reserves of banks in the last 11 years and to put in place more rigorous oversight of the financial sector, but “risks tend to rise during good times, such as the current period of low interest rates and subdued volatility, and those risks can always migrate to new areas”, the IMF said, adding, “supervisors must remain vigilant to these unfolding events”.
The IMF said: “The sequence of aftershocks and policy responses that followed the Lehman bankruptcy has led to a world economy in which the median general government debt-GDP ratio stands at 52%, up from 36% before the crisis; central bank balance sheets, particularly in advanced economies, are several multiples of the size they were before the crisis; and emerging market and developing economies now account for 60% of global GDP in purchasing-power-parity terms – which compares with 44% in the decade before the crisis – reflecting, in part, a weak recovery in advanced economies.”
Like many institutions the IMF has warned that rising levels of inequality have a negative impact on investment and productivity as wealthier groups hoard funds rather than re-invest them in productive parts of the economy. Without a rise in investment economies remain vulnerable to financial stress.
The Fed said two things. First, it would no longer be producing the Total Debt charts and tables. Instead it would provide the data in other ways, leaving it to others to add up the totals themselves.
But it was the second thing the Fed quietly reported that was perhaps more disturbing. It said it had discovered that it had been underreporting how much debt was in America.
It discovered that its methodology excluded debt that America owed to itself. It wasn’t reporting money the government had borrowed from its pension plans. So total debt in America is actually $2.7 trillion higher than it was reporting! Total debt is $61.7 trillion, not $59.
Think about that. The premier financial authority in America was producing “total debt” tables that were short $2.7 trillion. That is not just embarrassing—that is credibility destroying.
And credibility is one of the most important things when it comes to maintaining confidence in a financial system balancing on the edge of the abyss.
Economic crisis is coming. Five thousand years of human history offers ample evidence.
“Even with the U.S. economy and the world economy in such a precarious state, hardly anyone seems concerned!” wrote Gerald Flurry earlier this year. “Americans know far more about the Super Bowl than about this super crisis threatening to destroy our financial system.”
You see immediately that it is hopeless. A super bank run by super economists? How long would it take for them to blow up the whole world’s financial system?
But don’t worry about it. The system will blow up anyway.
No paper-money system has ever survived a full credit cycle. Why not? Because paper money (a form of primitive, credit-backed money) is unlimited…and undisciplined. That – and not a lack of international monetary reform – is why there are so many bubbles now.
When interest rates are falling – often pushed by central banks to artificially low levels and held there for an extremely long time – credit expands and the burden of debt grows. That has been happening for the last three decades. And now, the entire economy depends on something that can’t possibly continue. Debt can’t grow forever.
As long as rates stay low, the system holds together. But as the quantity of debt increases, the quality of it decreases. Debtors’ balance sheets get weaker and weaker.
Eventually, the credit markets change direction. Rates start going up again. Then the weight of all that debt comes crashing down like an avalanche. And when it gets started, there is no stopping it.
A trillion seconds is 31,000 years , this means the Fed would have to print a dollar out of thin air “every second” for 651,000 years just to make up for the 21 Trillion dollars the Deep State stole from us . Before we can even think about beginning to print up the dollars necessary to take care of the rest of the quadrillion’s of dollars of debt these banksters have created (and recently passed a law putting all their derivative debt on the backs of the American taxpayers) . Let’s see . how many lifetimes of our children’s children children will it take to pay off that $21 trillion the Deep State stole . assuming a one-hundred year life span … it will only take 6,510 generations to pay off what was stolen . the children to come after that … can then begin paying back all the other quadrillions in debt!! The US Government pays $479 billion a year to service its debt. If interest rates were normal, the servicing cost would be over a trillion.
Corporate and government debt will be disappeared, but not consumer debt. The debt donkeys will be ridden until the day they collapse under the weight. The sheer demographics warn that more people will move into retirement, increasing expenditures at a faster pace than there are younger generations to compensate.
This means that expenditures will rise and revenues will decline. Even if we were talking about governments that actually did pay off debt, they would still not be able to do so once we pass 2020. We have gone past the point of no return. We now require structural change and FAST! As I have highlighted before , the dollar is dead.
The debt is over $21 trillion. Unfunded liability is over $82 trillion at our most conservative estimate and using basic maths, it can’t be paid back. This fact should be a humbling experience for many of the Trumptards, but it’s not. These delusional monkeys have the audacity to laugh at Venezuela, when Venezuela has printed less than $800 million, and got sodomized by the international markets for it. But Uncle Scam? Oh no! Different rules apply to this hombre. Approaching $75 trillion in several Q.E phases depending on your sources. In 2014 Janet Yellen revealed she had spent $4.5 trillion of the King Dollar, on a bond buying program me.
IE: Government has no money, it issues debt, the Central bank prints money and buys its own government debt. Corporations issue bonds, there are no sane buyers, the FED buys the bonds from printed money, no adverse market reaction to this money printing. Besides the debt in the US is NOT just public debt, there is far more private debt, which is an even larger noose as the rates are higher and they have not as many options to keep adding more without paying.
The total debt is probably about $73 trillion to $74 trillion , though in the Fed’s numbers the Social Security money owed is not counted in the Federal debt. The number they publish for total debt is about $68.6 trillion as of end of year 2017. This is up about $600 Billion in Q4 and $1 trillion in Q3, a ridiculous rate. The problem is once you increase the rate of borrowing the economy and markets adjust to the freshly printed and that becomes the new normal. Then if you try to reduce it you create a recession.
This is how Keynes works, used to be every decade the economy is stimulated by injecting liquidity to then be burned out later and a forced recession. All those time your life was fucked over as a recession hit was the Central Bank’s planned action to screw you over. we have wrecked debt which will lead to a wrecked financial system . where gold and silver will be the safest assets to have in your hands … store your gold where you can easily get your hands on it . but silver (not Bitcoin) will be what you want in your wallet to trade for goods when the power grid is shut down by the Deep State , and the internet goes dead, just like your cash in the bank will be useless during a Black Out. so will Bitcoin be useless … it matters not what your bank statement says you have in the closed Bank’s “secure vaults” nor what you have in your unavailable “secure Bitcoin wallet” .word to the wise put some “physical” precious metal in “your hands” now!
All you can do is make sure you’re not in the way!
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