Central Banks Locked and Loaded
June 15th, 2012Warning: This is not a recommendation to buy, sell or hold any financial instrument.
People are emailing me about other sites that are going full freakout with advice to empty bank accounts and activate doomsteads, etc. and why am I not freaking out, running for the hills, etc.
Ok, first of all, I “ran for the hills” back in 2006, and it has been quite nice out here, thanks. Second, if this Eurozone situation genuinely goes sideways, recall the vocabulary lesson from 2008 where we learned about the term, “unlimited” as it relates to the totally bogus financial system:
The U.S. Federal Reserve led an unprecedented push by central banks to flood financial markets with dollars, backing up government efforts to restore confidence in the banking system. The ECB, the Bank of England and the Swiss central bank will offer unlimited dollar funds in auctions with maturities of seven days, 28 days and 84 days at a fixed interest rate, the Washington-based Fed said today. The Bank of Japan may introduce “similar measures.”
So, what’s the difference between 2008 and 2012?
About four years. That’s it. It’s called kick the can and it has been going on for decades. So, is Monday finally going to be it? The End. For reals?
While anything is possible, I seriously doubt it.
All collapse is local. If you’re reading from Greece, you know this. However, I don’t yet see this as a systemic threat. While I’m not saying that disorderly moves won’t happen, you need to understand that these central banks can and do collude when necessary. The Reuters piece below indicates that the same voodoo magic show, that we saw in 2008, is about to kick off again.
Now, I did make one small defensive play. I moved a large portion of our cash from a call account into a higher yielding term deposit account to lock in a higher rate for a year in case the RBNZ eases in the face of European chaos. But that’s it. I keep our savings mostly in cash and gold, with a small portion of the cash available for very speculative, short term equity plays that I don’t talk about much on here.
A far more disturbing prospect than some kind of financial stop event is that the grindhouse continues to operate, sucking up ever more of people’s assets and converting them into wars and technologies of political control. That’s my guess as to where we’re headed.
Via: Reuters:
Stocks jumped on Thursday after news major central banks are preparing coordinated action if the results of Greek elections this weekend lead to turmoil in financial markets.
The central banks from major economies will take steps to stabilize markets and prevent a credit squeeze if necessary, Group of 20 officials told Reuters.
The news late in the trading day invigorated a market that has been highly volatile this week, whip-sawed by concerns the ballot in Greece on Sunday may set the stage for the country’s exit from the euro zone.
excellent summary, K.
i was already laughing out loud before i got to your second para. then i laughed so hard it probably woke up the neighbours.
meanwhile, in govt we trust:
http://mainichi.jp/english/english/newsselect/news/20120614p2a00m0na010000c.html
(the URL will expire in a few weeks)
Hi Kevin,
Yes it does seem that the situation in the Eurozone is something that will be causing freakout shortly, and anon.
Thank you for your “grounded” comment. Wow, neet about you moving on re 2006. Funny how time flies by.
At this point in time, like you, I’ve moved funds under my control to the “g fund.”
At least 3,4, or 5 astrology websites I read describe the upcoming week (in a nutshell) as “something to cry about.”
But like you, I don’t think there is any reason to panic. Been there and done that. The only thing I could do now is find a better hole and dig it deeper.
@tochigi – I don’t have a lot of patience. I visualize a massive invasion of off-world beings coming down and encapsulating and/or taking the whole Fukashima thing off world. I have to dream. Have to. Otherwise will go insane watching Japan and the rest of the northern hemisphere dying, visa vie nuclear fallout drip, by drip, by drip.