Friday, April 15, 2016

Will The Federal Reserve Now Bailout Europe?
The Daily Bell essay suggests the many meetings this past week between the Federal Reserve & the U.S. Administration are discussions relating the stability of the global financial system, especially in a U.S. Presidential election year .. "The banking system around the world is extremely fragile and securing credible and calm markets make take considerable doing .. Throughout Europe, the banking sector is in critical shape – and Japan too. The ratio of performing to non-performing loans is critically low. But perhaps the most concerning area is Germany where the Deutsche Bank – of all banks – is said to be in critical condition. In fact, some alternative media reports regarding the meeting between Obama, Biden and Yellen involved a possible discussion of Deutsche Bank’s solvency .. Is it possible that part of the recent discussions in DC focused on Fed involvement of additional purchases of Deutsche Bank non-performing assets .. The Fed is supposed to tend to U.S. solvency. But during the 2008 crisis, Ben Bernanke reportedly extended trillions in overnight loans to banks around the world, and many of those loans still may not have been paid back .. But what if the Fed has now agreed to 'backstop' Deutsche Bank loans? Deutsche Bank is a critical bank, perhaps the most critical in all of Europe. Bank insolvency in Italy would already be a disaster, but a declaration of insolvency by Deutsche Bank would be unimaginably worse. And so, perhaps, it is possible that the Fed will ensure, or help ensure, the solvency of Deutsche Bank. And this of course brings up a larger question – which is whether the Fed is now to do the same sort of thing in Italy, Greece, Ireland and elsewhere where banks are facing critical shortfalls .. Was this what was discussed by Obama, Biden and Yellen? Is it the reason, among others, that International Monetary Fund and World Bank Officials are filing through the White House this week? Has it been decided that because the ECB cannot provide the appropriate liquidity for Europe that the U.S. Fed will do so instead?" .. if this is the case, the U.S. government & Federal Reserve could be in for backstopping the global financial system, which means massive money printing & a lot more U.S. debt coming .. the essay suggests this could turn into a 1970s style stagflationary environment.
LINK HERE to the essay

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