Loading ...gold opens down-just a few-4-6-9 bucks– and PM stocks open down another 2-4-6 percent Monday–that should do it…then a recovery and a solid upday and week.
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To date, the central banks have gotten away with their easy money policies because they could. The day of reckoning could always be pushed further out via a fresh round of liquidity. But, as Brien Lundin says in the video below, the reckoning is “no longer simply inevitable, it is imminent. We are reaching the End of the Road.”
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The Fed and its central banking brethren are now hostage to rock-bottom interest rates. They can’t raise them, less they asphyxiate the remaining shreds of GDP growth around the world. Especially now, when so much of the global economy is fast sliding into recession. Rate hikes at this point would simply crash the system.
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So we can expect more unnatural and desperate measures from here. Fed rate cuts while the stock market is at all-time highs and employment at all-time lows? Sure. Negative interest rates on high yield (i.e. junk) bonds? It’s already happening in Europe.
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But we shouldn’t expect these to work. The system has reached a point of debt exhaustion where each new $trillion stimulates much more weakly than the previous one, and causes the system to become exponentially more unstable.