Are you reading articles that are saying the Central Banks have exceeded their mandate with ZIRP, NIRP, QE, endles Bond Buying programs, purchasing Stock Futures , and maintaining endless Dollar Swap back door funding worldwide. Well if you live in my pathetic world you've probably noticed these articles abound recently. Not only do they now say the Central Banks have crossed the line but they are boxed into a corner and have NO ammunition.
I think what caught my attention was the attitude there was NO fire that needed these extraordinary measures and their manipulations of all of these markets amounted to only a bunch of Central Bankers dealing crack cocaine to the Wall Street addicts. Maybe so, but what I worry about is that may be over-simplifying the problem. You see......I think the fire is right in front of you and because we crossed the point of no return years ago, the bankers actually have no choice now. The idea of extend and pretend is much more important than many of us want to really believe it is.
So what is the fire? Its the system. The system you say? That's rather nebulous Kliguy. I've heard that before, right? Let's distill this to just SOME of the aspects of "the system". The "system" is composed of many parts. Hundreds of parts. Some of these parts are more critical than others but nevertheless all of these parts are important, at least to the "people" dependent upon these "parts".
Here is a part that I would say is "important". YOUR pension. Literally tens of millions of pensions.....virtually ALL PENSIONS...are dependent upon this "system" staying intact. You recently saw the collapse of the Central States Fund collapse with over 400,000 people in the Midwest impacted by a 40% reduction in their monthly checks and that is just the beginning. CSF is only a beta test. They picked a relatively medium sized pension in the Midwest to test, but they will be rolling this out Nationwide in a year or two....maybe sooner. This is a private pension fund holder. Let's look at the State pensioners and the large School teachers funds and municipality pensioners. They ALL depend upon the Market price and the BOND prices with Zero Interest rates. You get even a whiff of real inflation (greater than 3%) with elevating Bond prices and this DEBT HOUSE OF CARDS will run for the leveraged back door so fast your head will spin. NO ONE WILL GET OUT THAT DOOR .......NO ONE!! Even if you get out that door, you'll be slaughtered by the crowd behind you with NOTHING in their hands but pitchforks.
Egon Von Greyerz:
I really didn't even touch on the DOLLAR as the world's reserve currency. That "part" is too difficult for the average peep to grasp. They don't even want to think that is possible to take down....but they will. Its days are numbered and when that "whiff" of inflation hits, you can damn well bet it will because the Central Banks have said they need it and they WILL GET IT. They're not gonna like what comes next. Gl