As central bankers have successfully showcased its ways of producing monetary fraud by suppressing interest rates to erode peoples savings and printing money at unprecedented speed to buy assets to create artificial wealth effects, it seems too late for the economy to ever kick back to a traditional fashion of natural price discovery and a thriving middle class.
Today, as this remarkable chart shows from Citi, central banks around the world own a grand total of $21 trillion dollars worth of assets and rising. The big six central banks now own 40% of global GDP, which is more than double the 17% they held before the financial crisis.
With prolonged zero interest rates, the middle class is on the verge of going extinct with unprecedented debt levels that is rippling throughout American households. As Deutsche Bank economist Torsten Slok recently noted:
- The percentage of families with more debt than savings is higher now than at any point since 1962
- The median American family’s net worth is lower than it’s been in nearly a quarter-century
So as these Ph.D. economists at the Federal Reserve continue to proclaim that their draconian monetary policies have worked brilliantly since 2008, it’s important to remember that the middle class has been pushed aside to stuff Wall Street’s pockets by forcing more capital to bid up assets as they chase yield while for the most part:
- Household wealth has shrank
- Middle-class debt has soared
- Wages have stagnated
- Asset inflation has boomed
With the phenomena of negative interest rates taking hold this past decade, which is pure monetary insanity it’s quite clear that the United States is going down that path. As zerohedge pointed out, Fed president (San Francisco) John Williams said that to fight the next recession, global central banks will have to come up with a whole new toolkit of solutions.
Alongside negative interest rates, will the Federal Reserve take a page from the Swiss National Bank’s playbook by purchasing equities? Well if they need to retool the toolkit that certainly looks to be another viable option as quantitative easing has turned out to be a bandage maneuver.
It’s evident that central banks know that they will have no choice with regards to pursuing negative interest rates in the next recession which could explain why we see so much propaganda within the mainstream media of why eliminating cash will serve as such a positive for society when it comes to fighting the underground world. In reality, the war on cash has a much more significant agenda, as it forces all citizens to the banking sector to trade cash in for bank deposits.
Yes, after the financial meltdown of 2008 this continuous war on cash will make the big banks even bigger and centralize money even further. This serves as a huge bonus for central bankers as it eliminates bank runs and allows the seamless transition to implementing NIRP.
The 2008 financial crisis, explained: pic.twitter.com/K20TUazIS3
— Gold Telegraph (@GoldTelegraph_) May 2, 2018
We truly live in an unprecedented era of academic hubris.