Central Banks Prepare For A Slow Down In The Economy; But The Fed Can’t Fix This Crisis

by | Mar 20, 2019 | Headline News | 18 comments

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    Big banks in the United States are quietly making plans to protect themselves from a slowing domestic economy.  While the market increasingly shows signs of fatigue and strain, many governments and central banks are taking steps to minimize their losses.

    Many are feeling the pinch in the economy, as evidenced by the “retail apocalypse” and the shakiness in the stock market. According to The Street, agencies around the world are cautioning on slower growth that could lead to an inevitable downturn or, at worst, global economic recession. But these preparations won’t stop faith in central banking and governments to fail.

    Every economic-financial crisis can be fixed by creating trillions out of thin air, except the one we’re entering – the exhaustion of credit. Central banks, like generals, always prepare to fight the last war and believe their preparation ensures their victory. –Charles Hugh Smith via Seeking Alpha

    Banks seem to know what’s coming, but the one thing the Federal Reserve is incapable of doing is fixing the credit exhaustion.

    The elixir of new central bank money isn’t working as intended, and this failure is now eroding trust in the central bank’s fixes. Central banks can issue new credit to the private sector and it can buy bonds, empty flats and mortgages, but no central bank can force over-indebted borrowers to borrow more or force wary lenders to lend to uncreditworthy borrowers.

    Let’s be honest: the entire global “recovery” since 2009 has been fueled by soaring debt. The output of more debt is declining, that is, every additional dollar of debt is no longer generating much in the way of positive returns. As with any stimulant, increasing the stimulant leads to diminishing returns. Charles Hugh Smith via Seeking Alpha

    Morgan Stanley thinks there’s a 15% chance of recession in 2019, with the odds rising to 30% in 2020. “They’re not predicting a recession, but they’re preparing for one,” said Curran, a global corporate bond fund manager at Aberdeen Standard Investments, in a recent interview with TheStreet shortly after meeting with executives at JPMorgan Chase & Co.

    Banks are actively “de-risking their mortgage businesses” by lending less to home buyers, and they’ve “backed off in auto lending”, Curran said, through a series of moves he describes as “surgical pullbacks” in the event of a downturn.

    If central banks and governments are preparing for a recession, isn’t it safe to say that you should be too?


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      1. China and India are buying gold at alarming rates. What do they know that we don’t?

        • They know our so called leaders are fools that print fiat money backed by nothing. Just read that massive amounts of palladium is being bought up by Russia.

        • That they see better than us ’round eyes’

          • Know what I hate? I hate it when going to the bank where I had to deposit large check, and then later going back in and taking our like $5K and standing at the counter with 20 people in line behind me, and the witch behind the counter is practically yelling out the numbers as she is counting out all the hundreds. Like I now have to walk out of the F-n bank with $5K cash, and everybody inside knows what I withdrew. F-n Bch tellers. Like she is counting out hundreds like in a casino where everything is on camera all layed out on the counter.

        • The general consensus is that the amount of all the mined gold that exists in the entire world would make up a cube ~20 meters on a side and would be worth less than a Trillion dollars in todays prices.
          The world’s 7th largest economy, India has a yearly GDP of ~2.8 Trillion, thinking everyone will go to the Gold standard is shitting Skittles.
          I have said time and time again money is not wealth, but is a means to transfer it. Wealth is ownership/control of tangible resources.

      2. The world is preparing for the end of the worlds reserve fiat currency (called the dollar). Once the final bilge pump thats been slowing down the rate of sinking locks up (credit)…it’s game over for America. The result will be depression and civil war.!!!!

      3. This is my work so I will lay out the play out. When The engineered crisis in 2007/2008 hit, it was about one thing: control. Just as with the Vietnam War, the combination of the War on Terrror and the epic global expansion of finance after Clinton deregulated at the end of the 1990s, had to be resolved somehow. Excesses built up in derivatives and rising asset valuations during the tech and housing bubbles needed to be sent upwards into the pockets of the elite.

        The crash did this very well, getting the government to print money and send it to the rich, while in turn making the rich whole again after their bad bets in the first phase of deregulation.

        The situation right now is thus: the rich are totally fine and have insane amounts of wealth. They are in the super controller cat bird seat with their favourite douche bag President in power. The Chinese are now in massive debt.

        So what happens next? I personally think war because I do not think they want to share that wealth with a guaranteed universal income or any of the other ideas to spread the wealth.

        I have had real power in my life and it is not only really fun and intoxicating, with all the women you could want all the time, you also never want to willingly give it up. So the elite are not going to give it up. But they do need to direct the anger and resentment somewhere and that is war.

        • Spot on Frank Thoughts, “I personally think war because I do not think they want to share that wealth with a guaranteed universal income or any of the other ideas to spread the wealth”. Although a deadly pandemic would leave assets intact. Anyway, I don’t think these narcissists are big on sharing.

          I know that I feel like a Turkey the day before Thanksgiving!

      4. We live in a ponzi scheme. The government can’t shut the borders, they know the entire economy is based on growth. Population growth. And since they destroyed the family culture in the US, they have to import bodies. They can’t pay off the debt. The economy they created is based on debt growth. They went off the gold standard because they knew they would have to spend more every year to pay for the growth of the empire. Without the gold standard they could print forever, or until it becomes worthless. The end is predetermined. The time is yet to be determined. Or at least, they ain’t saying.

      5. The economy will keep going strong through November 2020. At that time the most significant change will be that Americans at large will understand that the Democrats just stole the presidency through FRAUD. A Tax Revolt will occur at that time, because it will be the only way left to fight back without going to war. The reduction in tax revenues, along with the Democrats reversing most of DJT policies, will cause the deficit to skyrocket, stock market will fail, gold and silver will soar, because printing fiat dollars will no longer be able to save anyone. Get prepared now!

        • Tax Revolt? the federal government doesn’t need a red cent of taxes to operate. The amount of federal taxes collected cannot even pay the interest on the national debt. The USA government operates on debt. As long as the USA military can continue to enforce the use of the Petro Dollar and the fed can create digital dollars out of thin air. the federal government is funded. A Tax revolt will do as much good as pissing into the wind. And its digital dollars. not actual physical printed cash. The mint only makes at largest the $100 bill. and paper money wears out and for every truckload the mint prints a truck load is incenerated. No body will have wheelbarrows full of worthless cash dollars.

      6. It will slow down then it will speed up. it does this all the time. So what the big deal???

      7. Redfordead, a tax Revolt is not “the only way left to fight back without going to war”. I know 3 highly eduma-cated and successful people that discovered who “John Galt is?”. Although when I person greatly reduces their income you could argue that this act is a “Tax Revolt” because “they” pay much, much, less in taxes.

        I would have said a person was crazy if they thought that any one of these three people would choose to just quit. Instead of being “productive” that they would decide that they had enough and live a reduced lifestyle.

        • Justice,
          I retired in the year I turned 55. My income became fixed and was 45% of what I was earning the year prior to when I retired. My taxes really dropped. In fact today I make in interest on Tbills an amount equal to what my federal taxes are, so essentially I’m not contributing anything to the Federal government in income taxes. Whoo Hoo!
          I just quit! I still pay state taxes property, sales, fees, et al, but net income to the Feds is ~$0. All legal under present laws.
          I’m not rich, nor am I poor, I just prepared as best as I could through life.

          • rellik

            Now just keep that going by staying alive on retirement for as many years as you worked for wages and you win in the game of life. If you physically do not have to work for wages and your needs are met your comfortable; add in some luxuries and your rich. It’s now just a measure of how rich.

      8. The facts revealed by the Cohen testimony says Trump greatly lowered the value of his holdings when taxes become due while escalating the value when seeking loans. This is apparently ok as a regular matter of procedure and another day at the office for the criminals calling the shots.

      9. Do you know how these central banks are taking measures to protect themselves???????
        Do you think they know something??????
        You bet your sweet bippy.

      10. The banks know what is coming because they set up the whole collapse. And they are going to steal a boat load of money. Same cartel that has caused every crash, every recession,to steal a ton of cash.

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