25 bps. That was how small the proposed and forecasted rate hike was supposed to be last Thursday. Yet when the Federal Reserve chose to keep interest rates where they were, it signaled something much greater and much more terrifying... the beginning of the end of the current system is now commencing. Now, many will of course respond with thoughts that this statement is just more hyperbole, and economic doom porn, but with the rest of the world already in a deflationary recession, and under the auspices of a currency war that has gone on for at least four years, the stability of the global financial system is too far gone to ever see a change to central bank policies that are willing to use Quantitative Easing to prop up every asset in nearly every market for eternity.
Bank of Japan: New round of QE scheduled for October
Last night on CNBC, talk has already begun for Japan to institute a new round of QE that will be scheduled for October in another attempt to stimulate inflation under Abenomics. However, since the BOJ has already purchased close to 70% of their entire stock market, and nearly every bond available at the cost of hundreds of trillions of Yen, this measure will not only have a hard time finding new assets to buy, but will inevitably bring about the trigger that finally destroys what is left of their economy.
Even Domestic U.S. banks know the end of the dollar is coming
Major banks in the West are not stupid... they may be utterly corrupt, but they nearly always have a contingency plan to protect themselves from catastrophic events. And whether its through the owning of politicians and regulators, the backstopping of their risk onto the taxpayers, or as we have seen in just the past few months, the accumulation of physical metals after years of keeping down spot prices, banks, like the market, are forward looking in their actions.
Back in August we began to see major banks like Goldman Sachs and HSBC purchase a combined 7.1tons of gold, while at the same time J.P. Morgan was buying millions of ounces of silver. And because of this drain we are now seeing paper contracts outnumber physical inventories by more than 250:1.
The reasons are simple for banks who have used their sycophants in the media to downplay gold and silver as relics and even 'pet rocks' while covertly accumulating every single possible ounce they can get their hands on. The dollar is soon to disappear and the world is returning to a state where those who have the gold will reign in the new system.
Bank of England calls for negative rates, and an end to cash
Just one day after the Fed announced no change to ZIRP, the Bank of England came out and doubled down on this move by calling for negative interest rates and a proposal to end cash in the economy. This was not some knee jerk reaction by the BOE to the U.S. central bank's decision to do nothing, but a calculated move that could only have been planned with considerations made from the Fed, and with the Brits already knowing what the Fed's policy was going to be.
Australia and ECB call for Helicopter money printing
Britain was not alone in being quick to call for more of the same, and in much greater quantities. On the same day the BOE was dropping hints of negative interest rates, both Australia and the ECB began talking about new Quantitative Easing programs that would dwarf what has already been done in most Western economies, and could even include pumping liquidity directly into the general economy.
There is not a single central bank that is not manipulating their currency, or printing vast sums of fiat money in an attempt to delay and stave off what is coming to the global financial system. And as we have talked about in the past, five years of unsterilized debt pumped into the machine has long reached the point of diminishing returns, with estimates of 14 new dollars of printed money being required to create just 1 dollar of GDP growth.
They say that insanity is doing the same things over and over and expecting a different result, and if that is the case, then those who run the global banking system are the most psychopathic and insane men and women the world has ever seen. Yet for all they are doing to make things worse by increasing QE and lowering interest rates to the point where no one should keep any cash in a bank, behind the scenes they have accepted the fact that the jig is up, and are simply keeping up the facade of monetary policy to the public knowing that this is the end game, and most people aren't going to survive it.