The banksters’ Negative Interest Rate Policy (NIRP) appears to have quietly put the IMF’s analysts in a Modified Stationary Panic. See this August 2016 IMF white paper: Negative Interest Rate Policy (NIRP):Implications for Monetary Transmission and Bank Profitability in the Euro Area. Buried in the report is this little zinger; “Early evidence suggests that the adverse impact of negative rates on bank profitability may increase non-linearly as the policy rate declines further.” We are headed for some interesting times, folks! The Deutsche Bank death spiral may be just the beginning of a full-blown, widespread debt crisis contagion.
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UN fears third leg of the global financial crisis – with prospect of epic debt defaults. JWR’s Comment: The banksters have backed themselves into a corner, by getting themselves so highly leveraged at the same time that NIRP is expanding and while they have so many “under performing” (read: bad) loans in their portfolios, particularly in Europe’s southern tier and in mainland China. Given the over-leverage of the banks, it won’t take much of an event to reach a tipping point. Then we will see a cascade of events that will make the 2008 debt crisis look small, mild, and brief, by comparison.