JWR’s Introductory Note: Today, in lieu of our regular bi-weekly Economics and Investing column, I’m presenting an update to an article that I wrote for SurvivalBlog, back in June of 2012, titled: 20 Reasons Why America’s Next Bank Holiday Will Be a Nightmare.
If anyone compares this with the original edition, you will see that I’m standing by the majority of my 2012 predictions and recommendations. If anything, nine years later, the threats that we’d face in a banking crisis will be even greater, because of increased reliance on electronic payment systems, power grid reliance, Internet reliance, and the larger scale of the tech-based economy.
I should mention that one of the key metrics that I cited was Money Zero Maturity (MZM) money supply. Back in 2012 it was around $7 trillion. It has now more than tripled, to more than $22 Trillion. Humpty Dumpty is now headed for a much bigger fall — that is, one that will not just devastate the financial markets and retail banking, but also the Dollar itself.
Here is the updated article:
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The world has returned to the brink of a global credit crisis that could be far worse than the tumultuous events of 2008-09 and 2012-13. The sovereign debt crisis of 2012-13 in the southern reaches of the Eurozone seemed to indicate that bank runs could escalate and spread in a global contagion. Thankfully, that crisis was stemmed. But with interest rates now rising, I can see that a similar situation may return. The recent collapse of Germany’s Greensill Capital is troubling. Though European banking managers and regulators are calling the Greensill collapse “contained”, it is having far-reaching consequences. Mark my words; Greensill may not have been just an isolated glitch.
Interest rates have been kept artificially low since 2007. What we are witnessing now (in early 2021) is an understandable rebound. Some analysts suggest that it might herald a repeat of the 1945-to-1981 interest rate wave. That wave was triggered by currencies and banking detaching themselves from precious metals. (First silver, and then gold.) The 1971 to 1981 period, in particular, was quite traumatic. A similar, but a probably much smaller wave of interest rate hikes will be triggered by global financial markets detaching themselves from the U.S. Dollar as a reserve currency, and adopting sovereign digital currencies.Continue reading“20 Reasons Why America’s Next Bank Holiday Will Be a Nightmare (Updated)”
