Dangerous Side Effects of Ultra-Easy Money

peaceandlove · 10-31-2009, 12:57 AM

SOURCE: G. Edward Griffins website: http://www.realityzone.com/currentperiod.html
Here is a perceptive analysis of the current monetary crisis and what lies ahead in terms of Dollar value, gold price, oil price, and commodities. Plenty of charts but not overly technical. You should know this.
SafeHaven 2009 Oct 29 (Posted)

October 29, 2009

Dangerous Side Effects of Ultra-Easy Money
by Gary Dorsch

Operating under the elixir of ultra-low interest rates, and flush with trillions of fiat currency at their disposal, courtesy of the world's top-20 central banks, hedge funds and banking Oligarchs are once again making risky and daring bets in commodities, emerging markets, junk bonds, and blue-chip stocks, defying gravity with trades that would have been un-thinkable just six-months ago.

In order to engineer a 180-degree turnaround in trader psychology, from the chronic fear of meltdowns last year, to the opposite side of the spectrum - the euphoric illusions of V-shaped recoveries, the "Group-of-20" have committed $12-trillion of taxpayer money, equivalent to a fifth of the entire globe's annual economic output. The G-20's largesse has been used to fund capital injections into banks, soaking-up toxic assets, guaranteeing financial company debt, and flooding the world credit and stock markets with ultra-cheap liquidity.

On Sept 20th, the G-20 nations, which account for 90% of the world's output, agreed it was too soon to begin withdrawing the $5-trillion of surplus cash that's been injected into world money markets. The IMF estimates that banks in Britain, the Euro-zone, and the United States have recognized slightly less than half of the $3.4-trillion of bad loans sitting on their books, and are still struggling to absorb heavy losses primarily from failing US mortgage loans.

The G-20 says its drawn-up plans for coordinated exit strategies that would drain trillions of dollars of liquidity, such measures are still seen unlikely until sometime next year. On Sept 25th, US Treasury chief Timothy Geithner noted that although the global economy has pulled back "from the edge of abyss" and was showing early signs of resuming growth, it's too early to let-up on the monetary accelerator. "We still have a very long way to go," he said.

Continues: http://www.safehaven.com/showarticle.cfm?id=14869&pv=1

10-31-2009, 12:57 AM	#1
peaceandlove Avalon Senior Member Join Date: Sep 2008 Location: Turtle Island Posts: 2,776	Dangerous Side Effects of Ultra-Easy Money SOURCE: G. Edward Griffins website: http://www.realityzone.com/currentperiod.html Here is a perceptive analysis of the current monetary crisis and what lies ahead in terms of Dollar value, gold price, oil price, and commodities. Plenty of charts but not overly technical. You should know this. SafeHaven 2009 Oct 29 (Posted) October 29, 2009 Dangerous Side Effects of Ultra-Easy Money by Gary Dorsch Operating under the elixir of ultra-low interest rates, and flush with trillions of fiat currency at their disposal, courtesy of the world's top-20 central banks, hedge funds and banking Oligarchs are once again making risky and daring bets in commodities, emerging markets, junk bonds, and blue-chip stocks, defying gravity with trades that would have been un-thinkable just six-months ago. In order to engineer a 180-degree turnaround in trader psychology, from the chronic fear of meltdowns last year, to the opposite side of the spectrum - the euphoric illusions of V-shaped recoveries, the "Group-of-20" have committed $12-trillion of taxpayer money, equivalent to a fifth of the entire globe's annual economic output. The G-20's largesse has been used to fund capital injections into banks, soaking-up toxic assets, guaranteeing financial company debt, and flooding the world credit and stock markets with ultra-cheap liquidity. On Sept 20th, the G-20 nations, which account for 90% of the world's output, agreed it was too soon to begin withdrawing the $5-trillion of surplus cash that's been injected into world money markets. The IMF estimates that banks in Britain, the Euro-zone, and the United States have recognized slightly less than half of the $3.4-trillion of bad loans sitting on their books, and are still struggling to absorb heavy losses primarily from failing US mortgage loans. The G-20 says its drawn-up plans for coordinated exit strategies that would drain trillions of dollars of liquidity, such measures are still seen unlikely until sometime next year. On Sept 25th, US Treasury chief Timothy Geithner noted that although the global economy has pulled back "from the edge of abyss" and was showing early signs of resuming growth, it's too early to let-up on the monetary accelerator. "We still have a very long way to go," he said. Continues: http://www.safehaven.com/showarticle.cfm?id=14869&pv=1