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Policy Extremes Maintain Illusion of Stability – Charles Hugh Smith

Sunday, July 12, 2015 17:27

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(Before It's News)

TND Videocast Spotlight: Greg Hunter’s USAWatchdog.com

Financial writer and book author Charles Hugh Smith thinks the big unfolding trend is a global economy that is not being allowed to correct. Smith contends, “Interest rates should rise, and what we are seeing is financial repression. Instead of letting the market decide what the price of risk should be, central banks have pushed it to zero. . . . It doesn’t seem to be working. It’s not fixing what is broken, and that is the unfolding trend. All these things that central banks and authorities are doing are creating more problems.” Smith goes on to say, “There are so many vested interests in sustaining the illusion of stability. . . . The trend we are really describing here is the extremes of policy that are being done to maintain the surface illusion of stability are guaranteeing it is going to blow. . . . Once you have extremes, the risk and volatility rise and explode. That’s just the way systems work. That’s just what history shows us.”

The illusion is fading, and according to Smith, “As a result of this, people are losing faith in the system. They may not be able to put their finger on it, but they are feeling a rise in financial insecurity. Even people who work for state and local government whose pensions seem rock solid, even they’re worried. They understand they may not get their full pension because if this thing falls apart, all guarantees are off the table and the rules will change. . . . Look at recent history in Cyprus. The government will take whatever money you have in the bank to save the bank. In other words, it’s not really your money. It’s the banks’ money. The idea that it’s your money is another surface illusion.”

What is not an illusion is the extreme trouble many EU countries are in. Besides Greece, Spain and Italy are deep in debt. Smith contends, “Spain’s debt is a trillion euros. Italy is over a trillion euros in debt. We are talking fairly serious money here.”

Click here to read the rest of Greg Hunter’s write-up and to access the active comment section.

After the interview: OfTwoMinds.com has lots of free articles, and Smith’s writings are featured across the web. OfTwoMinds.com is ranked #8 on CNBC’s alternative financial news sites. Smith has written 15 books. Click here to go to Smith’s book buying page. Smith is also working on a new book titled“Welfare Doesn’t Work: Creating Jobs for All in the Age of Automation.” Smith says it will be released this fall.

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About Greg Hunter:

Mr. Hunter is the producer and creator of Greg Hunter’s USAWatchdog.com. The site’s slogan is “analyzing the news to give you a clear picture of what’s really going on.” The site will keep an eye on the government, your financial interests and cut through the media spin. Greg Hunter’s USAWatchdog.com is neither Democrat nor Republican, Liberal or Conservative. Before creating and producing the site, Greg spent nearly 9 years as a network and investigative correspondent. He worked for ABC News and Good Morning America for nearly 6 years. Most recently, Greg worked for CNN for shows such as Paula Zahn Now, American Morning and various CNN business shows. Greg encurages feedback and welcomes comments. You may also support USAWatchdog.com by clicking here to donate. Reprinted with permission.