Global Reset Coming! Central Banks Are Losing Control Of The Financial Markets

THE CENTRAL BANKS ARE LOSING CONTROL OF THE FINANCIAL MARKETS!

Michael Snyder at the Economic Collapse Blog writes: Every great con game eventually comes to an end.  For years, global central banks have been manipulating the financial marketplace with their monetary voodoo.  Somehow, they have convinced investors around the world to invest tens of trillions of dollars into bonds that provide a return that is way under the real rate of inflation.  For quite a long time I have been insisting that this is highly irrational.  Why would any rational investor want to put money into investments that will make them poorer on a purchasing power basis in the long run?  And when any central bank initiates a policy of “quantitative easing”, any rational investor should immediately start demanding a higher rate of return on the bonds of that nation.  Creating money out of thin air and pumping into the financial system devalues all existing money and creates inflation.  Therefore, rational investors should respond by driving interest rates up.  Instead, central banks told everyone that interest rates would be forced down, and that is precisely what happened.  But now things have shifted.  Investors are starting to behave more rationally and the central banks are starting to lose control of the financial markets, and that is a very bad sign for the rest of 2015.

And of course it isn’t just bond yields that are out of control.  No matter how hard they try, financial authorities in Europe can’t seem to fix the problems in Greece, and the problems in Italy, Spain, Portugal and France just continue to escalate as well.  This week, Greece became the very first nation to miss a payment to the IMF since the 1980s.  We’ll discuss that some more in a moment.

Over in Asia, stocks are fluctuating very wildly.  The Shanghai Composite Index plunged by 5.4 percent on Thursday before regaining all of those losses and actually closing with a gain of 0.8 percent.  When we see this kind of extreme volatility, it is a very bad sign.  It is during times of extreme volatility that markets crash.

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Remember, stocks generally tend to go up during calm markets, and they generally tend to go down during choppy markets.  So most investors do not want to see lots of volatility.  Unfortunately, that is precisely what we are witnessing all over the world right now.  The following comes from the Wall Street Journal…

“Volatility over the last days has been breathtaking, especially in bond markets,” said Wouter Sturkenboom, senior investment strategist at Russell Investments. He said that it rippled through equity and currency markets, which overreacted.

The yield on the benchmark German 10-year bond touched 0.99%, its highest level since September, before erasing the day’s rise and falling back to 0.84%. The 10-year U.S. Treasury yield, which hit a fresh 2015 high of 2.42% earlier Thursday, recently fell back to 2.33%. Yields rise as prices fall.

Sometimes when bond yields go up, it is because investors are taking money out of bonds and putting it into stocks because they are feeling really good about where the stock market is heading.  This is not one of those times.  As Peter Tchir has noted, the huge moves in the bond market that we are now seeing are the result of “sheer panic in the market”…

In a morning note before the open, Brean Capital’s Peter Tchir wrote: “It is time to reduce US equity holdings for the near term and look for a 3% to 5% move lower. The Treasury weakness is NOT a ‘risk on’ trade it is a ‘risk off’ trade, where low yields are viewed as a risk asset and not a safe haven.” And Tom di Galoma, head of fixed-income rates and credit at ED&F Man Capital Markets, told Bloomberg, “This is sheer panic in the market from the standpoint of what’s been happening in Europe … Most of Wall Street is guarded here as far as taking on new positions.”

But this wasn’t supposed to happen.

After watching the Federal Reserve be able to successfully use quantitative easing to drive down interest rates, the European Central Bank decided to try the same thing.  Unfortunately for them, investors are starting to behave more rationally.  The central banks are starting to lose control of the financial markets, and bond yields are soaring.  I think that Peter Boockvar summarized where we are currently at very well when he stated the following…

I’ve said this before but I’m sorry, I need to say it again. What we are witnessing in global markets is the inherent contradiction writ large that is modern day monetary policy where dangerously ZIRP, NIRP and QE are considered conventional policies. The contradiction is simply this: the desire for higher inflation if fulfilled will result in higher interest rates that central banks are trying so hard and desperately to suppress.

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Outside of the short end of the curve, markets will always win for better or worse and that is clearly evident now. The ECB is getting their first taste of the market talking back and in quite the violent way. In the US, the bond market is watching the Fed drag its feet (its never-ending) with wanting to raise interest rates and finally said enough is enough. The US Treasury market is tightening for them. Since mid April, the 5 yr note yield is higher by 40 bps, the 10 yr is up by 55 bps and the 30 yr yield is up by 65 bps.

And if global investors continue to move in a rational direction, this is just the beginning.  Bond yields all over the planet should be much, much higher than they are right now.  What that means is that bond prices potentially have a tremendous amount of room to go down.

One thing that could accelerate the global bond crash is the crisis in Greece. Negotiations between the Greeks and their creditors have been dragging on for four months, and no agreement has been reached.  Now, Greece has missed the loan payment that was due to the IMF on June 5th, and it is asking the IMF to bundle all of the payments that are due this month into one giant payment at the end of June…

Greece has asked to bundle its four debt payments to the International Monetary Fund that fall due in June so that it can pay them in one batch at the end of the month, Greek newspaper Kathimerini reported on Thursday.

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The request is expected to be approved by the IMF, the newspaper said. That would mean Greece does not have to pay the first tranche of 300 million euros that falls due on Friday.

Greece faces a total bill of 1.5 billion euros owed to the IMF over four installments this month.

Of course that payment will not be made either if a deal does not happen by then.  And with each passing day, a deal seems less and less likely.  At this point, the package of “economic reforms” that the creditors are demanding from Greece is completely unacceptable to Syriza.  The following comes from an article in the Guardian…

Fresh from talks in Brussels, Tsipras faced outrage on Thursday from highly skeptical members of his own Syriza party. A five-page ultimatum from creditors, presented by the European commission president, Jean-Claude Juncker, was variously described as shocking, provocative, disgraceful and dishonourable.

“It will never pass,” said Greece’s deputy social security minister, Dimitris Stratoulis. “If they don’t back down, the country won’t be lost … there are alternatives that would cost less than our signing a disgraceful and dishonourable agreement.”

Ultimately, I don’t believe that we are going to see an agreement.

Why?

Well, I tend to agree with this bit of analysis from Andrew Lilico…

The Eurozone does not want to make any compromise with the current Greek government because (a) they don’t believe they need to because Greek threats to leave the euro are empty both because internal polling suggests Greeks don’t want to leave and because if they did leave that doesn’t really constitute any threat to the euro; (b) because they (particularly perhaps Angela Merkel) believe that under enough pressure the Greek government might collapse and be replaced by a more cooperative government, as has happened repeatedly before in the Eurozone crisis including in Italy and Greece itself; and (c) because any deal with Greece that is seen to involve or be presentable as any victory for the Greek government would threaten the political positions of governments in several Eurozone states including Spain, Portugal, Italy, Finland and perhaps even the Netherlands and Germany.

Furthermore, it’s not clear to me that the Eurozone creditors at this stage would have much interest in any deal based upon promises, regardless of how much the Greek had verbally surrendered.  Things have gone too far now for mere words to work.  They would need to see the Greeks deliver actions — tangible economic reforms and tangible, credible primary surplus targets and a sustainable change in the long-term political mood within Greece that meant other Eurozone states might eventually get their money back.  That is almost certainly not doable at all with the current Greek government.  The only deal possible would be with some replacement Greek government that had come in precisely on the basis that it did want to do a deal and did want to pay the creditors back.

On the Syriza side, I see no more appetite for a deal.  They believe that austerity has been ruinous for the lives of Greeks and that decades more austerity would mean decades more Greek economic misery.  From their point of view, default or even exit from the euro, even if economically painful in the short term, would be better than continuing with austerity now.

You can read the rest of his excellent article right here.

Without a deal, the value of the euro is going to absolutely plummet and bond yields over in Europe will go through the roof.  I am fully convinced that this is the beginning of the end for the eurozone as it is currently constituted, and that we stand on the verge of a great European financial crisis.

And of course the financial crisis that is coming won’t just be in Europe.  The global financial system is more interconnected than ever, and there are tens of trillions of dollars in derivatives that are tied to foreign exchange rates and 505 trillion dollars in derivatives that are tied to interest rates.  When this giant house of cards collapses, the central banks won’t be able to stop it.

In the end, could we eventually see the entire central banking system itself totally collapse?

That is what Phoenix Capital Research believes is about to happen…

Last year (2014) will likely go down in history as the “beginning of the end” for the current global Central Banking system.

What will follow will be a gradual unfolding of the next crisis and very likely the collapse of the Central Banking system as we know it.

However, this process will not be fast by any means.

Central Banks and the political elite will fight tooth and nail to maintain the status quo, even if this means breaking the law (freezing bank accounts or funds to stop withdrawals) or closing down the markets (the Dow was closed for four and a half months during World War 1).

There will be Crashes and sharp drops in asset prices (20%-30%) here and there. However, history has shown us that when a financial system goes down, the overall process takes take several years, if not longer.

We stand at the precipice of the greatest economic transition that any of us have ever seen.

Even though things may seem very “normal” to most people right now, the truth is that the global financial system is fundamentally flawed, and cracks in the system are starting to appear all over the place.

When this system does collapse, it will take most people entirely by surprise.

But it shouldn’t.

All con games eventually fall apart in the end, and we are about to learn that lesson the hard way.

By: Voice of Reason

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FOR LINKS TO UNDERSTAND THE ECONOMY & THE COMING ECONOMIC COLLAPSE:

• Deathblow to the Dollar – Even Our “Allies” Abandoning U.S.
• What Will Happen To You When The Dollar Collapses?
• Gerald Celente: “America Is A Collapsing Third World Country”
• The Market Crash to End All Market Crashes Coming
• The Perfect Storm & Global Debt To GDP Ratio: 286 Percent
• Military Site: Economic Collapse Will Lead to Massive 78% Depopulation
• Trouble Ahead: ‘Within One Year 9 Out of 10 Americans Would Be Dead’
• We Just Broke 2008′s Record For The Fastest Economic Unraveling!
• WE ARE NOW IN THE FINAL STAGES OF THE COLLAPSE
• How Will the Dollar Crash Affect ME PERSONALLY?
• DOLLAR DOMINATION IS OVER!!!! – OMFIF Discusses Alternatives
• THE TRANS-PACIFC PARTNERSHIP: OBAMA’S HIROSHIMA TO THE ECONOMY!
• U.S. Dollar is Going DOWN! Financiers Rush to Flee the Doomed West!
• 19 Signs That American Families Are Being Economically Destroyed
• You STILL Don’t Believe the Economy Will Collapse? Think Again!
• ECONOMIC COLLAPSE: Have You Done All You Can to Prepare In Advance?
• JP Morgan Chase Banker: You’ll Never Guess… “SUICIDE?!?!?”
• ANOTHER Banker, This One From ABN Amro Commits “Suicide”
• It Is About To Get Ugly: Oil Is Crashing And So Is Greece
• 48 Dead Bankers All From Suicide? – Hold the Key to the Coming Civil War
• Gallup Shatters Obama’s Positive Job Growth: ‘Extremely Misleading’
• Warning: “The American Dream Is About To Drastically Change…
• You Are Witnessing the End of the American Empire… Right Now!
• Dead Bankers Hold the Key to the Coming Civil War
• Why Did This Reporter “Disappear” After Predicting the Collapse of Oil Prices?
• How Plunging Oil Prices Could Lead to World War III
• Something Dark Is Here: Dead Banker List Has Reached 36 
• MUST READ! – How to Survive While the Dollar Dies: Preppernomics
• 62 Percent Of Americans Are Living Paycheck To Paycheck
• JP MORGAN PAID HER $9 BILLION DOLLARS TO KEEP FROM TALKING!!!!
• No Recovery From America’s Economic Extinction Level Event
• EXPERT: Obama’s Economic ‘SURGE’ Built on TOTALLY Fabricated Data! 
• The New York Federal Reserve Has Signaled the End of the Dollar Is Near
• How Vulnerable Is America to Mass Starvation?
• The Math Does Not Lie: America Is One Hiccup Away From Total Anarchy
• Obama Unemployment Numbers All LIES, LIES, LIES, LIES!
• Expect “DEATH SQUADS” as Civil War Breaks Out In the United States
• US Families Increasingly Prepared For “Modern Day Apocalypse”
• New Law Would Make Taxpayers Potentially Liable For TRILLIONS In Losses
• Debt, $18 Trillion Dollars, Oil, Gold, Currency War, World War
• Guess What Happened The Last Time Commodity Prices Crashed Like This?
• The Calm Before the Storm: All Hell Will Break Loose In 2015
• Collapsing Holiday Sales Are A Signal That A Recession Is Coming
• Plummeting Oil Prices Could Kill Banks Holding Trillions In Derivatives
• WORLD WAR III IS ALL THAT’S LEFT TO SAVE THE AMERICAN ECONOMY
• Indicator That Precedes Almost Every Stock Market Correction 
• The Rise of the ‘Petro-yuan’ and the Slow Erosion of Dollar Hegemony
• Asia’s Great Narrative Dilemma: China on the Rise, U.S. Simply Paralyzed?
• Guess What Happened The Last Time The Price Of Oil Crashed Like This?
• CIA: “Forget Iran, Iraq, and Syria this is where WWIII will start”
• Petrodollar Death Means A Liquidity And Oil-Exporting Crisis On Deck
• No One Told You When To Run, You Missed The Starting Gun
• The American Dream Is Leaving America
• Why Are So Many Really Smart People Forecasting Economic Disaster?
• 3/10 Largest Economies In The World Have Already Fallen Into Recession 
• Obamacare = A Death Panel For The U.S. Economy
• The U.S. Trade Deficit With China Just Hit A New Record High 
• We Have Just Witnessed The Last Gasp Of The Global Economy
• RUSSIA MAY BAN CIRCULATION OF US DOLLAR
• MI5 Officer: US Wants War Against Anyone Not Using PetroDollar
• Financial Collapse Will Cause Civil Unrest in America by 2016
• France Could Be About To Unleash Economic Hell On The U.S. 
• Dr. Carson: Obama’s Economic Policies Are “Asinine” [VIDEO]
• Government Economic Numbers Are Being Highly Manipulated
• The 10 Principles of Economics You Should Know
• Pentagon Prepping For Large Scale Economic Breakdown!
• Pentagon not Ready for Cold War 2
• Steve Forbes on Obama Economics, “This is Truly Crazy”
• America Drops Out Of The Top 10 Most Economically Free 1st Time
• Ron Paul Warns of Martial Law and Economic Collapse
• THE ECONOMIC COLLAPSE OF AMERICA HAS BEGUN: 
• UNEMPLOYMENT RATE DROPS & ECONOMIC COLLAPSE ACCELERATES
• 19 Very Surprising Facts About The Messed Up State Of The U.S. Economy
• Top Cyclical Forecaster: “Yes, A Mad Max Event Is Possible”
• The Real Story on How the Obama Recovery Is Working Out
• The U.S. Government Is Borrowing About 8 Trillion Dollars A Year
• MOST AMERICANS ARE NOT READY FOR AN ECONOMIC COLLAPSE
• H.R. 2847 – Helping Cause the U.S. Dollar Collapse! 
• FALSE EAST/WEST PARADIGM HIDE THE RISE OF NEW GLOBAL CURRENCY
• Forget Russia Dumping U.S. Treasuries … Here’s the REAL Economic Threat
• The Collapse Of The American Economy Has Begun
• HUGE: Chinese Renminbi Becomes Directly Tradable With the Euro
• Central Banking Is The Problem, Not The Solution
• Proof That Government Economic Numbers Are Being Highly Manipulated
• The 35.4 Percent of the United States : 109,631,000 on Welfare
• 27 Huge Red Flags For The U.S. Economy
• 17 Facts To Show To Anyone That Believes That The U.S. Economy Is Just Fine
• Obamanomics Under Fire as Economy Slows to 0.1 Percent Growth Rate
• Obama Fiddles While the Economy Burns
• First Time America Drops Out Of Top 10 Most Economically Free Countries
• Obama Doubles Down on Destroying Economy
• The New Realities Of The Obama Economy

ANALYSTS EVERYWHERE ARE SUGGESTING WE ARE ON THE VERGE OF WW III!

• BREAKING NEWS: The Shot Heard Round the World HAS Been Fired!
• Chinese Setting the Stage For a Military Invasion of the U.S. West Coast 
• Is War in the Cards for 2015?
• Putin Sends Nuclear Bombers Over English Channel
• Debt, $18 Trillion Dollars, Oil, Gold, Currency War, World War
• America Played by Council on Foreign Relations & Trilateral Commission
• Multiple Sources Indicate North Korea Will Attack the American Power Grid
• The U.S. Government Is Practically Begging for Global War
• On the Brink of War and Economic Collapse
• The Calm Before the Storm: All Hell Will Break Loose In 2015
• Is World War III ALL That is Left to SAVE the American Economy?
• House of Representatives Declares War on Russia
• Russia Prepares For War… Introduces National Defense Control Center
• World War 3 Looming: The REAL Threat of Russia’s Military Might
• WATCH: THE ROADMAP TO WORLD WAR III:
• Russian General Seeks Nuclear First-Strike Option Against US
• RED ALERT: PUTIN THREATENS TO NUKE U.S. & ALLIES
• Russia’s Ballistic Missile Interceptors Outnumber Those Of US
• Does Russia Think Their New Nuclear Weapons Could Win A War?
• Russia Tests ‘Satellite Catcher’ 
• U.S. Military Readiness For War, Competitive Edge WORSENING! 
• Nuclear War: Russia Shocks US With Tactical Weapons, Pentagon Retaliates
• Putin to the Western Elites: “WORLD WAR III IS INEVITABLE!”
• Revealed: How the Soviets Planned To Go To War with America’s Navy
• Russian Warplanes Send ‘GREAT POWER’ Message: NATO
• NATO Says Russian Jets, Bombers Circle Europe in Unusual Incidents
• Russia to Place Global Navigation Stations in China 
• MI5 Officer: US Wants War Against Anyone Not Using PetroDollar
• REPORT: Russia Uses Tactical Nuclear Weapon at Luhansk Airport
• Russia Dispatches Naval Force to Reopen Arctic Base…
• Russian General Seeks Nuclear First-Strike Option Against US
• Russian Bombers Near Canada Practice Cruise Missile Strikes on US
• Do We Dare Follow a TRAITOR (Obama) Into WW III?
• RED ALERT: PUTIN THREATENS TO NUKE U.S. & ALLIES
• France Could Be About To Unleash Economic Hell On The U.S.
• These U.S. Allies Just Did Something Major Behind Obama’s Back
• WW III Close – Report Reveals Ukraine Manufactured By U.S. Government
• Israel Just Set The Stage For WWIII – WHO Uses Nuclear Weapons First?
• The Stage Is Being Set For World War III 
• This Will Be the Primary Reason for World War III
• Beginning of World War III?
• Martial Law, FEMA Camps & Surrender Is In Our Immediate Future (Video)
• World War III Is Close, Martial Law Is Even Closer
• Is the Stage for WW3 Being Set Right In Front of You?
• American Media Absent As Russia Amasses ‘Full Combat Readiness’ Strategic Bombers

GET YOUR LIBERALS ARE COMMUNISTS 

MOUSE PAD TODAY!

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• CrissCross

  NWO Cabal Pursues Total Dominion Over The Earth’s Weather And Natural Resources!!!
  http://themillenniumreport.com/2015/06/nwo-cabal-pursues-total-dominion-over-the-earths-weather-and-natural-resources/

  …must read.

  Jun 12, 2015, 5:03 am 0 Reply