{"id":7385,"date":"2015-04-18T06:57:39","date_gmt":"2015-04-18T11:57:39","guid":{"rendered":"http:\/\/olduvai.ca\/?p=7385"},"modified":"2015-04-18T06:57:39","modified_gmt":"2015-04-18T11:57:39","slug":"the-global-liquidity-squeeze-has-begun","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=7385","title":{"rendered":"The Global Liquidity Squeeze Has Begun"},"content":{"rendered":"<h3><a href=\"http:\/\/theeconomiccollapseblog.com\/archives\/the-global-liquidity-squeeze-has-begun\" target=\"_blank\">The Global Liquidity Squeeze Has Begun<\/a><\/h3>\n<p>Get ready for another major worldwide credit crunch.\u00a0 Today, the entire global financial system resembles a colossal spiral of debt.\u00a0 Just about all economic activity involves the flow of credit in some way, and so the only way to have \u201ceconomic growth\u201d is to introduce even more debt into the system.\u00a0 When the system started to fail back in 2008, global authorities responded by pumping this debt spiral back up and getting it to spin even faster than ever.\u00a0 If you can believe it, the total amount of global debt has risen by\u00a0<a title=\"$35 trillion\" href=\"http:\/\/www.zerohedge.com\/news\/2015-04-17\/were-all-frogs-boiling-water-santelli-says-after-lacy-hunt-warns-far-over\" target=\"_blank\">$35 trillion<\/a>\u00a0since the last crisis.\u00a0 Unfortunately, any system based on debt is going to break down eventually, and there are signs that it is starting to happen once again.\u00a0 For example, just a few days ago the IMF warned regulators to prepare for a global \u201c<a title=\"liquidity shock\" href=\"http:\/\/www.telegraph.co.uk\/finance\/economics\/11538509\/IMF-tells-regulators-to-brace-for-global-liquidity-shock.html\" target=\"_blank\">liquidity shock<\/a>\u201c.\u00a0 And on Friday, Chinese authorities announced a ban on certain types of financing for margin trades on over-the-counter stocks, and we learned that preparations are being made behind the scenes in Europe for a Greek debt default and a Greek exit from the eurozone.\u00a0 On top of everything else, we just witnessed the biggest spike in credit application rejections\u00a0<a title=\"ever recorded\" href=\"http:\/\/www.gordontlong.com\/Articles\/art-2015-04-A-Macro_Insights-Shutting_Down_Lending.htm\" target=\"_blank\">ever recorded<\/a>\u00a0in the United States.\u00a0 All of these are signs that credit conditions are tightening, and once a \u201cliquidity squeeze\u201d begins, it can create a lot of fear.<\/p>\n<p>Over the past six months, the Chinese stock market has exploded upward even as the overall Chinese economy\u00a0<a title=\"has started to slow down\" href=\"http:\/\/theeconomiccollapseblog.com\/archives\/huge-trouble-is-percolating-just-under-the-surface-of-the-global-economy\">has started to slow down<\/a>.\u00a0 Investors have been using something called \u201cumbrella trusts\u201d to finance a lot of these stock purchases, and these umbrella trusts have given them the ability to have much more leverage than normal brokerage financing would allow.\u00a0 This works great as long as stocks go up.\u00a0 Once they start going down, the losses can be absolutely staggering.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Global Liquidity Squeeze Has Begun Get ready for another major worldwide credit crunch.\u00a0 Today, the entire global financial system resembles a colossal spiral of debt.\u00a0 Just about all economic activity involves the flow of credit in some way, and so the only way to have \u201ceconomic growth\u201d is to introduce even more debt into [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[130,175,195,364,2598,418,434,487,827],"class_list":["post-7385","post","type-post","status-publish","format-standard","hentry","category-economics","tag-china","tag-credit","tag-debt","tag-global-debt","tag-grexit","tag-imf","tag-international-monetary-fund","tag-liquidity","tag-united-states"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7385","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7385"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7385\/revisions"}],"predecessor-version":[{"id":7386,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7385\/revisions\/7386"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7385"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7385"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7385"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}