{"id":9704,"date":"2015-07-04T08:26:40","date_gmt":"2015-07-04T13:26:40","guid":{"rendered":"http:\/\/olduvai.ca\/?p=9704"},"modified":"2015-07-04T08:26:40","modified_gmt":"2015-07-04T13:26:40","slug":"in-a-world-of-artificial-liquidity-cash-is-king","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=9704","title":{"rendered":"In A World Of Artificial Liquidity \u2013 Cash Is King"},"content":{"rendered":"

In A World Of Artificial Liquidity \u2013 Cash Is King<\/a><\/h3>\n
\n
\n
\n
And you’d better have some stashed out of the system<\/strong><\/div>\n<\/div>\n<\/div>\n<\/div>\n

Global central banks are afraid. Before Greece tried to stand up to the Troika, they were merely worried. Now it\u2019s clear that no matter what they tell themselves and the world about the necessity or even righteousness of their monetary policies, liquidity can still disappear in an instant. Or at least, that\u2019s what they should be thinking.<\/p>\n

The Federal Reserve and US government led policy of injecting liquidity into the US and then into the worldwide financial system has resulted in the issuance of trillions of dollars of debt, recycling it through the largest private banks, and driving rates to 0% — or below. The combined book of debt that the Fed and European Central Bank (ECB) hold is $7 trillion. None of that has gone remotely into fixing the real global economy. Nor have the banks that have ben aided by this cheap money increased lending to the real economy. Instead, they have hoarded their bounty of cash. It\u2019s not so much whether this game can continue for the near future on an international scale. It can. It is. The bigger problem is that central banks have no plan B in the event of a massive liquidity event.<\/p>\n

Some central bank entity leaders have admitted this. IMF chief, Christine Lagarde for instance, warned Federal Reserve Chair, Janet Yellen that potential US rate hikes implemented too soon, would incite greater systemic calamity. She\u2019s not wrong. That\u2019s what we\u2019ve come to: a financial system reliant on external stimulus to survive.<\/p>\n

These \u201cemergency\u201d measures were supposed to have healed the problems that caused the financial crisis of 2008 — the excessive leverage, the toxic assets wrapped in complex derivatives, the resultant credit and liquidity crunch that occurred when banks lost faith in each other. Meanwhile, the infusion of cheap money and liquidity into banks gave a select few of them more power over a greater pool of capital than ever.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

In A World Of Artificial Liquidity \u2013 Cash Is King And you’d better have some stashed out of the system Global central banks are afraid. Before Greece tried to stand up to the Troika, they were merely worried. Now it\u2019s clear that no matter what they tell themselves and the world about the necessity or […]<\/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":[1764,1269,88,109,1035,124,6177,195,1668,305,1167,418,431,451,487,536,575,2218,1816,661,753,2868],"class_list":["post-9704","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-international-settlements","tag-bis","tag-bonds","tag-capital","tag-cash","tag-central-banks","tag-christine-lagarde","tag-debt","tag-derivatives","tag-federal-reserve","tag-greece","tag-imf","tag-interest-rates","tag-janet-yellen","tag-liquidity","tag-money","tag-nomi-prins","tag-peak-prosperity","tag-pensions","tag-qe","tag-stocks","tag-troika"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9704","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=9704"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9704\/revisions"}],"predecessor-version":[{"id":9705,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9704\/revisions\/9705"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9704"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9704"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9704"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}