02
December
2023

Central banks bankrupt!?

Central banks are caught between a Rock, a Hard Plate and a Firing Squad!

Central Banks are bankrupt, and the emperor has no clothes. We just have to wait until the little boy notices it!

central bank balance sheetsCentral banks' balance sheets have been quadrupling since 2007 from $3.5 trillion to over $14 trillion. So what exactly does this mean? The world’s central banks had to “create” over $10 trillion of liquidity by purchasing assets onto their balance sheets to keep the system from imploding.

Central banks have been buying everything …including stocks, to prevent the markets from turning down. It is safe to say they understand that with the leverage and derivatives outstanding, they cannot allow markets to correct (or, God forbid, actually enter bear markets). They understand the “size” of the derivatives markets is so large NO ONE can withstand a downturn and actually be called upon to perform their “insurance payments.”

So the central banks are now “forced” to purchase assets to prevent market downturns, but one should ask, “Who will they eventually sell to”? The answer, of course, is “no one” because there is no one large enough to take these assets off their books.

Central banks “create money” via credit. They are now buying all sorts of assets from “sovereign debt” to “junk debt” to get it off of bank balance sheets to truly “stock.”

central banks bankrupt 2023

Central banks have put themselves in the position of buying assets they know they can never sell. They can never sell because there are no buyers large enough to buy, AND they would create a downturn in markets they initially denied if they ever stopped buying, let alone selling assets.

central bank balanceThe central banks, by definition, create inflation (via currency and credit). So the continual creation of their “product” (fiat money) destroys their product. Because “money” MUST be created in ever greater amounts to avoid a crash or deflation, the central banks are so, in fact, destroying their currency. Central banks are forced in the same mathematical manner as any Ponzi scheme …to issue currency exponentially.

What is actually happening has been entirely predictable since 1913. At some point, the U.S. (and thus the entire world, as the dollar is the reserve currency) would reach debt saturation by definition. We did so in the 2006-2007 era. The only balance sheets left to “reflate” at that point were the sovereign treasuries/central banks themselves. As a result, they have destroyed their balance sheets over the last 10 years. It is only a matter of time until this is fully recognized by the investing/consuming public and thus loses confidence in the central banks themselves. At this point, it is game over.

The conclusion is that the Central Banks artificially have inflated their own balances over the past 10 years. It is only a matter of time before investors and consumers will realize this. Who and/or what, event will kick open the ROTTEN DOOR is a mystery. Historically, this usually happens because there is hyperinflation after the little boy calls that the Emperor does not wear clothes!...but it may also be WAR.

The only thing a person can do is to protect himself and his family as much as possible [gold and second passports are important]. Unfortunately, today there are not so many options anymore .... Who don't act will, like the Venezuelans, no longer be able to buy toilet paper.

 

The day we have HYPERINFLATION, everybody will notice the Emperor has no clothes and Central Banks are bankrupt.

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