Liquidity Crisis? No Problem, Just Start Another War!
By Gregory Mannarino
Liquidity Crisis? No Problem, Just Start Another War!
By Gregory Mannarino TradersChoice.net
The world today is in crisis, a liquidity crisis of unimaginable proportions.
The entire world financial system is rapidly becoming illiquid, it is running out of cash. Yes, despite the world today being overrun with ever growing debt, it is running out of cash- fast.
Moreover, the world economy is in a deliberate central bank backed freefall with no end in sight. With that, crude oil prices have also fallen under pressure as of late.
So, how can the problems of system illiquidity and falling crude oil prices be temporarily solved? Just start a new war. Crisis averted! More like pushed off.
For many weeks now, global debt has been swiftly selling off, driving bond yields higher and higher, and this in turn has rattled world stock markets. Instability in the debt market is worsening. As bizarre as it may be, WAR can, at least for a while, introduce stability into the world’s debt market. Stability in the debt market can also stabilize world stock markets.
The entire world banking system itself is today insolvent, something which has been assured via the now ZERO reserve debt-based system. The world financial system itself is in a death spiral as liquidity in the system is evaporating, quickly. Investment banks over the past several years have loaded up BIG TIME on low yielding debt, are now watching their portfolios’ value disappear as yields rise. It’s these same institutions who also have billions of dollars of leveraged bets on the price of crude oil being high! AND THEY NEED A BIG WAY TO KEEP THE PRICE OF CRUDE HIGH as demand falls.
On a macro scale, the issue of liquidity in the system drying up is of course the biggest issue.
In a full-on liquidity crisis ALL CREDIT STOPS, and the system locks up. Access to cash in bank accounts, debit cards, credit cards, inter-business lending, EVERYTHING STOPS.
To keep the world financial system from locking up, an ever-increasing flow of debt MUST be pumped into it… and it cannot ever stop. Debt must be borrowed into the system constantly, and ever more reasons to continue this mechanism MUST be instituted to allow the system to function.
No other endeavor on Earth generates more cash flow into the system in terms of borrowed dollars than WAR, and what better than a Middle East war to keep the price of crude high.
I have warned everyone who has followed my work FOR YEARS that they will do ANYTHING to keep new debt flowing into the system, and to be ready for anything. The escalation and propagation of war, and the start of new wars allows at least temporarily, more liquidity to be pumped into the system. Make no mistake, just as I said when the Russia/Ukraine war started- this is just the beginning.
Support for the Ukraine war has slumped. Biden gives Hamas 6 billion dollars through Iran and voila, a new war unfolds.
About oil. There may be plenty of oil in the world, but we ain't getting it. BRICS+ has plenty but they are trading it among themselves. If the U.S. wants any we'll ultimately need to pay in gold, and we don't have any. Meanwhile, the Biden administration is doing all it can to stop oil and gas production in the U.S. I'm most aware of the $25,000,000 program to plug "abandoned" wells in Kansas. The KCC is seizing the wells without knowing if they can produce or not and without regard to the minerals owners or the equipment owners. Of course, this is small potatoes compared to cutting off the North Slope of Alaska for drilling. Again meanwhile, the Chinese government is encouraging their people to convert their yuan to gold - even if it's only one gram at a time. What the hell is this country doing?