Zero Hedge: On Thursday, to little fanfare, China’s central bank announced its latest liquidity injection scheme, which many analysts saw as a quasi Quantitative Easing program and a potential precursor to full-blown QE.
Just like QE in the US, where financial system liquidity was boosted by the Fed injecting reserves into banks in exchange for sales of Treasurys and MBS, which fungible liquidity was then used for a variety of purposes including directly investing in risk assets as the JPM London Whale fiasco demonstrated, the PBOC announced that it will allow China’s primary dealers to swap their holdings of perpetual bonds for central bank bills, and directly use those bonds as collateral to access certain PBOC liquidity operations.
By directly intermediating in the market, and effectively backstopping securities issued by local banks, this measure will increase the appeal of perpetual bonds to be issued by banks making them riskless for all intents and purposes, which can then be used to bolster capital cushions and thereby help relax a key current constraint on credit supply. more …
Opinion: To the tune of “when you’re happy and you know it”
When your banking gets in trouble print some cash, When your GDP’s in trouble print some cash, When your banking gets in trouble, let the printing presses go and you’re out of banking trouble real fast … One More Time!
The Federal Reserve announced yesterday that they were considering backing off draining the excess money out of the system … translation: because of QE we are up to our eyeballs in debt and if we try to raise interest rates the global market will crash so we don’t know what the heck to do?
Quantitative easing is going to eventually bring down the global economy with hyperinflation by making the nations’ currencies worthless (Revelation 6:5-6).
It is a race to the bottom.
I have no idea which currency will crack first but if forced to guess, the euro will be first. The 28 nations of iron and clay (Daniel 2:40-43) is so battered by socialism and free stuff the European central bank (ECB) is stuck between a rock and a hard place.
If the European Central Bank President Mario Draghi (dragon in Italian) actually does stop QE, like he said, the EU will look something like this: