Proverbs 27:12 The prudent sees danger and hides himself, but the simple go on and suffer for it.
Proverbs 4:13 Hold on to instruction; do not let go. Guard it, for it is your life.
Are we entering another Credit Event? I remember Lehman Brothers and Bear Stears. These events start slow and gather speed until things start to cascade.
Germany’s Deutsche Bank is in the news. Credit Default Swaps (insurance) are soaring! Tier 1 Bonds are crashing. Did Deutsche Bank receive $60 billion in Federal Reserve Foreign Repo Agreements?
European banks hold bonds yielding less than 0%. They are losing money big time as interest rates go up.
Global liquidity and money are in short supply. Liquidity is the fuel of the economy. Bank deposits are decreasing. Things are getting more difficult to get a loan.
Federal Reserve Chairman Jerome Powell is focused on lowering inflation. He says interest rates are not coming down any time soon.
Michael Douville recommends reading an article, Too Small To Not Fail, A Short History of the World by Danielle DiMartino Booth. For those not familiar, Danielle is a former Federal Reserve Insider. She is the CEO & Chief Strategist, Quill Intelligence LLC, and Economist.
Instead of mass mobilizing against Powell as if he was the reincarnation of King Louis XVI, why not grow up? In the absence of a solution without consequences, he’s made an attempt to steer the economy into the first recession from which it has the slightest chance of exiting without the dead weight of zombie companies, without the corrupt practice of anointing Wall Street’s kingpins the de facto makers of monetary policy. A wise man once said, “There is no such thing as a free lunch.”
Damn right there’s not. Perhaps we accept the truth in this wisdom and, in doing so, the consequences of our actions. -Danielle DiMartino Booth
https://dimartinobooth.substack.com/p/too-small-to-not-fail-history
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