Central banks throughout the world have set the global economy on course for a devastating crash. And as the harsh economic reality sets in, the world’s money manipulators are being forced to admit they’re powerless to soften the consequences of their reckless easy money policies.
In a recent conversation with CNN Money, investment strategist Ed Yardeni put the troubling economic news as simply as possible, saying: “Major central banks have run out of ammo.”
What he means is that central banks like the U.S. Federal Reserve have long pinned their hopes for a strong global economic future on easy money policies, driving down interest rates and artificially stimulating economies via fiat money pumping.
The policies have created a global addiction to easy money without actually doing much to create new demand for goods and services.
In December, Federal Reserve Chair Janet Yellen announced that the Fed would begin easing off its stimulus efforts because markets were looking up in the U.S. and globally. The claim was betrayed by all sorts of evidence to the contrary— but markets in the U.S. did jump a bit following her announcement.
It didn’t take long for reality to set in, leading to big dips on Wall Street for the remainder of the month. December ended up being the most economically volatile final month of the year since the economic crisis that rocked the world in 2008.
William White, the chair of the Organisation for Economic Co-operation and Development (OECD)’s review committee, recently told Bloomberg Business that the failure of low interest and quantitative easing programs worldwide is evident to anyone paying attention.
“The objective of that policy has changed totally — it’s trying to stimulate aggregate demand and the honest truth is that it’s not capable of doing that in a sustainable way,” White said. “If people thought we were in a period of deleveraging that would set the scene for a period of robust growth. We haven’t even started yet.”
The policies, which have become modus operandi throughout Europe and in Japan as well, are doing little more than creating a global mountain of debt that financial experts never expect to be paid down.
That means a lot of people who own assets tied up in the debt are in for a rude awakening once the world reaches peak economic chaos in the months ahead.
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