Never before has so much fiat central bank debt been exchanged for so much fiat government debt, among other assets, and all on a global scale. Central bank balance sheets have expanded mightily. Stay tuned for how it all works out. From Chris Martenson at peakprosperity.com:
And how do things usually work out for the rat?
There are ample warning signs that another serious financial crisis is on the way.
These warning signs are being soundly ignored by the majority, though. Perhaps understandably so.
After 10 years of near-constant central bank interventions to prop up markets and make stocks, bonds and real estate rise in price — while also simultaneously hammering commodities to mask the inflationary impact of their money printing from the masses — it’s difficult to imagine that “they” will allow markets to ever fall again.
This is known as the “central bank put”: whenever the markets begin to teeter, the central banks will step in to prop/nudge/cajole the markets back towards the “correct” direction, which is always: Up!
It’s easy in retrospect to see how the central banks have become caught in this trap of their own making, where they’re now responsible for supporting all the markets all the time.
The 2008 crisis really spooked them. Hence their massive money printing spree to “rescue” the system.
But instead of admitting that Great Financial Crisis was the logical result of flawed policies implemented after the 2000 Dot-Com crash (which, in turn, was the result of flawed policies pursued in the 1990’s), the central banks decided after 2008 to double down on their bets — implementing even worse policies.
The Largest-Ever Monetary Experiment In Human History
It’s not hyperbole to say that the monetary experiment conducted over the past ten years by the world’s leading central banks (and its resulting social and political ramifications) is the largest-ever in human history:
This global flood of freshly-printed ‘thin air’ money has no parallel in the historical records. All around the world, each of us is part of a grand experiment being conducted without the benefits of either prior experience or controls. Its outcome will be binary: either super-great or spectacularly awful.
If the former, then no worries. We’ll just continue to borrow and spend in ever-greater amounts — forever. Perpetual prosperity for everyone!
But if things hit a breaking point, then you had better be prepared for some truly bad times.
To continue reading: We Are All Lab Rats In The Largest-Ever Monetary Experiment In Human History