"Subprime auto loans blow up...60-day delinquency rate surged to 5.93% in August, substantially higher than during the peak of the Financial Crisis at 5.04% in January 2009"
The world's yearly per capita share of the FED's injections is $59,500. If the economy was actually getting $120 billion a day, subprime auto would not now be melting down. Everyone would be driving a new Mercedes. The money they are printing is as phony as the central banks who are issuing it. We are living in a Potemkim village; all pretty exterior with nothing behind it. The mirage will continues to appear until the first little breeze comes along. Then it will all vanish before our eyes!
The central banks will continue to print to keep their associated banks from collapsing. Deutsche Bank is four times the size of Lehman before it folded; and Lehman almost broke the FED, and the world's other central banks when they bailed out the failing banking sector. They will print until there is no more future collateral for sale to pull forward into the present. They will print until the credit markets are destroyed because they can't bail out an insolvent economy. They will print until the spread has become so thin that no one can afford to loan money. That is no more than 75 bps away; a mere two years; the last criisis will be showing up when the next repo like event appears! That will be a tsunami that will roll over the entire world because we were foolish enough, and greedy enough to connect everything all together.
The isolationism that is so feared by Wall Street will be the only remaining means of survival. We put all of our eggs in one basket, and the bottom has fallen out of the basket. The oil age is over! The multinationals will be eating their own young, and globalism will perish in its own sea of hubris. The face of the world will be changed forever!
Are you ready?
