Less than a decade after the biggest financial crisis since the Great Depression, over-zealous central bankers are risking a second economic collapse. The continuous credit creation and rock-bottom interest rates in the U.S., China, the EU, and Russia are meant to incentivize lending, but really they are engineering a second, much larger, financial crash.
Monetary stimulus provided the backbone for a global recovery by adding liquidity to the market and bolstering asset prices. The Federal Reserve’s quantitative easing program quadrupled the central bank’s liabilities from $1.0 trillion in 2007 to a whopping $4.0 trillion this year.
Other nations watched as the Fed printed cash to buy junk bonds from distressed banks—a move that won them a stock market boom. The strategy appeared so successful that lawmakers at the European Central Bank rushed to imitate it, with China and Russia following closely behind.
Continue Reading >> Economic Collapse: This Could Lead to a Stock Market Crash in 2016