Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
Iran's Death Spiral -- 40 Years And Counting - 17 Feb 19
Venezuela's Opposition Is Playing With Fire - 17 Feb 19
Fed Chairman Deceives; Precious Metals Mine Supply Threatened - 17 Feb 19
After 8 Terrific Weeks for Stocks, What’s Next? - 16th Feb 19
My Favorite Real Estate Strategies: Rent to Live, Buy to Rent - 16th Feb 19
Schumer & Sanders Want One Thing: Your Money - 16th Feb 19
What Could Happen When the Stock Markets Correct Next - 16th Feb 19
Bitcoin Your Best Opportunity Outside of Stocks - 16th Feb 19
Olympus TG-5 Tough Camera Under SEA Water Test - 16th Feb 19
"Mi Amigo" Sheffield Bomber Crash Memorial Site Fly-past on 22nd February 2019 VR360 - 16th Feb 19
Plunging Inventories have Zinc Bulls Ready to Run - 15th Feb 19
Gold Stocks Mega Mergers Are Bad for Shareholders - 15th Feb 19
Retail Sales Crash! It’s 2008 All Over Again for Stock Market and Economy! - 15th Feb 19
Is Gold Market 2019 Like 2016? - 15th Feb 19
Virgin Media's Increasingly Unreliable Broadband Service - 15th Feb 19
2019 Starting to Shine But is it a Long Con for Stock Investors? - 15th Feb 19
Gold is on the Verge of a Bull-run and Here's Why - 15th Feb 19
Will Stock Market 2019 be like 1999? - 14th Feb 19
3 Charts That Scream “Don’t Buy Stocks” - 14th Feb 19
Capitalism Isn’t Bad, It’s Just Broken - 14th Feb 19
How To Find High-Yield Dividend Stocks That Are Safe - 14th Feb 19
Strategy Session - How This Stocks Bear Market Fits in With Markets of the Past - 14th Feb 19
Marijuana Stocks Ready for Another Massive Rally? - 14th Feb 19
Wage Day Advance And Why There is No Shame About It - 14th Feb 19
Will 2019 be the Year of the Big Breakout for Gold? - 13th Feb 19
Earth Overshoot Day Illustrates We are the Lemmings - 13th Feb 19
A Stock Market Rally With No Pullbacks. What’s Next for Stocks - 13th Feb 19
Where Is Gold’s Rally in Response to USD Weakness? - 13th Feb 19
US Tech Stock Sector Setting Up for A Momentum Breakout Move - 12th Feb 19
Key Support Levels for Gold Miners & Gold Juniors - 12th Feb 19
Socialist “Green New Deal” Points the Way to Hyperinflation - 12th Feb 19
Trump’s Quest to Undermine Multilateral Development Banks - 12th Feb 19
Sheffield B17 US Bomber Crash 75th Anniversary Fly-past on 22nd February 2019 Full Details - 12th Feb 19
The 2 Rules For Successful Trading - 12th Feb 19 -
Financial Sector Calls Gold ‘Shiny Poo.’ Are They Worried? - 11th Feb 19
Stocks Bouncing, but Will They Resume the Uptrend? - 11th Feb 19

Market Oracle FREE Newsletter

The Real Secret for Successful Trading

The BIS Paves the Way for Silver and Gold

Commodities / Gold and Silver 2014 Oct 23, 2014 - 03:53 PM GMT

By: Dr_Jeff_Lewis

Commodities Behind the scenes (or rather, behind the curtain of propaganda) the most influential of the banking class is sending out smoke signals. The Bank for International Settlements (BIS), which is the bank for central banks, has telegraphed the next major world financial downturn.

As if you could not see it coming. Recently, the Bank for International Settlement (BIS) warns of 'violent' reversal of global markets.


“Investors take zero-rates for granted and unwisely believe that central banks will protect them,” says the Capital Markets Chief of the Bank of International Settlements.
 
The global financial markets are dangerously stretched and may unwind with shock force as liquidity dries up, the Bank of International Settlements has warned.

Guy Debelle, head of the BIS’s market committee, said investors have become far too complacent, wrongly believing that central banks can protect them, many staking bets that are bound to “blow up” as the first sign of stress.

In a speech in Sydney, Mr. Debelle said: “The sell-off, particularly in fixed income, could be relatively violent when it comes. There are a number of investors buying assets on the presumption of a level of liquidity which is not there. This is not evident when positions are being put on, but will become readily apparent when investors attempt to exit their positions. The exits tend to get jammed unexpectedly and rapidly.

Mr. Debelle, who is also the Chief of Financial Markets at Australia’s Reserve Bank, said any sell-off could be amplified because nominal interest rates are already zero across most of the industrial world. “That is a point we haven’t started from before. There are undoubtedly positions out there which are dependent on (close to) zero funding costs. When funding costs are no longer close to zero, these positions will blow up,” he said.

The BIS warned earlier this summer that the world economy is in many respects more vulnerable to a financial crisis than it was in 2007. Debt ratios are now far higher, and emerging markets have also been drawn into the fire over the last five years. The world as whole has never been more leveraged.

Debt ratios in the developed economies have risen by 20 percentage points to 275pc of GDP since the Lehman Brothers crash. The new twist is that emerging markets have also been on a debt spree, partly as a spill-over from quantitative easing in the West. This has caused a flood of dollar liquidity into these countries that they have struggled to control. It has pushed up their debt ratios by 20 percentage points to 175pc, and much of the borrowing has been at an average real rate of 1pc that is unlikely to last."

What more confirmation do you need?  Perhaps they could have been "kind enough" to give us a timeframe. Certainly, it couldn't make a difference. The predominate view of the financial class is the same as it ever was - with each successive bubble. All of this confirms the political nature of the U.S. Central Bank.

And how far out on a limb the financial sector has gone - to the point where they are one giant branch of the entire government-political complex. Or the veritable tail wagging the dog.

What is the BIS?

From the BIS Website:

The Bank for International Settlements (BIS) was established in 1930 in Basel, Switzerland. It is an international organization, created pursuant to an international treaty (The Hague Agreements of 1930). Its shareholding members are central banks and monetary authorities.

The mission of the BIS is to serve central banks in their pursuit of monetary and financial stability, to foster international cooperation in those areas and to act as a bank for central banks.

Telling:

The outbreak of the global financial and banking crisis in 2007-08 accelerated the transformation of the governance structure of the international financial system. As a result, the G10, long the main organizational grouping in international financial policymaking (including at the BIS), was superseded by the G20 grouping of major advanced and emerging market economies.

At the same time, the work carried out by the BIS, the IMF, the OECD and other organizations has become more integrated, not least thanks to the efforts of the FSB. Since the 1990s, the committees that meet at the BIS and the secretariats it hosts have all gone through this process of widening their membership and strengthening their cooperation with other international bodies and organizations in order to remain globally representative.

The recent crisis has had a major influence on BIS research and on the work of the Basel-based committees and secretariats. Even before the crisis, BIS economists had issued warnings about the dangerous build-up of imbalances in the global financial system. The crisis has led to renewed and heightened emphasis on financial stability issues, particularly the need for a macro prudential approach to financial stability. The work of the Basel-based committees (the BCBS, CGFS, CPMI and Markets Committee) has been shaped by the need to address the challenges posed by the global financial crisis and has expanded accordingly.

This is a super hawkish statement; again, taken directly from the Institution’s official website.

Here is how the macro prudential approach boils down:

When the commercial paper markets inevitable tighten once again, we will conjure the liquidity. We will coordinate the next round of bailouts because the next drop in liquidity will be a freeze in liquidity. It will make Lehman look like a walk in the park. It makes it easy to justify the path toward world currency.

We've been warned. The intervention will come before hell freezes over. It will be too little too late. The systems that break will not be reflated. They will break permanently.

Yet, the monetary powers that be will do everything in their power to save in the name of the people. There is plenty of political capital. Lots of room to for implementation - to intervene with more QE.

Official inflation rates are low. Gold and silver have been hammered in percentage lock step with 2008 - even more. Both metals could run to nominal all time highs on the high octane potential of the computer dead collective-speculative short that must cover there all time high short position.

JPM and the rest of the big 4 commercials exist as a (short) shadow of themselves. They have been buying anything and everything the brain dead specs have been buying. It's one thing that mainstream finance views the metals as only commodities. Quite another when on top of this, they are pre-programmed traded by computer "scientists".

Plenty of new fears exist to justify the next intervention. Ebola, ISIS, Asia. Some believe that it is a planned transition to a new currency system. Some believe the big banks, even the BIS, are the orchestrators.

This may be true. No matter, the writing is once again on the wall for those who choose to believe it - but more importantly for those who chose to take action.

Here’s how psychiatrist, R.D. Laing described the social ramifications of politics in his 1967 book, The Politics of Experience:

“For Laing, the politics of experience is not just about influencing social behavior – it has an individual, inner consequence as well. Our behavior is a function of our experience. We act according to the way we see things.

If our experience is destroyed, our behavior will be destructive. If our experience is destroyed, we have lost our own selves.”

For more articles like this, and/or for a breath of fresh silver market reality amidst the stench of denial and technically meaningless short term price obsessed madness, check out http://www.silver-coin-investor.com

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com

    Copyright © 2014 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Dr. Jeff Lewis Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules