Belle Carter – Natural News April 7, 2023
An esteemed professor and economist pointed out that persistent inflation, the impending economic recession and an imminent insolvency crisis in the banking sector is leading the U.S. into a “doom loop.”
Nouriel Roubini, an erstwhile economic advisor to the Clinton administration, outlined his findings in a March 30 commentary titled “The Coming Doom Loop.” His piece published on Project Syndicate noted that to solve the decade-high inflation and provide liquidity support, “the only solution is a severe recession – and thus a broader debt crisis.”
“A severe recession is the only thing that can temper price and wage inflation, but it will make the debt crisis more severe, and that in turn will feed back into an even deeper economic downturn,” wrote Roubini. Given that throwing more money into the economy will not prevent this “systemic doom loop,” he urged everyone to prepare for the upcoming “stag-flationary debt crisis.”
Moreover, the economist blamed the “current regulatory regime” allowing banks to treat securities and loans “at their face value rather than their true market value” for the impending collapse of the banking system. He noted that most U.S. banks are technically near insolvency, and that hundreds more are already fully insolvent. (Related: The death of the Dollar is coming sooner than expected – when it happens expect bank runs and closures, food scarcity, riots, high unemployment, and hyper-inflation.)
Roubini also discussed the “duration risk” principle in his March 30 commentary. Under this principle, higher inflation leads to “higher bond yields, which in turn would hurt stocks as the discount factor for dividends rose.” At the same time, “higher yields on ‘safe’ bonds would imply a fall in their price” – owing to the inverse relationship between yields and bond prices.
“This basic principle seems to have been lost on many bankers, fixed-income investors and bank regulators,” he lamented.
Inflation, rate hikes hit banks hard
“Making matters worse, higher interest rates have reduced the market value of banks’ other assets as well,” Roubini continued.
“If you make a 10-year bank loan when long-term interest rates are one percent and those rates then rise to 3.5 percent, the true value of that loan – what someone else in the market would pay you for it – will fall. Accounting for this implies that U.S. banks’ unrealized losses actually amount to $1.75 trillion, or 80 percent of their capital.”
The economist ultimately concluded that central banks cannot “fool” themselves any longer by continuing to believe that rate hikes could curb inflation – while using liquidity support to maintain financial stability at the same time.
The collapse of Silicon Valley Bank (SVB), Signature Bank and others caused depositors to become jittery. An initial surge of $129.3 billion in deposit outflows from all U.S. domestically chartered banks was recorded in the first week following SVB’s failure. This has since slowed down to $84 billion.
U.S. regulators believe that while the surge in withdrawals represents a stabilization in deposit outflows, there remains considerable uncertainty as to where things will go moving forward.
“What’s unclear for us is how much of these banking stresses are leading to a widespread credit crunch. That credit crunch … would then slow down the economy,” said Federal Reserve Bank of Minneapolis President Neel Kashkari. “This is something we are monitoring very, very closely”
Mohamed El-Erian, another noted economist, also pointed out that ongoing deposit outflow from regional banks definitely spells trouble. He warned: “This could become a big issue for local communities, regions and sectors that fear that their access to loans will be curtailed because their traditional banking partners will have to shrink their balance sheets after losing deposits.”
EconomicRiot.com has more stories about the economic collapse of the United States.
Watch Nouriel Roubini warn about the American economy facing a “perfect storm” on the Fox Business program “Maria Bartiromo’s Wall Street.”
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This video is from the NewsClips channel on Brighteon.com.
Only the ‘blind’ will have failed to notice that the sheeple are getting more agitated and that urban protests are more frequent and widespread.
In the UK a variety of disparate political dictates ( pit and steel closures, Gulf and Afghan conflicts, Poll Tax and Countryside Alliance, anti-police, race riots and anti-lockdown riots, to name but a few) have served to lead to a cohesion amongst various groups of left, right and centre beliefs.
Protests and rioting have spread across many areas of the UK, and it is probably fair to say that èven th6e most average thinkers have had enough.
Indeed, it is probable that TPTB have yet to realise that they may have bitten off more than they can chew and are well and truly screwed.
The cost of living has risen and not just fiscally but more so in humanitarian terms with rapidly decreasing standards and loss of life for whatever reason.
People/sheeple are awakening and shouting NO! with greater feeling and emphasis. Indeed, France may prove to be the historic turning point in some form of world wide democracy that arises Phoenix-like from the ashes, nuclear or otherwise.
One thing is for sure, politicians, Big Pharma and the MIC, Financial Institutions etc., will never be trusted again and should cash survive less thinkers will use banks for they will resort to cash only and barter.
Batten down the hatches and man the pumps…
“An esteemed professor and economist …”
I think I prefer the various 19th and 20th century religious soothsayers that Rixon dredges up… 🙂
If anybody deserves Weimar II it’s America. Couldn’t be happier for it.
Israel gonna strike Iran he thinks.
Why?
Because Iran is a “threshold nuclear state”
I wonder what Iran would make of that…
Perhaps it will be the end of relentless Israeli threats?
What will Iran do if it were attacked?
I don’t think even Israel knows the answer to that question.
Let’s see, shall we.
HOPEFULY INTO ABYSS !
I deliberately avoid studying economics because it is people inventing things and deceiving each other, and we never get to the bottom of it except at Fractional Reserve Lending, started in Babylon, allegedly; and everyone who does study it claims to be the only one understanding it, which is a corollary of the creative tricksters (a creative interpreter on the healing side), but I do study language, and “trifecta” is a boring word from gambling, not applicable here
Roubini and his doom predictions go way back. I’ve been expecting doom since the 1970’s, and things have gotten worse with each decade. Now they get worse every year, if not every week. Doom is certainly accelerating, but each day we all still get up, go to our jobs, and the system continues.
I would say for sure things that have happened, like 911, the War of Terror, the Covid plandemic were things I never imagined could of happened, or been that bad. I can still remember as a boy, when JFK was assassinated, I saw it on the black and white TV and I walked outside and stared into the woods, and knew that I would be fighting that evil for the rest of my life.
The economic crash never happened all at once. It has been a rolling crash. What drives it is the very nature of debt money, debts build up, a recession or change in interest rates, causes some of that debt to become unstable – just like we saw with SVB – and this unstable debt starts to liquidate – which could snowball – but the central banks step in – and add liquidity saving the day each and every time.
The net effect is inflation, and thus the Jews have a perfect system to milk the Goyim forever. Each cycle brings new regulations, wars, repressions. With each cycle Jews consolidate their power over us, until we are slowly strangled like by a boa constrictor. Amerika is being slowly suffocated by this Jewish banking parasite without any violent revolution.
Yukon Jack–one of the characters in Tolkien, probably Elrond, says “the doom that I have deemed”, which is Tolkien teaching us some English, so a “doom” is a decision made by a powerful being. Naturally, I do not respect any of them
“Oh, the sky is about the fall. We are in for the great chastisement, the great ECONOMIC CRASH OF ALL TIME. The Great Reset and the UN Agendas are the only solution to our folly. Better stock up on that toilet paper once again.”
IT IS ALL FRAUD AND PSYOP TO TRANSFER [TO “TRANS”] CONTROL OVER VITUALLY EVERYTHING OF IMPORTANCE TO THE TO THE CABAL BEHIND THE BIS (Bank of International Settlements) FOR THE GLOBALIST NEW WORLD ORDER WHICH THEY OWN. Go back some 5 years and there were articles on the net showing that the BIS was not only behind the IMF, the World Bank, and our Central banks, but also behind the BRICKS project and financials system. It is all geared to psyop “TRANS” us – to transition us – into one global digital currency controlled by the same cabal which runs the present one with the US dollar the leading reserve currency. Global development, global trade, global resources all to be controlled by a one-world currency, and various enforcement measures – that is what is going on.
Check it out and see just how “independent” the BRICKS currency will be from the BIS.
Notice that Western governments are spending like mad everywhere, public works everywhere, buildings are still going up. Sure, there are financial problems for Joe and Jane worker and small businesses and various restaurant chains dubbed non-essential, but the major corporations are unperturbed. Stores are still filled with Chinese good selling like hotcakes.
Notice how people will just not connect the dots, do dumbed down with the official psyop beliefs they cannot put it together, that those very same power brokers in the Western financial system responsible for all of these alleged economic perils, are the same ones behind the UN Agendas, the WEF Reset, the BRICS, etc., the same people deliberately tanking our systems and the assets of the common people of the West whom those same common people are now “trusting” the same corrupt and bungling few to set up and imprison everyone in the world in their much larger Ponzi system.
@ Think About It on April 9, 2023 at 9:58 pm
You said it better than Nouriel Roubini,