Central banks lose control: Schäuble fears global financial crisis

Deutsche Wirtschafts Nachrichten: Wolfgang Schäuble, the enormous amounts of money scary, the central banks have pumped into the markets. He asks the central banks to collect the cash back. However, these have not the slightest idea how this will go. The central planners dawns on you that the game is likely to lead to banking crash. Therefore, the EU wants to participate savers to banks crashes to avoid a system collapse.

The situation on the stock markets has become quite confusing. (Graphic: onvista.de)

At the meeting of G7 finance ministers said German Finance Minister Wolfgang Schaeuble, the finance minister "increasingly concerned" about "the relative high level of liquidity" were. This was communicated to the central bank chief. Bundesbank chief Jens Weidmann assisted and said that monetary policy can not solve the structural problems. According to Reuters, he said, would last The longer the period of low interest rates, the greater the risk to stability.

On Friday, the U.S. Federal Reserve (Fed) had warned that the banks could buy with the free money to many risky assets on credit. Ben Bernanke said that by lead with the systemically important banks stress tests, what would happen to the banks at a interest rate increase, reports the FT.
The WSJ writes on Saturday that the Fed reportedly planning a rate increase. Several Fed bankers told the Journal that the interest should not be kept at a low level. They hinted that the Fed could return their purchase program for U.S. government bonds. Basically, the central bank, however, says that she has no idea how they could get the global flood of money into the handle. The statements are contradictory and vague. However, a majority of economists said the WSJ that they expect a rise in interest rates by the Fed.
The Americans may consider doing so, because the ECB and the Bank of Japan have strengthened their money printing activities. Schaeuble said that they had Japan noted that the extreme actions of the Bank of Japan have global consequences. Mario Draghi had hinted this week that the ECB could cut interest rates again soon.
At the G7 meeting, all participants tried to emphasize that there should be no currency war.
This may even be true. However, it is difficult for the central planners to prevent such.
For indeed, there has been something of a global money printing by the coordinated policy, secret and manipulative activities of international banks. This means that all states are chained together as the euro countries in the euro.
The international financial casino, meanwhile, tries each to wander to where the money is cheapest. Because it is always gambled on credit, this is a dangerous development.
Especially for large international investors, the situation is getting confusing. The stock market noise with new highs, looks like a snowball system at its peak.
After the peak, however, is the most profound event.
Bernanke acknowledged that many stock prices are purely speculative and sometimes have nothing to do with the fundamental data.
The thing is quite simple: If you are unable to central banks, liquidity again properly collect a large-scale inflation is inevitable.
However, if the central bank to raise interest rates, there is acute at many banks crash risk: you have to pay higher interest rates. With uncertainty in the markets, it is in this case to deflation - and thus to a massive loss of value in existing assets.
In any case, the great nervousness among central bankers and policy explains the frantic efforts of Europeans hastily rooms to a set of rules for banking failures: Many banks would collapse under changed rules of the game overnight.
The Fed says it wants to implement their restrictive measures gradually to prevent shock.
So the doctor speaks before a planned rehab for a drug addict.
An increase in interest rates would send a shock wave through the bond market: the U.S. would quickly bankrupt if interest rates rise.
Similarly, the European debt states.
Almost everywhere, massive capital flight would use.
The contradictory statements of the central planners do not increase at a heightened confidence.
Hand in hand with state bankruptcies banks would go bankrupt: Because the banks have also used the cheap money to buy government bonds. Thus, the bonds of Spain, Portugal and Italy have recently reported record lows - even though the economic situation and the first legally outlook for the coming months are extremely bleak.
The result of any development will be a massive expropriation at all levels. Compulsory levies, bailouts, tougher tax investigation and the taxation of stock market transactions to mitigate the impact.
However, he will be hard especially for those who have something real to lose. However, these are not the rich with their yachts, but all those whose savings are invested in bank products. Particularly affected the pension fund will be.
The next financial crisis will not be solved by more government bailouts. The legislation will be provided together with the banks in the center of the rescue operations.
The rescuers are the savers and investors be that until a few years ago in a dream not have imagined that their money is nowhere more uncertain than in the bank.

Source