Hey There Income Hunters,
As I’ve been preparing for the Digital Currency Arms Race coming up this Thursday at noon Eastern, I’ve noted one major difference between the Federal Reserve and the European Central Bank.
The Fed can’t go bankrupt because it can print unlimited amounts of credit to fill any holes in the banking system — something it proved during the Lehman Brothers collapse.
The ECB, on the other hand, doesn’t have that capacity. It’s only tool is the European version of quantitative easing, and lately, as rates have risen dramatically, even that’s not working.
The situation has become so serious that ECB President Christine Lagarde recently doubled the rate of bond buying within the Eurozone to keep rates under control — to little avail.
Lagarde, incidentally, has never struck me as a “market” person. She always seemed more comfortable as a high level politician …
Now, she needs to quickly make some decisions, and the one thing she can do that the Fed can’t, is use gold as a tool for eliminating all the bad debt that is being accumulated.
As for what that means at home, on Thursday, I’ll reveal how far the U.S. has fallen in the rankings of holding “real money” — and I’ll warn you now, it’s startling.
Before that, today, I’ll share the dire situation in Europe, and how events there are setting the stage for an imminent U.S. dollar collapse.
Rising Interest Rates in Europe
Can you believe rates have risen by .50% in Germany and are still negative? Meanwhile, the Germans are buying tons of assets via QE — only come out and warn of elevated financial stability risks.
What do they expect will happen when you pump all that money into the system?
This appears to be getting pretty serious as $7.2 trillion in securities sits on Germany’s balance sheet losing value as rates rise:
Cutting Out the Banks?
It’s becoming increasingly clear that one of the few choices the ECB and Fed have is cutting out banks and moving quickly to launch a digital currency.
The problem is changing a system that has been in place for a hundred years is like turning the Titanic — and we all know how that worked out.
Without the ECB in its corner, however, the Fed will be lost — along with its vision and for a western bloc of nations coming together to launch a digital currency.
The Fed doesn’t have enough gold to use as a tool for devaluing debt, so it has to continue its insane balancing act of just enough inflation to devalue the currency and debt — without losing the confidence of their consumer.
When I look at the situation most central banks face today, I can only come to one conclusion:
Real Money will save the day for everyone and the ones that move the quickest will win.
Bring It Home
The Digital Currency Arms Race is on.
The end game is taking shape and the players are positioning for the winning move …
The clock is ticking and the deadline is approaching. More on that Thursday at noon eastern.
Until then …
Live and Trade With Passion My Friends,
Griff