Today former US Treasury official, Dr. Paul Craig Roberts, warned King World News that a coming mega-collapse will terrify people around the world. He said the cause of this mega-collapse will be “a complete and total failure of the United States government.” Below is what Dr. Roberts had to say in this shocking interview.
Eric King: “Dr. Roberts, as you know KWN interviewed the man who was called upon to execute QE1,
and he said the Fed’s balance sheet was at “$4.4 trillion, compared to
$800 billion pre-financial crisis. So this is really uncharted
territory that I find quite shocking.”
“Most of it has been
stuck in the banks because the banks are so busted they can’t afford to
lend, and the consumers are so busted they can’t afford to borrow.
So
the whole purpose of quantitative easing was to support the balance
sheets of the four or five large banks. When the Fed buys
Mortgage-Backed Securities or Treasuries, it raises the price of all
debt-related derivatives. And since these banks have trillions of
dollars of these things on their books, what the Fed has done with
quantitative easing is to support the balance sheets of the banks.
In
other words, no corrective action has been taken. The situation today
is as unstable as it was when the financial crisis broke. At some point
something will break. The consequence of that balance sheet, the
consequence of all the new creation of debt and dollars on the exchange
value of the dollar, will lead to the United States facing an
extraordinary crisis. So when it breaks I don’t know, but what is there
now is not stable, it’s not tenable.”
Eric King: “When you say the United States will face an extraordinary crisis, how bad will that be?”
Dr. Roberts: “If
the dollar takes a substantial tumble in the foreign exchange markets
because people realize it’s a cooked currency, and depart, the import
prices in the United States will rise dramatically. And people who
already can’t pay their bills will be pushed to the wall.
So I
think you could have massive social instability, starvation, and massive
homelessness. The potential for a real catastrophe is there. And
instead of trying to deal with this issue, the banks, since they control
the Fed, the Treasury, and the financial regulatory agencies, what they
have done is to protect the few banks by engineering a bigger crisis
for the future.
And as the person you interviewed, the man who implemented QE1, said, we’ve never seen anything like this before. This is a new development. And so it’s very difficult to predict the outcome of something we have never before witnessed.”
Eric King: “As the endgame has continued to unfold, where are things now versus where you saw them a year ago?”
Dr. Roberts: “Worse.
And what’s amazing to me is that it’s been able to go on for so long.
It’s just really amazing that people still go into the stock market even
though it’s up because the corporations are borrowing money from banks
to buy their own shares.
The
bonds are at negative real interest rates when extraordinary debt and
money is created. None of this makes any sense -- none. None of it
would have been possible at any previous time in history. And we can
add to that, nobody knows the consequences of these extraordinary
derivatives that a few big banks have.
We
are talking about derivatives that are some multiple of world GDP. They
can’t possibly be covered. So I have never seen anything like it.
These types of developments that produced this mess would have been
strictly illegal in my day. So I don’t know what to make of it.
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