Related info:
– The ‘Big Reset’ Is Coming: Here Is What To Do
– Brodsky On “Gold Monetization And The Big Reset” (ZeroHedge, June 8, 2012):
Macroeconomic Problems
1) The global banking system is functionally insolvent and will fail without exogenous policy action*
- There is one, interconnected global banking system linked by global financial markets and coordination among currency boards and central banks
- In the current banking system model, debts due tomorrow are serviced by newly-incurred debts today (which create deposits)
- Stagnant or declining nominal global asset prices since 2008 have stressed bank balance sheets
- Loan book marks remain at substantial premiums to:
- The present value of their cash flows in real terms
- Liquidation prices at current or higher interest rates
- Central bank easing and asset purchases to date have only tempered the rate of asset price declines
- Current adversity among European banks directly impacts global commerce and finance
*Bank balance sheets can deleverage either via nominal write-downs of assets, (leading to outright failure/insolvency as tangible equity is extinguished), or through nominal increases in system reserves via base money inflation (provided by central banks as they expand their own balance sheets)