Central Banks Now Own 33% of All Global Sovereign Debt… Moody's Threatens US Credit Downgrade

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Central Banks Now Own 33% of All Global Sovereign Debt

Because who else would buy it?
You can get trapped in a liquidity event even when you hold something very valuable if you need to sell with urgency and the market for what you hold is thin. What happens when what you hold is worthless and the market for what you hold is nil?
The total assets of all central banks hit $16.4 trillion plus (an all-time high) and these banks now, collectively, own 33 percent of all the world’s sovereign bonds (someone/something had to buy ‘em) up from 14 percent before the ’08 crisis.
On CNBC, Rick Santelli’s question to Jim Bianco was, if the aggregate size of the world’s central banks is at an all-time high, and these banks have purchased a third of all government paper, will these banks be able to “normalize in size” (shrink) without “going through a lot more stock market anguish?” Bianco’s response was a flat, “no.”

Surely central bankers aren’t just speculating with funds created from nowhere? However, the once “lenders of last resort” are now engaging in social policies, boosting the collective wealth effect, while keeping the under-capitalized, over-leveraged, and less than competent operators in business.

www.mises.ca/inflation-has-central-banks-playing-musical-chairs/
‘WORSE THAN 2007’: Top Central Banker warns of looming wave of worldwide bankruptcies
www.telegraph.co.uk/finance/financetopics/davos/12108569/World-faces-wave-of-epic-debt-defaults-fears-central-bank-veteran.html
The world is drowning in debt, warns Goldman Sachs
www.telegraph.co.uk/finance/economics/11625406/The-world-is-drowning-in-debt-warns-Goldman-Sachs.html
MOODY’S THREATENS US DOWNGRADE DUE TO SOARING DEBT, “FISCAL DETERIORATION”

02/09/2018
Back in 2011, Standard & Poors’ shocked the world, and the Obama administration, when it dared to downgrade the US from its vaunted AAA rating, something that had never happened before (and led to the resignation of S&P’s CEO and a dramatic crackdown on the rating agency led by Tim Geithner).
Nearly seven years later, with the US on the verge of another government shutdown and debt ceiling breach (with the agreement reached only after the midnight hour, literally) this time it is Warren Buffett’s own rating agency, Moody’s, which on Friday morning warned Trump that he too should prepare for a downgrade form the one rater that kept quiet in 2011. The reason: Trump’s – and the Republicans and Democrats – aggressive fiscal policies which will sink the US even deeper into debt insolvency, while widening the budget deficit, resulting in “meaningful fiscal deterioration.
In short: a US downgrade due to Trumponomics is inevitable. And incidentally, with today’s 2-year debt ceiling extension, it means that once total US debt resets at end of day – unburdened by the debt ceiling – it will be at or just shy of $21 trillion.

galacticconnection.com/moodys-threatens-us-downgrade-due-to-soaring-debt-fiscal-deterioration/

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20 thoughts on “Central Banks Now Own 33% of All Global Sovereign Debt… Moody's Threatens US Credit Downgrade

  1. The reason is simple. When you take out a loan, then the lender demands security.
    Sovereign debt is the security that Central Banks demand from commercial banks, (although in some instances the banks will grab equities when no sovereign security is available).
    When the bank cannot meet the deadline, the Central banks are left with the paper.
    This is why overnight rates and a country’s credit rating is important. It reflects the ratio of paper to debt that a Treasury note is worth.
    What this means is that the banks cannot find the liquidity to re-purchase their securities from the Central banks.
    The risk is now sitting with the Central banks.
    When you realise that the interest rates are zero then you realise that all paper, currency, securities and equities are valueless.
    It is going to crash soon, US has taken the Weimar route and helicoptering money with no debt ceiling. The world’s debts can never, ever be repaid. There is not and cannot be enough production to place value on the outstanding paper.
    Unlike 1929, there will not be an economy strong enough to bootstrap the recovery.
    China and Russia (plus their satellites) will survive, but not in the same form as they are now. Can’t say the same for EU-US et al. They cannot stand alone. Critical resources are no longer created domestically.
    A week without electricity and they will die. Vulnerability to Large Power Transformers and EHV-PTs failure and inability to repair or replace will kill off in weeks or months.
    Have fun while it lasts. “Eat, drink and be merry, for tomorrow we die”

    • And US will threaten war because their economy crashed and will blackmail everyone in the form of “if you do not want war, give us money and resources”

        • “In economics, a free market is an idealized system in which the prices for goods and services are determined by the open market and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority.”
          This is the definition. I think it happens extensively today

          • People conflate ‘Free market” with ‘Capitalism’.
            Everyone has been so brainwashed that none of them could provide a definition or a description.
            The first thing that capitalists do is close the market with barriers to entry. “You want to sell Lemonade, little girl? Get a licence.”
            The world (of the West especially) is ruled by fear and greed. Once you leave those behind, then there is nothing that can rule you.
            “You only have power over people as long as you don’t take everything away from them. But when you’ve robbed a man of everything, he’s no longer in your power–he’s free again.”
            ? Aleksandr Solzhenitsyn
            “Do not pursue what is illusory – property and position: all that is gained at the expense of your nerves decade after decade and can be confiscated in one fell night. Live with a steady superiority over life – don’t be afraid of misfortune, and do not yearn after happiness; it is after all, all the same: the bitter doesn’t last forever, and the sweet never fills the cup to overflowing. ”
            ? Aleksandr Solzhenitsyn
            “Bless you prison, bless you for being in my life. For there, lying upon the rotting prison straw, I came to realize that the object of life is not prosperity as we are made to believe, but the maturity of the human soul.”
            ? Aleksandr Solzhenitsyn, The Gulag Archipelago 1918-1956
            “The individual has always had to struggle to keep from being overwhelmed by the tribe. To be your own man is hard business. If you try it, you will be lonely often, and sometimes frightened. But no price is too high to pay for the privilege of owning yourself.”: Rudyard Kipling (1865–1936)

          • I am pretty sure that if someone gets a loan or has the money and is willing to spend it they can open a factory that sells lemonade, they get the license, and of course you need a license but that’s not the issue. If you want it you can do it more or less. And sell what you make at whichever price you want. My phone costs 170 euro and I have to be hard pressed to find something that it can’t do but phones that cost 800+ euro do do but everyone sells them as expensive as he wants and people still buy them. That’s free market. And the same applies to not only telephone. Of course free market is associated to capitalism and not let’s say communism. I’m pretty sure that someone like you knows these already.
            Of course there is greed, everyone wants more, companies want more and more. Yesterday’s profits are not enough, we need more. It’s how the system works.

          • It is exactly the issue!
            The outcome of ‘Free Market’ and Capitalism is that always the end result is that one person – group owns everything and the rest own nothing.
            They do this by closing off the resources necessary for production and keeping them all for themselves.
            Bizos, Gates, Job, Ellerson all used the laws and deception to close out the competition. They bribe legislators and towns and countries to ensure that no one can compete.
            To start a Lemonade stand costs $400 – $500 (and you are only 10 years old) but what if you have an idea to improve the distribution of Electricity? What if you need $2 billion to compete with Ford or GM. Do you think that GM got a bail-out because of the ‘free market?
            What if you could show, as dozens have, that you can produce electricity from thin air? Everyone of them have either died or been silenced. (Check out N Tesla)
            What if you can show that Autism is the product of vaccination, or that cancer is curable by the use of Sodium Bicarbonate?
            What if you show that Holistic medicine cures Cancer?
            That medication is the cause of more deaths than all the illegal drugs, guns (legal or illegal) and all the road deaths? Do you think you life expectancy exceeds 1 week? What if you do not want to leave your farm, and want to continue to graze your cattle where the Corporation wants to mine Uranium?
            Freedom arises when people decide that there are more important things than ‘more’.
            Real freedom comes when you realise that ‘things’ are shackles not valuables.
            Unfortunately by the time you learn this, you also learn that each person has to learn it in their own way, and you quite honestly don’t give a damn.

          • Sadly while much of this is true, there is no solution in this. Without a solution ideas, concepts, ideology, breeds anger, hatred, and discontent. There must be a course of action towards a positive solution or it will lead to a revolution or a breakdown in the morale of citizens. It’s easier to revolt with your wallet, your ballot, and simply by removing yourself from a cycle of predation by capitalist constraints of a free society. With enough knowledge, citizens living in Capitalism can sway the pendulum far enough to carve out a place for the middle class. This must be done at the ground level, and efforts must be made to prevent large strategic interests from taking hold in locales. Marx laid the framework to analyze the capitalist landscape, sadly many have taken his knowledge to extremes and tried to use it as a path to power. As long as the Globalists don’t destroy America’s Constitution, or render it null and void by placing proxies in the courts, and our leaders …”don’t squander our labors…” T.Jefferson, Americans will have an opportunity to prosper.

          • Sadly while much of this is true, there is no solution in this. Without a solution ideas, concepts, ideology, breeds anger, hatred, and discontent. There must be a course of action towards a positive solution or it will lead to a revolution or a breakdown in the morale of citizens. It’s easier to revolt with your wallet, your ballot, and simply by removing yourself from a cycle of predation by capitalist constraints of a free society. With enough knowledge, citizens living in Capitalism can sway the pendulum far enough to carve out a place for the middle class. This must be done at the ground level, and efforts must be made to prevent large strategic interests from taking hold in locales. Marx laid the framework to analyze the capitalist landscape, sadly many have taken his knowledge to extremes and tried to use it as a path to power. As long as the Globalists don’t destroy America’s Constitution, or render it null and void by placing proxies in the courts, and our leaders …”don’t squander our labors…” T.Jefferson, Americans will have an opportunity to prosper.

          • “Oh look, another flock of pigs just flew over the Empire State Building.”
            “The few who can understand the system (check money and credits), will either be so interested in it’s profits, or so dependent on its favors, that there will be no oppositions from that class, while on the other hand, the great body of the people mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear its burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests.” — Rothschild Brothers of London
            “The real rulers in Washington are invisible and exercise power from behind the scenes.”
            Felix Frankfurter (1882-1965), US Supreme Court Justice, (1939)
            2 Timothy 3 (1-5)
            1 But mark this: There will be terrible times in the last days. 2 People will be lovers of themselves, lovers of money, boastful, proud, abusive, disobedient to their parents, ungrateful, unholy, 3 without love, unforgiving, slanderous, without self-control, brutal, not lovers of the good, 4 treacherous, rash, conceited, lovers of pleasure rather than lovers of God— 5 having a form of godliness but denying its power. Have nothing to do with such people.
            It is far too late and the populace far too stupid (thanks to universal fluoride) to reverse.
            Mad Max and Skynet await.
            In my next incarnation I have requested a planet far far away. I do not care if I have 16 legs and 7 eyes.

          • I like Kipling’s quote. I prefer: Galatians 6:7 “Do not be deceived: God cannot be mocked. A man reaps what he sows.”

        • “In economics, a free market is an idealized system in which the prices for goods and services are determined by the open market and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority.”
          This is the definition. I think it happens extensively today

      • The US WILL go to war!
        They have to have someone or something to blame.
        The outstanding debt will be renounced and the assets of ordinary people will be seized.
        It is not Russia’s fault or China’s fault and NK could not cause a mosquito to have a problem but they will be blamed.
        If there is no-one to blame, then the American people will realise that they have been screwed. By blaming Russia, then the politicians, bankers and corporations will escape. People are really that stupid. Look how many voted for Clinton. Look how many voted for Trump.
        A quote from a 1924 edition of the American Banker’s Association not intended for the public sums up what is currently happening all around us:
        “Capital must protect itself in every possible way, both by combination and legislation. Debts must be collected, mortgages foreclosed as rapidly as possible. When, through the process of law, the common people lose their homes, they will become more docile and more easily governed through the strong arm of government applied by a central power of wealth under leading financiers. These truths are well known among our principal men who are now engaged in forming an imperialism to govern the world.
        By dividing the voter through the political party system, we can get them to expend their energies in fighting for questions of no importance.
        It is thus by discreet action we can secure for ourselves that which has been so well planned and so successfully accomplished.”
        Bill Clinton once reportedly told senior White House reporter Sarah McClendon,“Sarah, there’s a government inside the government, and I don’t control it.”
        Trump has been chosen as the front man in the war between the MIC and the Banker-CIA-Corporations.
        It is a war to the death (of millions of innocent bystanders).
        “The issue which has swept down the centuries
        and which will have to be fought sooner or later
        is the people versus the banks.”
        Lord Acton

  2. I believe I have a solution for the social, financial, and political worldwide. I am not affiliated with any group. I am just doing my job as a human being who really want the world a better place for all. We now process technology and knowledge to make it happens. This would not be possible 10 years ago. Please visit Hanomy.com and download Hanomy Manifesto. Numbers work and now need the will of the people around the world to want it. 2nd edition is coming soon after long delay. Thank you for your time.
    Highlights of Hanomy:
    • Fundamental human needs met throughout life’s existence
    • Basic human rights observed everywhere
    • Sovereign debts worldwide are settled and eliminated
    • Upheld liberty and freedom
    • Financial contributions drawn from a portion of idle/unutilized money
    • No taxes on income, profit or spending
    • Interest charges and usury practices abolished
    • Power of money creation where it belongs – the people
    • An end to the fractional reserve system
    • Upheld free market principles (true capitalism but with social responsibility)
    • Decreased or dissolved inflation and hyperinflation
    • Reduced income inequality
    • An end to corporate welfare
    • Advanced technology benefiting humanity
    • Freedom of time for quality of life and caregiving
    • Prohibited conditions for authoritarianism
    • Preserved sovereignty and respected borders
    • An end to “modern day slavery” (this includes you)
    • Improved care of the environment and world resources
    • A world we’re proud to claim and pass along

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