Thursday, February 9, 2012

Warren Pollock on Why Gonzalo Lira is Wrong About Bank Holidays

Warren Pollock dissects Gonzalo Lira's recent interview with Max Keiser and discusses his disagreement with Lira on the issue of bank holidays.  Rather than a bank holiday, Pollock agrees with Sinclair and The Doc that we will see QE to Infinity....AND BEYOND!!!

A bank holiday would not be strategic thereby raising red flags, it would be reactive. Frozen credit, a shortage of collateral, too much leverage, too many derivatives going bad, and an unproductive economy means that only a fraction of savings is available to every dollar of bad debt. Presently, We have circular treasury purchases (quantitative easing and LRTS) negating the idea of bond vigilantes. Given the risk profile of the US, should a 10 year bond yield less than 2%. NO.. What is happening is the stealing of savings. Ben Bernanke, Politicians, European central banks can print and liquify all they want but it will not replace the trillions outstanding in bad debt. The dogs have not learned their lesson. We are in the same crisis but worse than we were in 2008.