When Artificial Debt Buying Stops Things Will Come Apart-Nomi Prins

By Greg Hunter’s USAWatchdog.com

Best-selling author and former Wall Street investment banker Nomi Prins says no matter what you are told, “For all practical purposes, quantitative easing continues here as well as zero interest rate policy, and capital is available.  The ECB (European Central Bank) has just announced their next version of quantitative easing (money printing) . . . of course, there is the fear that, at some point, there is just no powder left in that gun, and at some point, it will go down.  The volatility you are beginning to see is indicative of that coming apart.  There is nothing else that has been propping up the market, and when there is nothing left to prop up the market, the markets are going to come apart.  It still hasn’t happened yet, but the enhanced volatility is a sign we are moving in that direction.”

On the Greece debt crisis, Prins explains, “Greece is saying look, we don’t want to pay this back, not because they are a deadbeat country, but because the terms to begin with were absolutely awful.  They were awful for Greece, and they would be awful for anyone.  They are loan shark terms to one of the member countries of the EU.  That is what they were, and that is what they still are. . . . Greece is saying look . . . debt on these terms was and continues to be impossible.  Meanwhile, the ECB, while trying to stomp Greece further into the ground, is buying covered bonds from Deutsche Bank.  It has the money, or the availability to create the money, to buy bonds.”

Prins goes on to say, “All of these banks have been subsidized by quantitative easing (money printing).  It is subsidized by central banks and government policy.  This is a power policy.  It is not an intelligent economic policy.  It’s not for the benefit for the people on the ground. . . . These big banks are the identity of political power as well as financial power, and central banks have been coming on for more than half a decade to sustain them.  That is what is happening now. . . . All of these (European) banks have mega derivatives positions, as do the U.S. banks which are also being propped up.”

So, is anything in the financial sector actually fixed?  Prins contends, “We have many trillions of dollars and government policy trying to basically cover up the holes in the entire financial system that could create another Lehman or multiple Lehmans.  So, we have a white wash, or a hole in the wall, that’s been plastered over many, many, many times.  The hole is still there.  The danger is still there.  The co-dependency is still there.  The leverage is still there. . . .It all looks like there has been this cosmetic shift supporting these banking institutions rather than supporting, from the bottom up, the economies of these countries.  That has the effect of creating deterioration in any of the assets that these banks are still financing . . . . “Buying securities does not help people get jobs.  It does not help industries to continue to innovate.  It does absolutely nothing for spreading a foundation of solid economics throughout the population.  All it does is make banks look better and cover these holes.  Even with all that, holes continue to pop up and be visible, and that indicates a much larger problem. . . . People don’t have money.  Even if the headline unemployment looks good, the reality is the jobs being created do not pay well.  So, people don’t have any money.”

In closing, Prins paints a grim picture by saying, “When there is no artificial external buyer for debt, that’s when things will fall apart.”

Join Greg Hunter as he goes One-on-One with Nomi Prins, best-selling author of “All the Presidents’ Bankers.” 

(There is much more in the video interview.)

After the Interview:
Nomi Prins is already working on a new book.  She does not have a title yet, but it is about commodities and their relation to financial policies and political power.  Prins says she will cover everything from physical commodities to electronic commodities such as crypto currencies.  If you want to buy a paperback copy of  “All the Presidents’ Bankers,” please click here.