Analyst/trader Karl Denninger thinks the Federal Reserve’s $3 trillion balance sheet could blow up the economy. The Fed is adding $85 billion to it every month! Denninger says, “The larger the balance sheet gets, the more powder Bernanke is piling into the brick house. So, instead of a firecracker, he’s got a great big bomb in there now.” Denninger asks, “What happens when you have to sell to raise money to pay the interest on the excess reserves.” The “excess reserves” is money the big banks are holding at the Fed—for now. Denninger predicts, “The only way Bernanke wins his bet on not getting trapped by this is if we are Japan . . . that means no economic growth and no recovery.” Denninger goes on to say, “The only thing that holds this whole ball of string together is the federal government running deficits, and we have this little problem called the sequester.” Join Greg Hunter as he goes One-on-One with Karl Denninger of Market-Ticker.org.
Greg is the producer and creator of USAWatchdog.com. The site’s slogan is “analyzing the news to give you a clear picture of what’s really going on.” The site will keep an eye on the government, your financial interests and cut through the media spin. USAWatchdog.com is neither Democrat nor Republican, Liberal or Conservative. Before creating and producing the site, Greg spent nearly 9 years as a network and investigative correspondent. He worked for ABC News and Good Morning America for nearly 6 years. Most recently, Greg worked for CNN for shows such as Paula Zahn Now, American Morning and various CNN business shows.