Jim Rickards, who is well known as an author and speaker, just issued a dire warning in a post first uploaded to DailyReckoning.com (where he regularly submits articles) and then uploaded to ZeroHedge this afternoon, titled 'On the cusp of a global liquidity crisis'. In it, he posits that we are facing a rare convergence consisting of a global liquidity crisis as well as a severe recession.
In his post, he explains how central banks around the world are facing a liquidity crisis as a result of the grossly over-leveraged derivatives market. In a nutshell, the Federal Reserve has printed $6 Trillion as part of its monetary base while the notional value of all the derivatives of all the banks in the world is estimated at $1 Quadrillion. That's one thousand trillion dollars. That's a leverage of 167:1 against the total amount of FED money printed.
But it doesn't end there. The FED's own money supply is itself highly leveraged with only about $60 Billion of actual capitol which means the FED's own balance sheet is leveraged 100:1. In terms of actual FED capitol, the derivatives are really leveraged an eye popping 16,700:1.
It's clear we're in a recession now. What happens if there's a margin call in the derivatives market during this time? Things could blow up quite quickly. I recommend you check out his article. He states there are signs to let us know ahead of time before things start falling apart. The biggest sign is the convergence of two separate crises, a recession and a liquidity crisis happening at the same time.
On a related note, another article popped up on Zero Hedge earlier in the day titled, 'Central bank losses make them buy record amounts of gold'. Rickards too mentions about the central bank gold buying spree of 2022. What do they know that they're not telling us. I think Rickards' article hits the nail right on the head.
If central banks are jumping over each other snapping up as much gold as they can (more than 600 tonnes in 2022), is it because they expect a currency or liquidity crisis? Or, as Rickards' suggests, they are preparing for the derivatives market to blow up. If it does happen during this year's recession, it could be a double or triple whammy to the economy and it would signal that a severe liquidity crisis is directly ahead of us.
Consider diversifying and investing a portion of your savings with precious metals. If there's anything that provides instant liquidity, it's gold and silver and it could come in handy when everything else falls in value. During the Great Depression of the 1930s, the stock market lost 90% of its value while home prices collapsed.
Hey did you know, there were more millionaires minted during this time than any other time in U.S. history? Those guys were on the winning side because they understood how to maneuver over and around the hurdles of struggling that so many others had suffered through.
I want to be on the winning side too, not the losing side when we reach this convergence because I believe, like Jim Rickards that it is coming. Every month, I make a small purchase through OwnX and each time, I add a couple of ounces of silver to my pile. I don't even notice the money going out of my account but the cool thing is that i really just traded fake money for real money.
Consider diversifying some of your wealth into precious metals.
Peace and Love to everyone.
Earn free Bitcoin Satoshis using CryptoTab Browser.
Purchase any precious metal at OwnX.
Secure your crypto in a private wallet - Ledger Nano X
Support free speech - join Rumble today.
Earn TFuel watching livestreams on Theta tv
Bitify - Buy and Sell Bitcoin marketplace
Subscribe to my blog and hit the 'like' button if you enjoyed this post. Tips are always appreciated.
Check out some of my previous posts.
Welcome to 2023... and more surprises?
Russian oil for gold a real possibility in 2023.
Bankrupt Bitcoin miner Core Scientific approved for $37.5M loan.
When gold went to 87 trillion marks.
My first Etherium transaction from PublishOx to my cold storage wallet.
Gold and silver's performance since year 2000 will surprise you.
