Alternative Visions - Italian Bank Crisis and Global Economic Instability - 07.29.16

$2 trillion in Euro-wide NPLs.  How global central bank monetary policies of more and more QE, negative interest rates, and now talk of ‘helicopter money’ to follow are wrecking the global capitalist financial system. Bank earnings, pension funds, insurance companies, junk bond markets are all flashing ‘red’ in the wake of central bank zero and negative interest rates. Meanwhile oil prices have begun a new ‘leg down’ in price. China continues to struggle with its ‘rotating financial bubbles’ in stocks, wealth management and property markets. And Italian-Europe banks grow increasingly fragile. Given this scenario, Jack predicts a coming inverting of policy in 2017, as the US economy slips into recession, the UK and Italian banks pull Europe into recession, and Japan continues its contraction.  Interest rates will be raised by central banks to prevent a financial crisis. That means a further slowing in the real economy—requiring fiscal austerity policies to give way to fiscal stimulus to offset the effect of interest rate rises by the Fed and other central banks.