From the New York Times:
The sovereign debt crisis would seem to create worry enough for European banks, but there is another gathering threat that has not garnered as much notice: the trillions of dollars in short-term borrowing that institutions around the world must repay or roll over in the next two years.
The European Central Bank, the Bank of England and the International Monetary Fund have all recently warned of a looming crunch, especially in Europe, where banks have enough trouble raising money as it is.
Their concern is that banks hungry for refinancing will compete with governments — which also must roll over huge sums — for the bond market’s favor. As a result, credit for business and consumers could become more costly and scarce, with unpleasant consequences for economic growth…
This is why Keynesian pinheads are calling for more money printing by central banks. Desperate to avoid a liquidity crisis which will simply crush the world economy at a blow, banksters and bureaucrats are hoping to sucker the world in to picking the pockets of the working poor and middle class for another round of banker bail outs. I bet they get at least part of what they want – they will steal more from us, but I don’t know if they’ll muster the political will to fend off the crash for, say, another year.
And “fend off” is all they can do – they can’t stop it. The fact of the matter is that there is too much debt. Heck, there was too much debt before the 2008 crash, and all we’ve done since then is pile huge amounts of new debt on our economic grave yard. The more they do this, the worse the crash will be, the longer it will last and the longer it will take to build our way out of it.
So, they might get part of what they want and they might put off the day of reckoning by six months. Or, they might not – so much debt has to be rolled over that even a great deal of printing might not do the trick. It might, as it turns out, signal the collapse. Only time will tell on this – as we can’t audit the Federal Reserve, we don’t really know what they – and the rest of the world’s central banks – are up to.
There is not much we, the people can do about this at the moment. The party in power is made up of people who are blind to the facts, or bought by the banksters. We’re just along for the ride – but we can pledge ourselves to never allow this to happen, again. Debt is bad – and we must, in the long run, prohibit our government from borrowing against our future. That is the long-term financial fix.
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