Author and financial expert Nomi Prins says we are now in a financial meltdown … and the volatility is going to increase.
The former Goldman Sachs banker says “I said 9 or 10 months ago, it hadn’t happened yet, but it should happen because of the instability of a system that is supported by central bank manoeuvres and not really anything organic and leveraging and reaching for yields in places like oil and natural gas and other places on the virtue of cheap money. . . . It kind of boggles the mind. This QE is epic. It’s historic.”
“It is larger and more insane that ever in history. It is pan-global. The reason that things have kind of stayed in place is because there was enough cheap money coming into the system and enough corporations getting it . . . that really kept the markets artificially buoyed by virtue of this cheap money coming in. That’s kind of coming to a stop. The ECB QE will help provide the markets and banks some solvency for a while and some buoy for a while. So, therefore, there is still a little bit coming in.”
More financial chaos coming?
Prins goes on to predict, “The volatility is going to increase. Last year, we had volatility spikes in August, October and December. This year, we’ve already had a spike in January. So, the shocks are coming in more closely and the downsides are deeper. That’s why we are transitioning down. At the end of this year, we will have a lower market. It will start to come apart, and these shocks will have a more intense volatility and chaotic impact over this year. That will basically start to unravel all of this money that’s been dumped and the way in which this money has held up a system that should not be held up. It has no inherent value.”
On the U.S dollar getting suddenly crushed, Prins, who is a former high ranking Goldman Sachs banker, says, “It will be weakened finally because of the fact of all these QE combinations are somewhat playing themselves out. There is nowhere else to go. However, the reason it stayed up and the reason it will continue to stay up for a little bit longer than most folks are saying. Again, it’s not because policy is good, not because so much debt on the books of the country is good, not because our GDP ratio relative to debt is good. All those things are horrific. Using cheap money to leverage a system is horrible. Using money to fix a banking system that doesn’t work is not a good policy. It hasn’t trickled down to the average person . . . but what the dollar has going for it is the collaboration of the government, the private banks and the Fed is the fact they had a first mover advantage. The QE, the dump, the policies were bad, but they were first. So, what’s happened is the dollar is not propped up by good economics. It’s propped up artificially by all of these maneuvers, but everything else is doing so badly and will continue to do badly that (the dollar) it will have a relatively better value for now. . . . I think the dollar will get weaker, but I don’t think we are going to see that plunge in the very near term because every other country is struggling right now. That’s why there is still an advantage to the dollar and, again, not because our policies dictate that and not because this extra debt is smart.”
On gold, Prins contends, “This shift to the dollar going down, I think, will be more gradual. For the same reason the dollar stays strong is the same reason gold has done okay very recently but hasn’t had this major outbreak. . . . Gold will increase this year–also gradually for the same reason the dollar will not dump but could decrease gradually as QE and all these maneuvers play out. I don’t really think this is going to be that breakout year. The markets are going to go down because of the end of all this artificial aid, but we also have been underestimating the aid that gets continually dumped into the markets and into these banks. That’s where the timing is critical to look at. . . . There’s going to be a negative market. There’s going to be a downward impact on the markets. There’s going to be an upward impact on gold. All of that will happen. It’s just not going to be as huge this year. It’s going to be a more gradual working into that this year.”
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