IMF Warned 🔴 FED RATE HIKE? - BEAR MARKET - GLOBAL COLLAPSE COMING Feb 2019

The IMF Fears Political Rage Will Block Rescue By Fed In Next Crisis

The Trump administration might ask why it should “bail out” the Europeans who have been less than friendly to this White House. Here’s more…The International Monetary Fund has warned that the system of global cooperation that saved world finance in the 2008 crisis may break down if there is another major shock or a deep recession.

David Lipton, the IMF’s second-highest official, said it is unclear whether the US Federal Reserve would again be able to extend $1 trillion of dollar “swap lines” to fellow central banks — the critical measure that halted a dangerous chain-reaction after the collapse of Lehman Brothers and AIG.

“I fear that if at any time we have a worse than garden variety recession there will be anger and limitations in the way governments can respond,” he told a group at the World Economic Forum in Davos today.

“If there is a substantial crisis we may need central banks to act again in an extraordinary way. For the Fed this requires a fiscal backstop from the US Treasury, and at the beginning there may be some reluctance. I wonder whether they will be so willing to extend the swap lines,” Mr Lipton said.

It is a polite way of saying that the Trump administration might ask why it should “bail out” the Europeans who have been less than friendly to this White House, and why they should rescue the rest of the world. By the time the explosive consequences became clear it would be too late.

“So we have got to be very careful. There must not be unforced errors. We must ensure that the next recession when it comes is a garden variety,” said Mr Lipton, a leading figure in regulatory circles.

The lines are vitally needed because the world has built up $12.8 trillion of offshore dollar debt outside the Fed’s jurisdiction.

European, Japanese, and Canadian banks, among others, borrow on the capital markets at short-term maturities for worldwide lending in dollars. These markets can freeze up suddenly, as they discovered in October 2008.

Their own central banks are unable to print dollars and mostly have insufficient dollar reserves to provide emergency liquidity and stabilize the financial system in such circumstances. Only the Fed can act as the ultimate lender-of-last resort to the globalised dollar economy.

Mr Lipton said there was deep residual anger from the 2008 crisis. “People are hurt and they are less impressed than we that we did a clean-up afterwards,” he said.

He fears a nasty cocktail in the next downturn because much of the damage is likely to come from hidden leverage in asset management companies, with asset slumps hitting household wealth directly.

Mark Carney, the governor of the Bank of England, said at a separate Davos session that banks were now much safer than a decade ago, but risks of potentially systemic scale were building up elsewhere.

He raised a red flag over the money that has flooded into asset management, driven by a hunger for high yields after quantitative easing and low interest rates made it hard to generate returns.

The Achilles’ heel is the buildup of $30 trillion of assets held in funds, which are supposed to offer daily liquidity to investors but are invested heavily in underlying assets that not liquid. These assets are hard to sell “even in good times and very illiquid in bad times,” Mr Carney warned.

It is a classic example of borrowing short to invest long — the perennial cause of crises over the ages. There may also be further icebergs hidden from view. “Is there additional leverage in these entities that may add to the dynamics? That’s one of the big issues in global finance at the moment,” 

Economic Slowdown: Tesla Announces 2nd Round of Mass Layoffs & Reduced Production

Did Elon’s recent email just signal the beginning of the end for Tesla? The email was not positive. Not one bit. Here are the details…Tesla’s CEO, Elon Musk sent an email to all employees at 1:20 in the morning and it could very well be the signal of the end times for the company. The email was not positive in tone and things are not looking good for Tesla.

After highlighting Tesla’s numerous accomplishments over the past year in the email, Musk got down and dirty, announcing another round of job cuts. This time reducing the number of full-time employees by about 7 percent. According to The Washington Post,those thousands of job cuts come only seven months after Tesla laid off another 9 percent of its workforce.

Musk says that the jobs cuts are necessary in order to help the company meet the unique challenges it faces. Challenges like “making our cars, batteries, and solar products cost-competitive with fossil fuels,” products that Musk admits “are still too expensive for most people.”  Musk also acknowledges that since Tesla is competing “against massive, entrenched competitors…[employees] must work much harder than other manufacturers to survive.” According to INC, all of this hard work is worth it, Musk says, to support the “mission of accelerating the advent of sustainable transport and energy, which is important for all life on Earth.”

Musk’s email continued saying:

“There are many companies that can offer a better work-life balance, because they are larger and more mature or in industries that are not so voraciously competitive. Attempting to build affordable clean energy products at scale necessarily requires extreme effort and relentless creativity, but succeeding in our mission is essential to ensure that the future is good, so we must do everything we can to advance the cause.”

And in order to advance the cause of cleaner vehicles, Musk will be terminating more employees and slowing production of cars which could help reduce emissions.

Washington Post further reported that Tesla earned a record quarterly profit last year. However,  Musk warned this month that its most recent quarter would “with great difficulty, effort, and some luck” likely only show “a tiny profit.” The company will offer more detail when it reveals its newest quarterly financial report next week, a spokesman said.

Tesla is just one company that has sounded the alarm of profit loss signaling a slowing or stagnant economic situation.

The Fed Is Desperate! – This WILL NOT End Well!

The Fed is showing obvious signs of desperation, but the dollar crisis it is only a matter of time away. ALL fiat currencies fail. Always…Josh Sigurdson talks with author and economic analyst John Sneisen about the most recent moves by the Federal Reserve to desperately prop up the US economy as it reaches its inevitable end.
Janet Yellen, former chair of the Fed said recently that it’s very likely that the Fed has made its last interest rate hike of this cycle. Interestingly, in 2017 she claimed we wouldn’t see another financial crisis in our lifetime and then followed that up in 2018 by saying we may be able to see another financial crisis. Now it appears she’s just covering herself for the inevitable crash of the USD as it loses faith and countries around the world swap out of it.
Team this with the inverting yield curve, the everything bubble world wide, the bankrupt banking system and more, it looks like we are seeing the beginning signs of the greatest crash in world history as the dominoes start to fall.

Jerome Powell has also been all over the map and the Federal Reserve is showing obvious signs of desperation. It’s only a matter of time. The longer it’s put off, the worse it will be. All fiat currencies eventually fail. They always have, they always will.

What we can do is simply decentralize everything, be self sustainable, financially responsible. We need to be educated and we need to rule ourselves!