The Path to Monetary Collapse
The comments below are an edited and abridged synopsis of an article by Alasdair Macleod
Few mainstream commentators understand the seriousness of the economic and monetary situation, ranging from a V-shaped rapid return to normality to a more prolonged recovery phase.
The fact that a liquidity crisis developed in US money markets five months before the virus hit America has been forgotten. Only a rising gold price stands testament to a deeper crisis, comprised of contracting bank credit while central banks are trying to rescue the economy, fund government deficits and keep the market bubble inflated.
The next problem is a crisis in the banks, wholly unexpected by investors and depositors. At a time when lending risk is soaring off the charts, their financial condition is more fragile than before the Lehman crisis. Failures in European G-SIBs in the next month or two are almost impossible to avoid, leading to a full-blown monetary and credit crisis which promises to undermine asset values, government financing and fiat currencies themselves.
We can now discern the path leading to the destruction of fiat currencies and take reasonable guesses as to timing.
Up for discussion: how central banks view the current situation; issues of credit; the golden canary; the path to fiat obscurity; and timing.