When Draghi (Ex Goldman Sachs and CEO of the European Central Bank) and Bernanke decided that printing infinite billions of worthless digital numbers was the way to go they started the final countdown to the end of our current fiat financial system. Here is what their nightmare is. Mine is the billions of us who will starve in the foreseeable future if we don’t get rid of these parasites.
Ben Bernanke and Mario Draghi must be absolutely terrified.
These two men, in the last two weeks, have both initiated open-ended bond buying programs. The purpose of these programs, aside from keeping insolvent banks in business, was to scare the markets into believing that no matter what happens, the Central Banks will be able to step in and support the financial system.
From a philosophical standpoint, this was Draghi’s and Bernanke’s “all in” moment. I won’t say they they’ve gone “nuclear,” as they have yet to truly monetize everything, but they’re not far from that.
And they’ve both failed.
Spain, which I’ve been warning will bring about the break-up of the Euro, saw the yields on its ten-year bonds break back above 6% yesterday. This is absolutely extraordinary. It indicates that within two weeks of the ECB announcing it’s going to do an “unlimited” bond purchasing plan, Spanish bonds are once again imploding.
Indeed, if you analyze the Spanish ten-year yield chart from a technical analysis perspective, you’d say that it’s bounce off former resistance (indicating that it’s now support) and is ready for the next leg up (north of 7% again).
This is Game Over for the ECB.
The EBC cannot announce an even larger program now as that would completely destroy its credibility in the markets.
Congratulations Mario Draghi, the markets were intimidated by your promise of unlimited bond buying for a total of less than two weeks.
On the other side of the pond, Ben Bernanke is rapidly approaching his own Game Over moment.
The US Federal Reserve bought roughly three quarters of all Treasury issuance last year. Let that sink in for a moment. Roughly $0.74 out of every $1 in debt created by the US in 2011 was bought by the US Fed… not by the bond market, not by foreign countries, but by our own Central Bank.