A truly major banking crisis

An interesting paragraph I just found in International man ou Doug Casey newsletters. Interesting enough to be shared. It will help you to make sense of it all…

Much worse than that of 2007-2009. Governments, who are all bankrupt, borrow money from commercial banks. Commercial banks have lent it to them because they believe it’s a risk-free loan. Governments encourage them to lend recklessly, hoping that will jump-start sluggish economies. Central banks, which are the arms of their governments, have taken interest rates to zero and below for that reason and to make it easier for governments to service their debt. This policy has encouraged businesses to take on debt.

It’s an idiotic and reckless experiment that will end—likely in this cycle—with bankrupt central banks and governments bailing out bankrupt commercial banks and businesses. Just the way they did in 2007-2009. Except this time, the situation is much more serious.

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