European Central Bank Raising Interest Rates into the Inferno
What will the Federal Reserve do?
Just last few hours — ECB is raising interest rates…..into the monsoon period which may yet be foreshadowing for a legendary banking crisis still to come.
The European Central Bank on Thursday raised interest rates by a half percentage point as officials continue an aggressive battle against inflation despite some signs of stress in the banking system.
Why it matters: The supersized rate increase means the troubles at Credit Suisse and financial market jitters were not enough for the central bank to back off its inflation fight.
What they're saying: In a statement, the ECB acknowledged current "financial market tensions" and said it was ready to step in as necessary.
"The euro area banking sector is resilient, with strong capital and liquidity positions," the statement reads. "The ECB’s policy toolkit is fully equipped to provide liquidity support to the euro area financial system if needed."
Where it stands: Prices continue to rise at a rapid pace across the European Union. Initial estimates show inflation was 8.5% in the 12 months through February 2023, down a tick from the 8.6% the prior month.
What a clown show.
If Credit Suisse marks the beginning of European dominos falling — there may yet be some more mega banking failures in the EU to come as their central bank makes these moves. It’s just not possible for these behemoths to unwind the last few decades of poor decision making from banking Boards, CEO’s, on down the line to dealmaking and loans for failed business endeavors that cannot operate in a rapidly changing, or persistently high, interest rate environment.
Of course, predictably — the Swiss government came in to bail out Credit Suisse with $44+ billion in USD. Considering Credit Suisse is a G-SIB and therefore cannot fail, if they continue to make bad decisions, they’ll be bailed out again and again.
You can find out more about what a `G-SIB` is here:
Will the Federal Reserve similarly push U.S. interest rates higher — further off a cliff? All indications point to a halt in further raises, if not a decrease..
Expect them to make the wrong decision on this — as is the case with practically everything else they do.
They simply lack the capability to understand, or model, the downstream impacts of their poor decisions. That, and they simply do not care what happens — because they are insulated from the consequences of their decisions in their Ivory Tower.
They will simply give themselves a pat on the back, cost-of-living adjusted raises, and go on about their day — as catastrophic losses continue to mount for normal people who do not control the purse strings of the nation.
Anyone who believes these central banks (the fed/cabal) do not know what they are doing is in for a panic. They most definitely need to go back and read your articles. This has been a long time in the making.✝️🇺🇸
The reason for the high inflation was the rise in government spending. It seems logic to decrease spending to reduce inflation. Second thought? If a bank fails because of poor management or performance that’s the cost of business. It is not up to the taxpayers to bail out poor operating decisions. I mean what was Silicon bank doing supporting BLM? I don’t want to do business with anyone stupid enough to be supporting that kind of scam.
Move your money out of banks and into physical assets like gold and silver even farmland. That’s just my opinion