{"id":1063276,"date":"2018-10-03T21:00:29","date_gmt":"2018-10-03T21:00:29","guid":{"rendered":"http:\/\/juniorminingnews.com\/?p=1063276"},"modified":"2018-10-03T21:00:29","modified_gmt":"2018-10-03T21:00:29","slug":"worlds-most-important-bank-issues-urgent-zombie-alert-2","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1063276","title":{"rendered":"World\u2019s Most Important Bank Issues Urgent \u201cZombie Alert\u201d"},"content":{"rendered":"

By Nomi Prins<\/a><\/span> <\/p>\n

This post World’s Most Important Bank Issues Urgent \u201cZombie Alert\u201d<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

It’s been a decade since the world’s major central banks reacted to the financial crisis by cheapening the value of money through record low, zero or negative rates. <\/p>\n

What my research for my book Collusion: How Central Bankers Rigged the World<\/em> revealed was how central bankers and massive financial institutions have worked together to manipulate global markets for the past decade. <\/p>\n

Major central banks gave themselves a blank check with which to resurrect problematic banks; purchase government, mortgage and corporate bonds; and in some cases \u2014 as in Japan and Switzerland \u2014 buy stocks, too. <\/p>\n

They have not had to explain to the public where those funds were going or why. Instead, their policies have inflated asset bubbles while coddling private banks and corporations under the guise of helping the real economy.<\/p>\n

The zero interest rate and bond-buying central bank policies prevailing in the U.S., Europe and Japan have been part of a coordinated effort that has plastered over potential financial instability in the largest countries and in private banks. <\/p>\n

It has, in turn, created asset bubbles that could explode into an even greater crisis the next time around.<\/p>\n

So today we stand near \u2014 how near we don’t yet know \u2014 the edge of a dangerous financial precipice. The risks posed by the largest institutions still exist, only now they’re even bigger than they were in 2007\u201308 and operating in an arena of even more debt. <\/p>\n

Now the Bank for International Settlements (BIS), or the \u201ccentral bank of central banks,\u201d is sounding a new alarm on this policy.<\/p>\n

In its recent quarterly report, the BIS warned that low rates have catalyzed an increase in the number of \u201czombie\u201d firms. The number of such firms has now risen to an all-time high.<\/p>\n

Zombie firms are companies \u201cthat are at least 10 years old, yet are unable to cover their debt service costs from profits.\u201d Their prospects for future growth aren’t so hot either.<\/p>\n

According to the BIS, these zombies are still piling on debt and sucking money out of the real economy. Zombies \u201ctook on more debt and disposed of fewer assets after 2000.\u201d This behavior accelerated after the financial crisis because of low interest rates.<\/p>\n

The problem is that once a company becomes a \u201czombie\u201d it tends to stay a zombie. That phenomenon is only getting worse. The BIS disclosed that \u201cwhereas in the late 1980s zombie firms had a 60% chance of staying in that condition the following year, the probability reached 85% in 2016.\u201d<\/p>\n

Zombies created from an influx of central bank money aren’t good long-term investments. It’s one thing for a company to take on debt to grow, but it is another to take on debt simply to re-pay other debt. <\/p>\n

When the debt bomb finally detonates, it’s the rest of us who will suffer. Because of the collusion that’s gone on and continues to go on among the world’s main central banks, that problem is now an international one.<\/p>\n

You can avoid the worst of the fallout by staying away from such firms and targeting ones with healthier balances of debt and debt-payment abilities.<\/p>\n

Regards,<\/p>\n

Nomi Prins
for The Daily Reckoning<\/em><\/p>\n

The post World’s Most Important Bank Issues Urgent \u201cZombie Alert\u201d<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

…read more<\/a> <\/p>\n

From:: Daily Reckoning<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By Nomi Prins This post World’s Most Important Bank Issues Urgent \u201cZombie Alert\u201d appeared first on Daily Reckoning. It’s been a decade since the world’s major central banks reacted to the financial crisis by cheapening the value of money through record low, zero or negative rates. What my research for my book Collusion: How Central […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[366],"tags":[],"class_list":["post-1063276","post","type-post","status-publish","format-standard","hentry","category-dailyreckoning"],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1063276","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1063276"}],"version-history":[{"count":0,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1063276\/revisions"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1063276"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1063276"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1063276"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}