"Whatever checks and balances that existed in Capitalism Classic have been removed, and as a result, the world economy is now effectively a multitrillion-dollar game of chicken played by governments and bankers, with the rest of us reduced to rubberneckers.
Paul Craig Roberts invites us to imagine Congress demanding that Fed answer for the market-rigging and outright fraud that characterizes New Capitalism. “The Federal Reserve will reply: “So, you want us to let interest rates go up? Are you prepared to come up with the money to bail out the FDIC-insured depositors of JPMorganChase, Bank of America, Citibank, Wells Fargo, etc? Are you prepared for US Treasury prices to collapse, wiping out bond funds and the remaining wealth in the US and driving up interest rates, making the interest rate on new federal debt necessary to finance the huge budget deficits impossible to pay and finishing off what is left of the real estate market? Are you prepared to take responsibility, you who deregulated the financial system, for this economic Armageddon?’”
The answer, no surprise, would be: not on our watch. “But the question remains: How long can the regime of negative interest rates continue while debt explodes upward?” Roberts foresees a worldwide rebellion against the US dollar as reserve currency (it has already began with the BRICS), which means an end to it as “safe haven.”
And this, of course, would force the search for another safe haven. Tim Iacono predicts, “If elected officials dicker, much like they did last summer during the debt-ceiling debate, look for the dollar to tumble and take US stocks along with it, while the price of gold soars.” '
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