Watch Out!! This Is What The CENTRAL BANKS Are Planning!

if you want to know what the people in power are planning all you need do is listen last week four of the world's most powerful people made public statements that could make or break the Global Financial system no I'm not talking about billionaires like Bill Gates or Elon Musk I'm talking about the heads of the central banks of the United States Europe Japan and the UK the very people who turned Bill Elon and others into billionaires with their zero interest rate policies so in this video we're going to summarize what these Central Bankers said and tell you why comments made by one of them could foreshadow a total economic collapse this is a video you cannot afford to miss the central Banker discussion we'll be summarizing today took place in Portugal at the European Central bank's Forum on Central Banking it's easily one of the most intense discussion panels we've broken down and I strongly suggest watching the whole thing if you have the time spoiler the moderator was ruthless so shout out to Sarah Eisen at CNBC for doing such a good job you can see what I mean using the link in the description now the discussion panel began with a few words from the moderator of the central banking forum she set the stage for the discussion by explaining that the FED ECB and Boe have been raising interest rates to get inflation down to two percent whereas the boj has kept rates low but is considering raising them that's the Federal Reserve European Central Bank bank of England and Bank of Japan in case anyone was wondering anyway the event moderator concluded by asking an open question how long will it take to bring inflation back down to two percent and is it possible to do this without causing a recession a somewhat funny question considering that the Eurozone recently entered a recession and the UK is arguably headed that way too in any case once the event moderator was done Sarah took the mic and the first question she asked the panelists was how much higher they will need to raise interest rates to bring inflation back down the ecb's Christine Lagarde said they would be data dependent and left the door open to more hikes before the other Central Bankers could respond Sarah modified the question in mid-air and directed it at Boe Governor Andrew Bailey she asked him why the Boe recently raised rates by 50 basis points Andrew said it's because the economy is strong Sarah then asked him if people are angry at them for raising rates Andrew was a bit stunned all he could say is that they quote had to do it for context Rising interest rates have hit Brits the hardest due to all the adjustable interest rate mortgages and one of the top economists at the Boe told the British public back in April that we need to quote accept being poorer bollocks anyway Sarah then turned on Fed chair Jerome Powell and basically asked him the FED recently paused but you refused to call it a pause but you also refused to call it a skip so what the hell is it Jerome reiterated his standard Spiel labor market tight inflation too high still see two more rate hikes coming Etc Sarah wasn't having it she asked Jerome why the FED doesn't just raise right away Jerome said they want to wait and see for lag effects Sarah then asked quote so rate hike at every other meeting then Jerome in total shock insisted that the FED hasn't decided that yet note that he's not used to getting his feet held to the fire in this way for reference asking these kinds of pressing questions at regular Central Banking press conferences would probably mean that you never get invited back again it's incredible that Sarah was able to get away with it and it makes me wonder whether she was given the go-ahead by the panelists in advance anyway speculation aside Sarah turned to her final victim kazuo ureda the recently appointed head of the boj according to macro analyst Western Nakamura kazuo was given the job after all the other experienced boj veterans refused to take it because they know that exiting easy monetary policy will be a disaster Sarah asked kazuo what's going on in Japan he acknowledged that headline inflation is on the rise but tried to claim that core inflation is low Sarah stopped him in his tracks by pointing out the core inflation in Japan is also High kazuo tried to wriggle out by citing a strong labor market smelling blood Sarah asked kazuo why the Japanese yen is so weak compared to other Fiat currencies he said it was for many reasons primarily the monetary policies of the other Central Bankers on stage this caused the crowd to laugh at kazuo subtly blaming those next to him for raising interest rates now for those unfamiliar raising interest rates typically causes a country's currency to strengthen while other central banks have been raising interest rates the boj has effectively kept them at zero it's been doing this by buying up Japanese government debt this is called yield curve control now after kazuo said that the boj is monitoring the Yen's weakness Sarah pulled the rug out from under him with a crushing question you're monitoring the Yen for intervention purposes right now this is a reference to the boj's move to sell U.S bonds for US dollars to buy yen last year to protect its price kazuo clearly not knowing what he had signed up for simply said no satisfied with her initial assault Sarah began her second wave of questioning she asked Christine how long it would be before the ECB pauses Christine claimed that they're not considering it yet and plan on keeping interest rates high for the foreseeable future even when they do inevitably pause watch out Sarah then asked Andrew why inflation is so high in the UK he provided a long list of reasons ranging from energy costs to a strong labor market the moment he stopped to catch his breath Sarah asked him if it was due to brexit he claimed it wasn't and said that it's really because of pandemic restrictions hot potatoes all round Sarah went on to ask Jerome how low core inflation needs to go before the FED pivots Jerome rambled a bit before admitting that the labor market needs to soften I.E recession Sarah asked if he was surprised that this hadn't happened yet Jerome admitted that he was but said it's a sign rates need to stay high now Sarah seems to have spared kazuo for the second round because she started from the top for the third Innings of her Inquisition she asked all the central Bankers if they talk amongst themselves they looked nervously at each other and refused to answer because the answer is yes they do talk amongst themselves they do this with the help of the bank for international settlements or bis the so-called bank for central banks you can find out what the bis is planning using the link in the description moving on once the panelists had found their footing Sarah began shaking the stage again with her fourth line of questioning the topic recession she switched it up by starting with Jerome and asked him if Rising unemployment means recession Jerome said not necessarily but we all know that it does Sarah then asked Christine if Europe is in recession and I'll remind you that it technically is in recession as of a few weeks ago believe it or not but Christine denied that Europe is in recession she said the economy is just quote stagnant presumably her justification for continuing to raise interest rates Sarah followed Christine down her path of denial by asking her if there will be a recession in the Eurozone Christine went even deeper into denial by saying that the ecb's base case doesn't include recession but it's a possible risk I'll remind you for a third time that Europe is in recession Sarah went on to ask Andrew if there will be a recession in the UK he said that the Boe has been predicting a recession for months but it hasn't materialized he said this is because winter in Europe was much milder than usual meaning that there wasn't much demand for energy and not as much inflation finally Sarah turned once again to kazuo she asked him how the Japanese economy is doing he said it's doing good and pointed to pent-up domestic demand and foreign investment as the drivers however he cautioned that this could change if there are issues in the U.S or EU another subtle dig at his colleagues Sarah immediately saw the opportunity to return to her third question she asked the panelists again if they coordinate monetary policy this time Andrew had an answer he said that they don't coordinate monetary policy but they do discuss monetary policy since they're dealing with quote common shocks having finally got an answer to her question Sarah turned back to kazuho and threw him a curveball do you think that the other Central Bankers here are raising interest rates too much kazoo immediately responded no which is interesting for reasons that I'll come back to later enjoying the reaction to her curveball question Sarah tried to get one out of Jerome by asking him his opinion about whether the U.S is Raising interest rates too much Jerome essentially said no which prompted Sarah to ask if there was a risk of keeping interest rates too low he essentially said yes Sarah used this as a layup for a fifth cutting question will the world's central banks change the two percent inflation Target due to persistently High inflation driven by deglobalization and other factors the panelists tripped over themselves to say no saying yes would forever destroy their credibility kazuo was the only outlier he admitted that the boj has had a hard time getting inflation up to two percent and that the central bank now has the difficult task of anchoring inflation expectations to 2 percent FYI central banks fear deflation more than inflation because deflation means people just save their money and don't spend anyways Sarah seemed to sense that Jerome was getting too comfortable so she asked him about how the pandemic affected the U.S economy Jerome again rambled a bit and the moment he mentioned commercial real estate he knew he was a gunner Sarah asked him if we should be concerned about this sector Jerome just said that large Banks aren't at risk which is not very reassuring and also not entirely accurate if you watched our video about banks with exposure to real estate you'll know that one of the largest banks has lots of exposure too I won't say which one you'll have to go and watch that video now having put Jerome in his place Sarah began her sixth assault on the panelists by asking them how long it takes for interest rates to affect the economy with all there are thousands of PhD economists and advisors neither Jerome Christine Andrew nor casuo were able to provide a clear answer kazuo's answer was actually quite comedic he said that when he started at the boj 25 years ago rates were already near zero and yet inflation has only started to increase over the last few months as such you could say that monetary policy has worked with a lag of almost 25 years everyone laughed unsatisfied with these answers however Sarah adjusted her approach she pointed out to the panelists that the markets are supposed to be a transmission mechanism for monetary policy and yet the markets have been rallying despite all the rate hikes she asked them if they are watching the markets Christine danced around the question as always Andrew said they're evidence driven which makes no sense and Jerome said they're not focused on the markets which isn't true now Sarah sniped Jerome's dishonesty by pointing out that he had made comments suggesting he wanted the markets to crash Jerome said he meant Financial conditions not the markets even though that's what the FED means by Financial conditions for kazuo Sarah changed the question a bit by asking him how important the markets are to the boj he acknowledged that Japanese stocks have been rallying and this tends to happen when interest rates are changed but pointed out that the boj hasn't changed its policy stance so it's not their fault this set Sarah up before a pivot of her own from domestic to International the Seventh Wave of questions were related to geopolitics Christine revealed that all the central Bankers are concerned about geopolitical risks primarily because they could result in higher inflation and higher rates as a result Sarah asked Christine how the ECB is thinking about next winter given that the EU was saved from an energy crisis by an abnormally warm winter last time Christine just said that she hopes it's mild which is terrifying it's even more terrifying when you consider that Germany recently shut down its last nuclear reactors Sarah asked Andrew about food inflation in the UK Andrew claimed that he had spoken with food producers and they told him that food inflation will come down the proof will be in the pudding I suppose Sarah then asked kazuho about tensions in the Taiwan Strait kazuho revealed that uncertainty around China has resulted in the relocation of human and financial capital from China to Japan Sarah asked kazuo if this will benefit Japan he said yes but only in the short term in the long term it could be a problem and that is putting it mildly this inspired Sarah to shine the spotlight on the tense relationship between the U.S and China she asked Jerome what the FED thinks about it and he said that it's not their job to think about it so she asked Christine about something that's important to the EU China's economy is looking weak is that a problem Christine's answer was somewhat defensive of China and by the end of it she revealed that it's because the EU is obsessed with its green energy transition and it needs China to achieve it apparently almost all the solar panels wind turbines and batteries are made in China well it's better than relying on Russia right Sarah picked up on this irony and asked the panelists if they have a contingency plan if China invades Taiwan Jerome said the FED will stick to its dual mandate Andrew said quote we will talk about it no comments from Christine Orcs do hope for obvious reasons it would be very bad Sarah wouldn't let them off that easily though she put Christine in the hot seat by asking her if the European banking system was in good shape Christine's response was subtle the banks that are under our supervision are in good shape I.E we're not sure about the others Christine also reminded the audience that the EU doesn't include Switzerland a reference to the fact that Credit Suisse had gone under earlier this year Sarah then asked Andrew the same question and his response was even more eerie he said that the handling of Credit Suisse begs the question of whether the process is currently in place are working well enough to handle these crises he implied their possible ineffectiveness is due to the speed of Bank runs Sarah also asked Jerome the same question but she disarmed him by acknowledging that the large Banks had recently passed a stress test she asked her M specifically about the medium-sized Banks Jerome dodged the question and said that institutions of that size need more regulation and oversight finally Sarah turned to kazuo and asked about the banking system in Japan this is where things got intense kazuo started by saying that Japanese banks are well capitalized and all that jazz but then he warned that if the boj starts to normalize its monetary policy then Japanese Banks could be in trouble in other words if the boj starts raising interest rates like the other central banks Japanese Banks could be left with the same kinds of unrealized losses that caused the banking crisis in the U.S back in March that's why kazuo said that they will conduct stress tests long before they decide to start moving the needle Sarah saw the opportunity to go for the jugular so that's exactly what she did she asked kazuo how the boj will deal with the Japanese government's enormous debt burden after all if the boj raises interest rates the Japanese government will default kazuo flat out said that it's not the boj's problem mad this Julie opened the door to Sarah's Ninth Avenue of attack she asked the panelists if fiscal policy I.E spending by governments is making their jobs of fighting inflation more difficult Christine started by saying that quote a man's got to do what a man's got to do which certainly begs a lot of questions anyhow Christine confirmed that the ECB has been telling European governments to stop spending Andrew said that he wouldn't tell the UK government what to do and Jerome said it's not his job Sarah quickly asked Jerome about pandemic stimulus he said that almost all of it has been spent Sarah then adjusted her aim to the balance sheets of central banks and asked kazuho how much is too much or rather how much more can you subsidize the Japanese government kazuo didn't have an answer Andrew on the other hand proudly stated that the Boe is selling off its balance sheet as quickly as it can by contrast Christine said that the ECB isn't focused on the balance sheet probably because it would cause interest rates in weaker European countries to increase to the point that they default Jerome said something fascinating and that's that the fed's balance sheet runoff has been working as intended chugging along at one trillion dollars per year minus the de facto bank bailouts in March of course Sarah asked if there's anything that would make the FED speed up its runoff Jerome said yes in theory now this is significant because when central banks reduce their balance sheets it has the Practical effect of raising interest rates Jerome's admission that the FED could speed up its balance sheet runoff under certain circumstances is therefore a seriously hawkish Revelation the more you know having by this point waterboarded the panelists for over an hour Sarah saw fit to give them a breather with some softball questions to wrap things up her first one was truly soft what makes you optimistic Christine said she's happy about the ECB finishing its digital Euro proposal because folks nothing says optimism like the creation of a dystopian Central Bank digital currency that will track and control your every transaction more about the digital Euro in the description moving on to add insult to injury however Andrew also said that the boe's digital pound proposal is what makes him optimistic Sarah then spiced up her question by asking about AI Andrew added that the Boe is working on integrating AI into its processes perhaps for better PR recall that comment about making us poor Jerome revealed that the FED is also interested in AI what's odd is that he didn't mention fed now the fed's upcoming fast payment system if you watched our video about it you'll note that it's the first step on the road towards a full-blown digital dollar odd that Sarah didn't press him on this either regardless kazuo crashed the cbdc Party by saying that the boj is thinking of issuing new physical paper if you watched our video about the companies that printed all of the world's money you'll note that Japan has an abnormally high demand for physical currency assumed to be due to cleanliness to wrap things up Sarah asked the panelists how high inflation will be one year from now Christine said it will be around three percent in the EU Jerome said that inflation in the U.S won't come down to two percent until 2025. kazua said that inflation in Japan may come down in 2023 but may also re-accelerate in 2024 Sarah's final question was whether this was a difficult point for the panelists careers a hilarious question given that she had just wiped the floor with them on live television Andrew tacitly admitted that it's been difficult Christine repeated that a man's got to do what a man's got to do Jerome agreed kazuo the Newbie had the last word with a blank look on his face he said and I quote I didn't know there would be so much traveling and so many conferences try working in crypto mate so this brings me to the big question that you're probably all wondering by this point where was the comment that's going to result in a total economic collapse and who said it well the answer is our friend kazuo his comment about the boj starting to raise interest rates again could be catastrophic as explained by macro analyst Western Nakamura Western central banks especially the ECB are depending on the boj to keep interest rates low that's because low interest rates in Japan and high interest rates abroad are resulting in capital flight Japanese investors buying Western Government debt to put things into perspective Japan is the largest holder of U.S government debt outside of the US itself if the boj started raising interest rates this would cause lots of this Capital to flood back into Japanese government debt and have the Practical effect of raising interest rates for governments overseas this would do damage to the US and the UK but it could quickly bankrupt governments in the EU in case you haven't noticed the financial system is interconnected any serious issues in Europe would quickly spill into other markets causing a domino effect of liquidations bankruptcies you name it this is why kazuo's comments about the boj conducting stress tests of the banking sector prior to raising interest rates are so significant if you see that the boj has started conducting these kinds of stress tests you'll know that rate hikes aren't far off Western keeps track of this stuff so be sure to follow him speaking of which Western also analyzed this banking panel he picked up on the fact that kazuo hinted that the boj will start raising interest rates if inflation in Japan re-accelerates in 2024 this makes sense since high inflation would mean the boj can raise rates without bankrupting the Japanese government if the boj Waits until 2024 to raise interest rates it's possible that this wouldn't have the catastrophic outcome on the economy that I just described that's because it's likely that most western central banks will be at or near zero interest rates by 2024. doing the boj a favor in return so to speak that said Japan's transition away from yield curve control isn't going to be easy this was put on full display last Autumn when the boj increased the interest rate its targeting with yield curve control by just 0.5 percent the markets immediately fought the boj this resulted in Yen weakness and boj intervention now from our perspective the only solution to the boj's monetary mess is to create a cbdc that allows them to control every transaction in the economy just like the other central banks are not so subtly doing and it's fascinating that kazuo appears to be a fan of cash while the boj rushes to roll out its digital yen a digital Yen could very well be the boj's plan B if something goes wrong on the way to non-zero interest rates what's scary though is that it could just as easily be the boj's plan a and everything kazuo said is just jaw burning I mean it's not like these Central Bankers have deceived Us in the past is it and that's all for today's video if you found it as interesting as I did Smash that like button to let me know if you want more interesting crypto and macro content be sure to subscribe to the channel and ping that notification Bell if you're sick of the Fiat Financial system then crypto is one way to opt out but only if you custody your own coins and tokens which isn't always easy the first step is to create an account on a trustworthy crypto exchange which also isn't always easy that's why we made the coin Bureau deals page that's where you'll find discounts on the best crypto wallets and up to forty thousand dollars of bonus airdrops complete with guides for the best crypto exchanges the link will be down below in the description thank you all for watching and I will see you next time this is guy over and out [Music]

Channel: Coin Bureau

Views: 1,301,404

Keywords: cbdc, central bank digital currency, federal reserve, cbdcs, cbdc crypto, cbdc federal reserve, cbdc update, ecb forum, ecb forum 2023, fed, jerome powell, fednow, ecb european central bank, cbdc adoption, more crypto online, btc, digital dollar, euro cbdc, bank of japan, european central bank, bank of england, coin bureau, inflation, christine lagarde, ecb cbdc, monetary policy, instant payments, china taiwan, cbdc rollout, ecb, economy, fed interest rates, interest rates

Id: wdpQoO8af6g

Length: 26min 25sec (1585 seconds)

Published: Sun Jul 09 2023