Big global banks like JP Morgan and Deutsche Bank are desperate for cash and may come to insolvency one by one by the end of this year.
JP Morgan or Deutsche Bank, are unable to settle trades because they don’t have the cash. When the end of the quarter comes they’re gonna have to, by law, announce that they’re insolvent.
And therefore, they’re gonna set off the cascade and this will be the continuation of the 2008 crisis, only much much worse. As they delved into exploding “debt bomb” the Federal Reserve is trying to cover up in the re-position market.
The rapidly increasing intervention into the re-position market indicates that there is “obviously some insolvency” in the system.
Banks are required to have a certain reserve of cash on hand and if they don’t, they have to borrow overnight to meet this requirement.
They may go to other banks to make their books square, but if other lenders turn them away, they have to ask the Fed as a last resort.
Given that this could happen multiple times and because all the lenders are interconnected, the fall of one of the banks could cause a domino effect, like what happened when Austria Creditanstalt bank failed and initiated the Great Depression.
RT. com / ABC Flash Point News 2019.