Warnings Of A New Credit Crisis And The Potential For System Wide Bail-In Push

Alternative analysts are often shunned in their views that the ‘world is ending’ when it comes to the financial system, and this despite the fact that those who correctly forecast the bursting of the housing bubble and subsequent credit crisis were dead on in their assertions.

But while many of these same prognosticators have so far been wrong in their timing of how long the Fed and other central banks could keep both the markets and monetary system going through the incessant use of continuous credit and money printing, just like in 2007-08, it is only a matter of time before these individuals once again are proven right.

Yet with that being said, alternative financial analysts rarely have a big audience or ‘choir’ to listen to their message, and this in part is because most people in the West (U.S. and Europe) have not had to go through a severe financial crisis in over 80 years (Great Depression).  But unlike their grandparents who had to live through that era, when there have been economic crises during the past eight decades the government has put in place many programs to protect their people from outright starvation and homelessness.

One of these programs of course is that of insurance on your bank accounts (FDIC).  But something happened in 2010 which has made even this safety net no longer valid as the Dodd-Frank Banking Reform Act changed your depositor status to that of an unsecured creditor, and where the banks can institute what is commonly known as a bail-in of your money that will negate the FDIC from paying you back most of the money you will lose.

We have already seen bail-ins take place here in this decade in the West with the ‘test case’ example in Cyprus. And with central banks suddenly shifting course from eight years of propping up the banks and the markets with zero percent interest rates and tens of trillions in cheap money to that of Quantitative Tightening (QT), is it a coincidence that the new Federal Reserve Chairman happens to be one of the original architects of the bail-in program?