“There is no fix,” says analyst John Rubino of our current financial crisis. The bank collapses were just the beginning; now banks are in for more trouble when all the vacant offices financed at low rates over the last decade turn out not to be profitable. “The government is going to have to let it burn and have a 1930’s style depression, or bail out everybody in sight … it’s going to be a bloodbath,” Rubino warned of a “very fiery end” to a “global monetary experiment.” Although inflation cooled in March, the chief economist at Dreyfus & Mellon says that it is too soon to declare victory. “The ‘Great Inflation’ isn’t over until the Fed says it is because they don’t need to raise rates anymore,” he said, adding the inflation fight may get harder as unemployment rises. Legendary investor Jeremy Grantham, who predicted 2008’s financial crisis, also sees more chaos ahead. “Other things will break, and who knows what they will be. We’re by no means finished with the stress to the financial system,” he told CNN.
USA Watchdog via Zerohedge/Greg Hunter
“There Is No Fix” – Rubino Warns Global Monetary Experiment Ends In “Bloodbath”
Analyst and financial writer John Rubino said in February, “We are in a debt and death spiral” that will force dramatic changes on the world.
It was a direct hit because in March, Silicon Valley Bank (SVB) tanked, and the FDIC and the U.S. Treasury were forced to basically back-stop the entire banking system. The financial problems are far from over as Rubino explains,
“Basically, interest rates have been artificially low for a decade…
In that time, crazy numbers of office buildings went up and were financed at really low rates… Now, office vacancy rates are spiking, which means office building are not profitable anymore. The debts they have at 2% to 3% now have to be rolled over at 5%, 6% or 7%. This means an already unprofitable office building is going to be even more unprofitable because of rising interest rates. Now, they want to sell this office space, and the price cuts that have to be done to get a deal done is 30% to 50%… Some are down by 80%…”
Continue reading, here.
Business Insider/Zahra Tayeb
The ‘Great Inflation’ won’t be over until the Fed says so and stops hiking interest rates, chief economist says
US inflation may have cooled in March, but it’s soon to say the threat is officially over, a veteran economist says.
“We can’t declare victory yet. The ‘Great Inflation’ isn’t over until the Fed says it is because they don’t need to raise rates anymore,” Vincent Reinhart, chief economist at Dreyfus & Mellon, told Bloomberg on Thursday.
“Once we get a run in which inflation is close to goal and people don’t care much about inflation, then it’s behind us,” he added.
You can read the full article, here.
Yahoo Finance/Prarthana Prakash
‘Other things will break.’ Legendary investor Jeremy Grantham warns of more financial chaos and wants to see Powell ‘channel a little bit of Volcker’
After the high-profile failures of Silicon Valley Bank and Signature Bank last month, U.S. officials have assured Americans that the financial system is sound, and that depositors will get their money back. But one seasoned investor who predicted 2008’s great financial crisis thinks that more chaos will unfold.
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“Other things will break, and who knows what they will be,” Jeremy Grantham, the co-founder and chief investment strategist at asset management firm GMO, told CNN in an interview Thursday. “We’re by no means finished with the stress to the financial system.”
You can read the full article, here.