The Fed can't repeat its sterilized intervention? After all,
this, not Lehman, caused the mega-melt in 2008 (IMHO).
They are trying Summers thing with IMF gold selling, but
the dollar is way too high given the size of QE. BIS derivatives
numbers for June are going to be out soon, hopefully later this
month. They will provide a bit of insight. I am hoping to see
glass half full, a decline of notionals, for the benefit of the
globe, but afraid we'll see the usual ramp of notional, decline
of real value. The latter would mean further derivatives mega-bubble
expansion. If they don't reign it in, we'll be facing a systemic
meltdown again some time down the road, and it will be much
closer in time. Perhaps, no longer than a couple of years,
since the Ponzi scheme already proved unsustainable.
Unfortunately, a complete
meltdown was avoided last year only because the Fed and
the government assumed the role of failed counterparties
and became a large player in the shadow banking system.
They are trying to make derivatives clear through a clearing
house starting October and December. So, I am very careful
again - large government actions on mega - bubbles tend
to produce swans of some sort. |
