"A Lot Of Bad Things Happening All At Once": Rubino Warns Of Perfect Storm For Banks... And The World
Analyst and financial writer John Rubino has a new warning about the financial health of the global economy, and it's not good.
" So, you do have the potential for a perfect storm. I'll just go through a few of them. First of all, banks in the US own $4 trillion to $5 trillion in US government paper . . .. They use Treasury bonds as their safe asset. When interest rates go up, the price (or value) of the bonds goes down. This means there are a lot of unreported losses on bank balance sheets...
If those things find their way into earnings reports, which they will, then you have to count the losses. That is scary for the banks because they will have to report losses, and that spooks the depositors and you get bank runs. That is just there waiting to happen. Then, there are the subprime auto loans that are going bust at an accelerating rate... That's $1.7 trillion or so the banks have to worry about. Then, there are office buildings, and it's kind of the same thing. Office buildings are losing value. . ..
So, banks are looking at more unreported losses there. . .. The really big one is the artificial intelligence (AI) industry. It needs massive amounts of new capital in order to build the new data centers. Private credit companies have financed this . . . and the big banks financed the private credit companies.
So, if the AI bubble bursts, the big banks will be on the hook for a lot of that debt. Wherever you look, the banks have a lot of unreported losses sitting out there waiting for them to become reported."
But it's not just the banks facing a 'perfect storm.' It is countries like France, where communism and Islam have joined forces in the so-called "Islamo-Leftist Green-Red" movement. These Green-Red "protests" are in their second month. Do you think this destructive violence is good for the France banks or their economy? France has just had a credit downgrade, and if France fails, it could take down the Eurozone and maybe the global economy. Rubino says:
"They are illustrating the validity of the saying 'import the third world and become the third world.' They are just not France anymore. Most of Europe has varying degrees of the same problems. Europe is not that far away from becoming a nuclear armed caliphate, which creates all kinds of problems for the US."
Meanwhile, the problems in France have already spread to the rest of Europe, and Rubino points out:
"Europe was a bigger economy than the US, or at least it was. When you have trouble in an entity that is that big, nobody escapes the fallout. The European crisis is a global crisis."
Rubino contends, "The only way they can survive as a culture is to have a civil war and round up people who are never going to assimilate and deport them."
They want to do the same "Islamo-Leftist Green-Red" movement in the US after the midterm elections that is currently happening in France.
Rubino also does not worry about the recent sell off in gold and silver prices. He thinks this is just a price pullback in a much larger precious metals bull market. Nobody is going to be able to pay back any of the huge global debt accumulated by almost every country on the planet. Gold and silver cannot default, but bonds surely can.
