Ed Dowd: The imminent global “deep recession” will be used to usher in CBDCs
Edward Dowd, a former Wall Street money manager and founding Partner of Phinance Technologies, predicts a severe financial crisis in the United States, potentially worse than the 2008 crash, with the most critical phase expected to unfold in 2025/2026.
In an interview last month, he warned of a deep recession triggered by a housing crisis that will lead to a huge financial shock in the next 6 to 12 months, with stock market crashes, job losses and bank failures likely to intensify.
A central theme in Dowd’s analysis is the impending failure of numerous banks, particularly smaller institutions, leading to a major consolidation where the majority of banking activity would be controlled by fewer large banks. This consolidation, he argues, would be a necessary precursor to the introduction of a central bank digital currency, which is a tool for unprecedented government control over financial transactions and people’s behaviour.
Edward Dowd, a former BlackRock portfolio manager who oversaw a $14 billion growth equity fund for over a decade and co-author of the book ‘Cause Unknown: The Epidemic of Sudden Deaths in 2021 and 2022’, discusses the current state of the financial system, particularly the United States’ reliance on debt expansion and monetary interventions like quantitative easing (“QE”), and the potential consequences of this strategy.
According to Ed Dowd, the dollar is subject to long cycles; Tim Wood, the “Cyclesman,” has identified a four-year cycle. Based on Wood’s research, the downturn out of this sixth economic cycle is now lined up to correspond with the bursting of the largest economic bubble in history. As long as the dollar stays above the last four-year low of 89.10, the bullish long-term trend remains intact long term. At the time of the interview, the price was around 97. For the current price, see Stock Charts HERE.
“[The US dollar is] the cleanest shirt in a dirty laundry,” Dowd said. There is approximately $17 to 18 trillion in dollar-denominated debt in other countries, both sovereign and through corporates, making it difficult for them to get off the dollar without experiencing a deflationary depression. So, while we’re witnessing the dollar’s demise, it’s not imminent, he said.
When Dowd was asked his thoughts on the debt-refinancing cycle that’s been happening since 2009, he explained that a synchronised global slowdown occurred in 2019 accompanied by a repurchase agreements (“repo”) crisis. Repos are overnight lending between the banks and the Federal Reserve. The repo crisis led to central banks and governments increasing spending.
“Then, lo and behold, covid magically came along, and this crisis allowed and gave central banks and governments license to spend like drunken sailors,” he said. So, the Federal Reserve printed money and the US government spent it, resulting in actual inflation for the first time since 2009. Before 2009, inflation was asset inflation, the sustained increase in the prices of financial and real assets, such as stocks, bonds, real estate and land.
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