Opinion (Graham Summers, Chief Market Strategist): “Over the last two years, I’ve been caught into believing a Crash was coming several times. In some ways I was right: we got sizable corrections of 15+%. But we never got the REAL CRASH I thought we would because the Fed stepped in.
“So what makes this time different?
1) The Crisis coming from Europe will be far, far larger in scope than anything the Fed has dealt with before.
2) The Fed is now politically toxic and cannot engage in aggressive monetary policy without experiencing severe political backlash (this is an election year).
3) The Fed’s resources are spent to the point that the only thing the Fed could do would be to announce an ENORMOUS monetary program which would cause a Crisis in of itself.
“In simple terms, this time around, when Europe goes down (and it will) it’s going to be bigger than anything we’ve seen in our lifetimes. And this time around, the world Central Banks are already leveraged to the hilt having spent virtually all of their dry powder propping up the markets for the last four years.
“Again, this time it is different. I realize most people believe the Fed can just hit ‘print’ and solve everything, but they’re wrong. The last time the Fed hit ‘print’ food prices hit records and revolutions began spreading in emerging markets. If the Fed does it again, especially in a more aggressive manner as it would have to, we would indeed enter a dark period in the world and the capital markets.”
My Comment: Here is an opportunity to begin local wars or one world war. The rulers will practically have no other choice. And only the timely realization that the crisis is aimed at changing society can lighten our path.