Today Nomi Prins, the keynote speaker who recently addressed the Federal Reserve, IMF and World Bank, issued a dire warning to King World News that we may have just witnessed the trigger for the next global collapse.
Eric King: “We saw the global financial system come unhinged as a result of the mortgage-backed securities scheme from 2007 – 2009. Do all the derivatives and junk bonds tied to the energy sector have the potential to cause a similar level of panic and chaos in the global banking and financial system?”
Nomi Prins: “It does have that potential for a similar reason, which is that a very small amount of underlying collateral in the energy sector and other industries that are dependent on profits from the energy sector for their own revenues, a small number of those can create a much larger ripple effect…
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Nomi Prins continues: “As you mentioned, we have already seen this with the sub-prime crisis and other crises. And in today’s markets, because co-dependency remains the key to the game between banks and other types of financial institutions, when something starts to unravel at the core of a trade or a derivative, it can spiral into a major problem for the global banking and financial system.”
Eric King: “Even though we’ve seen the carnage in the oil sector, we have not yet seen the chaos in the banking sector play out that could trigger a global financial crisis.”
The Trigger For The Next Global Collapse
Nomi Prins: “Not yet because banks are not writing down a lot of these losses. But what we have seen, and this is how the sub-prime losses started coming in, are downgrades, delinquencies in payments, and defaults in associated securities. So that’s the first step. From there we will see write-downs. From there we will see lack of confidence in associated derivatives. Everything just sort of seizes up because of the price destruction in the energy sector. We are already starting to see this happening in the oil patch.
Here is the problem, Eric: Once the cracks start to develop in the banking system, the only question left will be:
“How bad will the global financial destruction ultimately become and how devastating will this
be for people around the world?”
***KWN has now released the powerful audio interview with Peter Boockvar, where he warns we haven’t seen real chaos yet, but it’s coming and gold is going to skyrocket, and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***ALSO JUST RELEASED: Why The World Is Now Carefully Monitoring The Carnage In This Major Market CLICK HERE.
***KWN has also now released the extraordinary audio interview with legend Rob Arnott, who oversees $155 billion. He discusses the carnage in global markets, what to expect next as well as some remarkable investing strategies for investors to weather the global storm, and you can listen to it BY CLICKING HERE OR ON THE IMAGE BELOW.
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