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Eric King:  “Dr. Roberts, as you know KWN interviewed the man who was called upon to execute QE1, and he said the Fed’s balance sheet was at “$4.4 trillion, compared to $800 billion pre-financial crisis.  So this is really uncharted territory that I find quite shocking.”

Dr. Roberts:  “Well it is quite shocking.  And if all that money had gotten into the economy, we would be experiencing a hyperinflation.....

Continue reading the Dr. Paul Craig Roberts interview below...


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“Most of it has been stuck in the banks because the banks are so busted they can’t afford to lend, and the consumers are so busted they can’t afford to borrow.

So the whole purpose of quantitative easing was to support the balance sheets of the four or five large banks.  When the Fed buys Mortgage-Backed Securities or Treasuries, it raises the price of all debt-related derivatives.  And since these banks have trillions of dollars of these things on their books, what the Fed has done with quantitative easing is to support the balance sheets of the banks.

In other words, no corrective action has been taken.  The situation today is as unstable as it was when the financial crisis broke.  At some point something will break.  The consequence of that balance sheet, the consequence of all the new creation of debt and dollars on the exchange value of the dollar, will lead to the United States facing an extraordinary crisis.  So when it breaks I don’t know, but what is there now is not stable, it’s not tenable.”

Eric King:  “When you say the United States will face an extraordinary crisis, how bad will that be?”

Dr. Roberts:  “If the dollar takes a substantial tumble in the foreign exchange markets because people realize it’s a cooked currency, and depart, the import prices in the United States will rise dramatically.  And people who already can’t pay their bills will be pushed to the wall.

So I think you could have massive social instability, starvation, and massive homelessness.  The potential for a real catastrophe is there.  And instead of trying to deal with this issue, the banks, since they control the Fed, the Treasury, and the financial regulatory agencies, what they have done is to protect the few banks by engineering a bigger crisis for the future.

And as the person you interviewed, the man who implemented QE1, said, we’ve never seen anything like this before.  This is a new development.  And so it’s very difficult to predict the outcome of something we have never before witnessed.”

Eric King:  “As the endgame has continued to unfold, where are things now versus where you saw them a year ago?”

Dr. Roberts:  “Worse.  And what’s amazing to me is that it’s been able to go on for so long.  It’s just really amazing that people still go into the stock market even though it’s up because the corporations are borrowing money from banks to buy their own shares.

The bonds are at negative real interest rates when extraordinary debt and money is created.  None of this makes any sense -- none.  None of it would have been possible at any previous time in history.  And we can add to that, nobody knows the consequences of these extraordinary derivatives that a few big banks have. 

We are talking about derivatives that are some multiple of world GDP.  They can’t possibly be covered.  So I have never seen anything like it.  These types of developments that produced this mess would have been strictly illegal in my day.  So I don’t know what to make of it.

And I don’t know how much longer it can go on, particularly with Washington now beating the war drums, not against some helpless country like Iraq or Libya or Syria, but against Russia.  It’s just insanity.  So what I see is a complete and total failure of the United States government.  And what results when a government totally fails?  We don’t know, but we are going to find out.” This is one of Dr. Paul Craig Roberts’ greatest audio interviews ever and it is available now. You can listen to the audio by CLICKING HERE.  He discusses the endgame, gold, the coming collapse and much more. 

IMPORTANT - KWN has will be releasing 4 new pieces over the weekend.

© 2014 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

The audio interviews with Dr. Paul Craig Roberts, Andrew Maguire, Art Cashin, Michael Pento, Gerald Celente, MEP Nigel Farage, Eric Sprott, Bill Fleckenstein, David Stockman, William Kaye, John Hathaway and Marc Faber are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf -- to listen CLICK HERE.

Eric King

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