The Global “Put”: How Central Banks Have Reshaped the World

Featuring Nomi Prins

Nomi Prins, the author of “Collusion: How Central Bankers Rigged the World,” explores the triggers for the recent shifts in global central banking and for the increasing coordination among major economies. She highlights five regions and central banks that played integral roles in reshaping geopolitics. She also argues that the policies they implemented in the wake of the financial crisis have created cracks in the global economy. Filmed April 30, 2018 in New York.

Published on
16 May, 2018
Topic
Monetary policy, Geopolitics, Global Outlook
Duration
27 minutes
Asset class
Bonds/Rates/Credit
Rating
62

Comments

  • OE

    Olav E.

    22 5 2018 10:05

    0       0

    Nothing new, but a great summary of central bank activity.

  • JH

    James H.

    22 5 2018 07:35

    1       0

    I agree with the comments below. Excellent interview--I wish is was longer in fact. RV should have the author on a standing interview to get her back on as the stress signs of the next "crash" start to become more apparent.

  • DC

    Darrell C.

    18 5 2018 03:39

    0       0

    Taken from RV interview of Jeff Gunflach, “ he’s (she’s) just too bearish”...... which was a contrarian indicator for him to call next bull..

  • ev

    ernie v.

    17 5 2018 19:31

    6       1

    Others players who I respect have said much the same things, but only parts of the story. Ms. Prins lays it out simply so most people can understand what she talking about. Statements are backed up by facts in her books. If you something against this view I would be more suspicious about you and your stake in what the central banks did.
    Well done Ms Prins

    • WH

      W H.

      17 5 2018 23:58

      4       16

      I don’t pay to be spoon fed basic information presented like it is for an undergraduate course.

  • JM

    James M.

    17 5 2018 18:09

    10       2

    I Could say excellent video etc , and IMO it would be a good thing if RVTV had Nomi Prins on weekly! Instead I,ll just say this. She is the only person from the financial industry who has consistently shown with extensive evidence, having worked with the top parasite of them all GS and having done excessive research for her multiple books, that the entire banking industry are a bunch of immoral, despicable, lying, cheating, stealing, criminal, rat Cunts! The longer they yield power the more likely the human race and all other species are destroyed.

    • WM

      William M.

      20 5 2018 13:32

      4       0

      James, I think you are being a bit harsh toward rats....

  • RM

    Russell M.

    17 5 2018 14:37

    11       0

    David Stockman's thesis in his most recent Contra Corner publication is that the Fed's bubble blowing behavior had its inception when Woodrow Wilson and Congress changed the law to allow the Fed to buy Federal government debt to hold down interest rates and facilitate the financing of WWI. Prior to that, the Carter Glass 1913 Act forbid the Reserve Banks from owning government bonds and allowed them to discount only good commercial credit and receivables of member banks. After all, the law was adopted to prevent unwarranted runs on solvent banks. Wilson transmogrified the law to allow the government to support financing of government action though the sale of bonds to hold down interest rates rather than raising taxes, which is usually not too popular, to pay for these actions. This has reduced central government political accountability for spending. It is no more than backdoor taxation.

    • SS

      Steven S.

      17 5 2018 16:08

      6       0

      'backdoor taxation' infers the debt will be collected via future taxation - at this point, that is not possible - this is Ponzi finance - aka a crime...imho.

  • AH

    Alan H.

    17 5 2018 12:32

    4       1

    Nomi is a brilliant woman. Each of her books has been read and then added to my professional financial research library.

  • JW

    James W.

    17 5 2018 01:14

    10       10

    Is there anything new, unique, interesting, or useful here? It's just painful to try to listen to hackneyed information that has been raked through over and over again for years.

    • IH

      Iain H.

      17 5 2018 15:32

      7       1

      I disagree, I think a review of the 08 era and central banks part in that will be questioned the at the next down turn. The narrative a decade on maybe more about political volatility front running market data. Data, that does not reflect the real life experience of many if not the majority in most western democracy and that had different action been taken in 08 the situation a decade plus on could be much healthier than it is, all be it with much more pain back in 08.

  • F

    Floyd .

    16 5 2018 23:14

    1       8

    The value of these interviews many times is to hear a "different"perceptive so now we have heard the socialist/progressive perspective. Greece was not bailed out by the EU?,that was just humorous as was if we had only listened to Mexico we would have handled the financial crisis better and of course the Fed did not make sure the benefits of QE were evenly distributed throughout the economy and made sure the bridges were built. Her emphasis on and book title's use of the word "collusion" was more ideological than accidental.

  • JL

    James L.

    16 5 2018 21:47

    26       3

    Great interview. What all the central bank defenders below fail to grasp is that the Fed caused the GFC and should not get any credit for its "emergency" actions to remedy the natural results of the GFC, especially when those emergency actions have totally screwed the working class, the elderly on fixed incomes, and future retirees who will be handed a pension pittance in real terms. (While, concurrently, allowing financial institutions to escape and profit and politicians to posture and preen without any need to resolve our long-term problems.) The Fed's actions in facilitating the end of Glass-Steagall, preventing any limitations on bank leverage or derivatives regulation, or allowing Fed regulated entities to keep claiming endless credit protection from AIGFP for reg. cap purposes, all were direct causes of the GFC. Their conduct of monetary policy from Y2K forward was also clearly a direct contributing cause of the GFC. Unless you think that prosperity can be printed endlessly via creation of electronic money and without consequence (political, debt deflation, and/or inflation), you have to acknowledge that the consequences of the Fed's conduct will be horrific. It is up to us to remember and assign the blame when the time comes to help reform the system.

    • PU

      Peter U.

      16 5 2018 22:19

      4       1

      Outstanding comment!

    • WG

      Wade G.

      16 5 2018 22:25

      1       1

      In short, tru dat.

  • CS

    Chuck S.

    16 5 2018 21:41

    5       3

    Nomi got as much wrong as she got right about Brazil, a country I know something about. Made me question her account of the history of the other places she mentioned.

  • WH

    W H.

    16 5 2018 20:59

    3       23

    This is hard to listen to. Would be better to go to the Wikipedia page for “central bank” and have a computer read it.

  • VS

    Victor S.

    16 5 2018 20:05

    4       1

    WELL DONE

  • TC

    Timothy C.

    16 5 2018 20:01

    16       0

    The only reason the GFC did not become the Great Depression Part Two is because we are no longer on a gold standard and therefore the Fed could buy the bad debt from the banks for full value and allow them to continue on. The bad debt goes on the Feds balance sheet never to be seen from or heard from again. Government debt and deficits will not matter until they do, and when they do I hope I am not around. The problem in planning for that eventuality is that there is no way to gauge when (or even if) it might happen. Therefore, it is very costly to sit on the sidelines that entire time hoping to be right...eventually. The only option, in my humble opinion, is to be broadly diversified across real and financial assets globally.

    • JM

      Jim M.

      17 5 2018 02:37

      2       0

      Well done.

    • SS

      Steven S.

      17 5 2018 16:23

      7       0

      Timothy at what point does your personal morality enter your well worded above rationale?

      This perfectly describes the Baby Boomer generation in my opinion. Greedy fat fingers knowing and seeing the wrong - but still willfully complicit, awaiting your promised slice of retirement riches, while civil society burns.

      A system without sound money & sound economics is a weapon of mass destruction upon the world and all things living.
      It's time to wake up - & if you don't younger generations will at a certain point force this sea change, and time is a'tickin Boomer generation...change seems slow until it's not

  • RM

    Russell M.

    16 5 2018 19:46

    5       1

    Other than possibly Mexico, I didn't hear any support for her claim that the Federal Reserve threatened other banks to get them to cooperate. The other central banks had plenty of incentive on their own. Their own economies depended on continuing purchases from the US and if they did not inflate their currencies as well, then the dollar would have become too cheap and US purchases would have dried up. This would have had dire ramifications with their own banks and economies. Also, keeping interest rates low is sovereign debt friendly supporting issuance of more sovereign debt which all politicians liked. It propped up the value of stocks and bonds in their citizens pensions plans minimizing discontent from large swathes of their citizens. This had the effect of undercutting market efficiency, encouraging stock buyback rather than R & D and capital investment thereby reducing future real economic growth. This was ignored on Keynsian principle that in the long run we are all dead. And this is where we are today. Major economies have huge bubbles that will blow if interest rate are allowed to go up (and they appear to be going up a bit right now as a result of QT and increased Treasury issuance necessitated by the unfunded tax cuts with 10 year Treasury Bonds hitting3.093% as I write this). If the Fed and other central banks allow this to continue, the bubbles will burst.

  • NG

    Nick G.

    16 5 2018 19:04

    6       38

    A whole load of hot air unpropped by a single piece of real data. Because there is none supporting her simplistic thesis. Felt like a was reading an extended tweet by one of the permabears on FinTwit. You know the ones: Zerohedge, Felder, etc. Been wrong since 09, wrong still, but come out spewing rubbish every time the Dow drops 100.

    • JS

      John S.

      16 5 2018 21:36

      8       0

      Her book is packed with data.

    • JL

      James L.

      16 5 2018 21:50

      9       0

      Its an on the fly interview, not a defense of a dissertation.

    • WH

      W H.

      16 5 2018 23:12

      1       9

      Yes, her book has a lot of data and a lot of words, like the phonebook.

    • FH

      Franz-Xaver H.

      20 5 2018 20:39

      0       0

      The markets are up because of the central banks, so they also drop because of their politics. Seems simple to me.

  • DS

    David S.

    16 5 2018 18:38

    3       13

    Nomi Prins is intelligent and articulate. This thesis sells well - parts are certainly true - but overall it is pandering. Wall street, Governments and we caused this the crisis. The Central Banks made many mistakes after the crisis, but they were the only ones with a finger in the dike. Everyone likes to blame everyone else, especially with a major conspiracy theory. If CB had not stepped in with the good, the bad and the ugly, they would have been blamed a la Great Depression for doing nothing or making it worse. It is simple unbridled human greed and fear that caused the problem. DLS

    • WG

      Wade G.

      16 5 2018 22:24

      9       0

      DLS, you stated, "It is simple unbridled human greed and fear that caused the problem", presumably as a sufficient summary and in contrast to the thesis Nomi presented. I can't buy it. At least not beyond a truism that applies generally to all financial mishaps. Fear and greed aren't new human emotions. They operate constantly, throughout history. Why that crisis, at that time? The near-fatal blow to the world financial system was brought about by the Fed. They are serial arsonists who get a pat on the back for putting out their own fires. The ultimate cost of their latest fire suppression has not yet been tallied.

    • DS

      David S.

      17 5 2018 21:38

      2       1

      Wade G. I agree greed and fear are part of our nature and helped us to survive. Without an operative moral code, however, unbridled greed can only be controlled by enforcement of reasonable laws. Art Cashin of UBS said when he started out in Wall Street a handshake was a bond. Now there is no shame or guilt. Congress and several Presidents changed the rules of trading which allow massive derivative exposure to be the norm generating huge counterparty risk. The derivative market may have reached $1.2 quadrillion (Investopedia). The invisible hand is nailed to the wall, when everything is allowed. The Fed was the only finger in the dike. I wish they would have stopped with QE1, and started infrastructure projects. Ms. Prins is blaming the central banks as if they were the prime movers. If laws were not changed allowing unbridled greed to win, the Fed would not have had to step in. DLS

  • SS

    Steven S.

    16 5 2018 18:04

    15       0

    About time RV has this wonderful women on! - shining more light in the dark CB Ponzi finance money hole.....

  • DP

    David P.

    16 5 2018 12:26

    3       2

    Interesting that she is calling out the corruption of a sole side of the political spectrum in Brazil. When you dig a bit on what really happened, it is rather funny.

  • TJ

    Terry J.

    16 5 2018 12:18

    4       0

    I must confess that it was useful to have an expert historian like Nomi remind me just how influential and corrupt the Western banking system is, and has been for decades since the world moved to a fiat reserve currency in 1971. I guess the big question as Nomi alludes to at the end is to figure out what will happen when the next big crash comes. While it’s easy to conclude that the Fed and the other colluding central banks will be out of bullets this time, I would not necessarily bet on it! Such a complex picture not made any easier to discern by the development of the petroyuan as an eventual competitor to the dollar’s hegemony. For now my money after having recently watched Raoul’s excellent analysis of the western retirement crisis that is looming, is on a major debt jubilee being enacted either when the markets crash or maybe before, but who knows what the scheming wizards at the Eccles building and BIS have up their sleeves!

    • EF

      Eric F.

      16 5 2018 21:01

      2       0

      Debt jubilee seems to keep coming up but who gets left holding the bag on that / the debt? Us?

  • PU

    Peter U.

    16 5 2018 10:28

    32       1

    It appears, the scam (creating money and buying / supporting asset prices) being perpetrated by Central Banks can continue nearly indefinitely (IMO), so long as the "crowd" doesn't challenge these practices. To date, the current CB narrative is embraced by WS and the media. Nomi believes that the money creating and asset purchases will have to be "unwound" eventually. I disagree as long as the global lemmings are not disturbed while nurturing themselves on the monetary teat. For example, nobody cares of the current trial balloon being floated by Japan's CB to "restructure" / convert its JGB holdings (a considerable proportion of JGB issued and outstanding debt) to a zero coupon 100 yr bond, effectively neutralizing the worrisome debt-to-GDP ratio and and related debt service burden. To emphasize the monetary craziness practiced in excess since 2008 let's describe it terms likely understood by the proletariat . . . I have to go to work and preform a task to assist in creating a product or service so I can get paid to purchase food, clothing, etc. Central Banks can create money digitally (not connected to any economic activity) to purchase sovereign debt, corporate debt, residential mortgages and equities. Governments can run increasingly large annual deficits because Central Banks can digitally create money and purchase (monetize) these deficits (so long as they don't buy the sovereign debt directly from the Government's Treasury (the issuer) and then restructure the interest payment and duration of the purchase debt to render the present value of the monetized debt to be immaterial (e.g. turning a 10 yr bond into a 100 yr bond with a perpetual inflation goal of 2% per year). WHERE ARE THE SCREAMS . . . SHAM!!! Take this to an extreme, why have personal and corporate income tax at all (US just lowered both and increased deficits . . . a form of cloaked helicopter money delivery tactic that does not disturb the lemmings feast on the teat)? Just run the largest deficits and monetize and restructure every now-and-again and it all works out, right? Sad.

    • TJ

      Terry J.

      16 5 2018 12:42

      15       0

      Which of course is so much easier to do when you control the MSM, resulting in only a discerning few (percentage wise) bothering to read independent news, research etc. In reality we are already living in a mixed huxleyan orwellian nightmare that the 1% have cleverly constructed without most of us having a clue that we exist within their social media manipulated matrix. The elite worked out long ago that as long as you ensure the masses aren't starving (so you provide food stamps funded by artifically created money, etc.), they will not rise up and revolt! Very clever, but as you say, so sad.

    • SH

      Steve H.

      16 5 2018 18:52

      10       1

      I'm not convinced the sheeple are as ill-informed as we RV-types might assume. Whenever I talk to normal people - that is, people who don't stare at charts all day and read RV and its ilk deep into the night - I get a sense that quite a few know there's something amiss in the system even if they can't identify and articulate the problems as eruditely as somebody like Nomi. We have seen evidence of this in the well-known anti-establishment votes of recent years.

      Still, even if this is truly the case it will only be the tinder for change. We will still need a spark. My crystal ball got broken several decades ago, so I have no answer to the 'What?' and 'When?' questions. However, I do believe in two immutables: the 1% are human, and therefore susceptible to peak hubris and greed - in short, they will at some point overreach themselves; second, the business cycle has been distorted by CBs but not retired, and given the palpable fragilities in both our financial and real economic systems the next downturn will probably not be mild. So the spark for possibly violent socio-political upheavals which could have systemic implications will quite probably come from within the policy establishment itself. That spark might find more loose tinder lying around than perhaps anybody expects.

    • DS

      David S.

      16 5 2018 19:39

      2       0

      Although the wealthy get most of the benefits, many others are looking for as many free lunches as possible too. There is no moral imperative, just 'I am smarter than everyone else if I do not get caught'. There is a strange new correspondence to not getting caught and not admitting anything if you are caught. Not sure how it will end, but it will not be pretty. DLS

  • JS

    John S.

    16 5 2018 10:12

    4       0

    Carstens - And finally, monsieur, a wafer thin mint.....

    • WH

      W H.

      16 5 2018 20:44

      1       1

      What about the bucket?