To calm the pain, there is no secret.
It takes money, a lot of money, called “liquidity” to ensure the “solvency” or more precisely the illusion of normality and therefore an illusion of solvency of the system.
As for the ECB, as you may have read in this edition, Christine Lagarde announced that she would no longer announce anything. Basically, it will no longer say whether it will raise or lower rates. Everything will depend on the situation. From the stressful situation of the banking system on the one hand and from inflation on the other. In function, we will see and the ECB will advise.
That tells you if our great fundraisers supposed to be omniscient wade through semolina and pedal through yogurt.
J. Powell’s doubt: how to increase rates without causing financial instability?
Simple…by doing what he did yesterday. On the one hand, it increases rates more slowly with a rate of 0.25% which still leads us to rates of 5%!!!
Oui, 5 % !
It’s not nothing.
At 5% in France, if our 3,000 billion debts were all at 5%, it would cost us 150 billion euros per year, just for the interest of the debt! Suffice to say that we would be bankrupt, it’s 3 times the national education budget!!!
Powell will therefore for the time being continue to raise rates very slightly and flood the banking and financial system with liquidity to prevent it from cracking immediately.
It should work perfectly.
There will be plenty of free money for the banks, and people, peoples, businesses will have to pay even higher rates to the banks…
That’s wonderful.
It’s exquisite.
Something to delight the financial markets!
It is already too late, but all is not lost.
Prepare yourselves !