Former IMF Director Explains Why Banks Will Fail Again

DigitalGeometry

Junior member
39 4
What Simon Johnson (former Economic Counsellor and Director of the Research Department at the IMF), has to say about the sad state of affairs with respect to the banking situation globally, should send chills down the spine of most people around the planet. Yet, somehow I don't think that many people are paying attention to what's about to happen next on a global economic scale.

The video doesn't just say that another bank led global economic crisis is looming, it explains why and how it will happen. It is my own personal opinion that if this happens again, it will change the world's currency markets forever and it could be the precursor to usher in the first serious set of publicly known about policy maker discussions on a single Global Currency [there have obviously been such unofficial discussions in the past among policy makers, no doubt].

It is worthy to note that a single Global Currency wipes out the Forex business entirely and there would be no more "Interbank" as we know it today. The day it happens, those of us who trade for a living will either start looking for new jobs and new careers, or move into another viable market. The stock market won't be worth the paper its written on, so I would not venture back over there.

I think I would switch my tactical day trading the full panel of Commodity Metals Markets and then take off-setting strategic long positions in every major Consumable Commodities Market contract available on the CME, excluding Sugar and I would remain long until retirement from trading.

Anyway, Simon, has some very interesting things to say about what the future holds for all of us.

Simon Johnson

 

DigitalGeometry

Junior member
39 4
For those outside the U.S. not already familiar with BASEL III, this brief overview will give you a conceptual idea of what the new regulation is supposed to do. Simon's point is that Basel III [by itself] is simply not enough to prevent what's coming.

Basel III Conceptual:

Why does Basel III matter to me - I'm a trader?

You need to understand the impact of Basel III on the Interbank system as a whole. With a full role-out period up through 2019, how banks decide to select and denominate their reserve capital, will also impact interbank rates regionally and globally.

As a trader it matters because retail Forex prices move when Interbank moves and the two largest inputs to the movement of Interbank prices are central bank monetary policy decisions and fiscal policy decisions born from systemic regulatory change. These are the still lingering effects of the 2008 economic crisis on currency prices world wide.
 
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