There is currently a worldwide synchronization of quantitative easing happening.
This is evidenced by the fact that central banks from around the world have been cutting interest rates. In 2019 alone, more than 25+ central banks have implemented these easing strategies. Just in the last month central banks from Arab Emirates, Bahrain, Brazil, Costa Rica, Georgia, Hong Kong, Indonesia, Kuwait, and Saudi Arabia have cut rates, joining the parade of central banks in other countries doing so.
The Longest Easing Cycle in Over a Decade, Central Banks Are Still Panicking
Despite the implementation of quantitative easing (QE) around the world, central banks are still panicking. The banks are working together to influence the global economy, implementing the longest easing cycle since the early 2000s. There are more than 2 dozen central banks currently involved in economic stimulus measures in their countries. These measures include slashing interest rates, engaging in overnight repos, or printing massive amounts of national currency. Most importantly, they are all in it together.
Many of the biggest central banks engaging in these practices, like the U.S. Federal Reserve, refuse to admit what they are doing. They have the national media tell the public that what they are doing is necessary for the health of the economy and not QE at all. But, that is exactly what is happening. Central banks are expanding monetary easing policies and taking part in large-scale open market operations to manipulate the markets in their favor.
This is the exact definition of schemes but central banks do not want to admit that.
When GSI Exchange began reporting on the sizeable number of central banks using easing tactics, there were less than 20 countries involved. This number has continued to increase in recent weeks to a point where the number of central banks utilizing different types of stimulus has nearly doubled.
There have been at least a dozen major examples of this between the last week of September and the end of October alone.
At the end of September, the People’s Bank of China (PBoC) reduced the one-year loan prime rate (LPR) by five basis points. Even with this, China’s economy looks miserable. Following China, both Chile and Georgia manipulated rates in late October.
Chile slashed rates from 2% to 1.75% and Georgia’s central bank increased refinancing rates from 7.5% to 8.5%. This was the third time Georgia’s central bank changed the rates in the last month to deal with their rising annual inflation percentages.
Then, 5 Middle Eastern countries Bahrain, Kuwait, Saudi Arabia, and the United Arab Emirates all cut benchmark interest rates. Then, on October 30, three more countries joined the party. Costa Rica’s central bank cut key policy rates to 3.35%, claiming a lack of economic growth, the Hong Kong Monetary Authority (HKMA) also cut its base rate on overnight windows by 25 basis points, and the U.S. Federal Reserve cut rates for the THIRD time in 2019. Finally, Brazil joined the U.S. in cutting benchmark interest rates to 5%. They also said inflationary problems might implore them to continue easing practices.
Bank Runs, Skipped Bond Redemption, and Restructuring in China
Many small financial institutions in China are having trouble. So much in fact that there have recently been at least two runs on rural lenders. These have been fueled by social media rumors and speculation that smaller banks may be on the verge of failing. In addition to this, Guangdong Nanyue Bank recently skipped its local tier-two bond redemption for reasons that are still unknown. These bad loans and lack of liquidity are currently affecting over 3,000 small banks in China. Many finance experts and China-watchers believe the Chinese government will respond with “mergers and restructuring.” Baoshang Bank Co. in Inner Mongolia has already taken over by the communist government due to their faulty banking practices and credit risks.
Amidst the central banks trying to remedy the global economic situation with these questionable practices, demonstrations and uprisings around the globe are popping up seemingly every day. Huge protests have occurred but are not limited to, Argentina, Chile, Egypt, France, Haiti, Hong Kong, India, Indonesia, Lebanon, Netherlands, Peru, Russia, and Venezuela.
People are taking to the streets to fight back against the stem wealth disparity overcoming countries in every corner of the world. They are fighting back against bureaucrats and the banking cartel that prospers while everyone else is left with less and less of the financial pie.