The World Is Heading to Bear Market Territory

by Nomi Prins
Daily Reckoning

Central banks have created the false confidence that an external force will support markets. But that force has nothing to do with the real economy or global economic conditions. Central banks’ main purpose now is to sustain the larger private banks and financial players while providing markets the boost they need to pretend the economy’s healthy.

The world’s major central banks — the Federal Reserve, the European Central Bank, the Bank of Japan and the People’s Bank of China (to a lesser extent) — have been coordinating to reduce the cost of money to add artificial liquidity to the system.

That’s all been done in an unnatural manner, and not because of real global growth. These central banks provide the artificial money injection markets need through quantitative easing, low interest rates and currency wars.

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