Eric Sprott: “The greatest danger is that we are supporting a levered banking system and everything they own is paper (financial instruments). If all the sudden things get bad, everyone takes their money out of the bank. It’s the central banks who are fighting to keep the banking system alive, so of course they are going to give them a clean bill of health (on the bank stress tests). Heta went broke in Austria. It had a AAA rating, so it was well-rated in the latest stress tests. 3 months later it’s broke. That’s what happens to levered financial institutions.
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