Today billionaire Eric Sprott warned King World News about a developing situation that should scare the hell out of every investor on the planet.
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. Three months later it’s broke. That’s what happens to levered financial institutions.
Billionaire Eric Sprott (pictured above) warns developing crisis should frighten every investor
We see with the Heta example that governments can no longer afford to bail out their banks. It’s the bail-in thing that should be everyone’s worst fear. The governments can’t afford to bailout the banks because the banks are bigger than the governments. That’s why I’ve always suggested to people that one of the biggest risks is having money in the banking system.”
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