Prior to
the Global Financial Tsunami of 2008, I had written several
articles exposing the global Too Big To Fail (TBTF)
banks as financial rapists and predators and they would cause untold
havoc to the financial system.
Post the crisis, I had also warned that these global TBTF banks are all
insolvent and the toxic assets on their balance sheets would exceed
US$20 trillion at the minimum. The entire fiat money system is bankrupt.
Printing toilet paper money by the trillions does not make the system
solvent. It is a clear admission that the system is totally broken.
The banking
Humpty-Dumpty has fallen from the
wall and shattered into a thousand pieces! The confirmation for this is
the fact that all central banks led by the FED have only one aim - to
create massive asset inflation. How can a stock market of a bankrupt
nation be at an all-time high?
The FED and central banks the world over are not interested
in resolving the unemployment problem because record unemployment would
not collapse the fiat money system. It may trigger massive social unrest
but that can be put down by a militarized police force, supported by a
battle-hardened military as is happening in the US.
In the circumstances, we need to ask the US$ Trillion question,
Why are all the central banks focusing
on asset inflation via creation of money out of thin air?
The answer: THE FIAT MONEY SYSTEM IS THE
ECONOMY, STUPID!
It used to be that the Petro-dollar was the linchpin of the global
economy. However, when the derivatives market took off and became a
US$800 Trillion global casino, the US$ toilet paper became the currency
in global financial trading and speculation.
All the TBTF banks were leveraged to their eyeballs and the collaterals
were hypothecated and re-hypothecated so many times over, it became an
inverted pyramid joke.
The collaterals were bundled up into CDOs etc. rated AAA by corrupt
rating agencies and traded. We need not repeat this old story. The point
we are making here is that not only are the collaterals junks but they
are supporting a mountain of debts in the trillions.
Therefore, when collaterals are impaired the
TBTF banks are in a hole from which they cannot get out.
The FED and other central banks have no
choice but to bail out the TBTF banks if a systemic failure is to be
avoided. If all the junk collaterals were to be off-loaded at once in
the full glare of public scrutiny, there would be a run on all the
banks. So, what was required was a stealth rescue effort.
The TBTF banks were allowed to unload the
junk collaterals bit by bit by the various schemes of the FED
culminating in the US$85 billion a month purchases of treasury bonds and
mortgages by the FED.
Additionally, newly “minted” collaterals were used to replace the junks
so as to clean up the balance sheets of the TBTF banks.
I have stated earlier that the minimum
amount of toxic assets needed to be mopped up is US$20 trillion. After
five years, the FED has just scratched the surface. It is debatable how
many US$ Trillions the FED has actually pumped into the system directly
and indirectly.
How much and how long more can the FED
continue to pump US$ toilet paper into the system without creating a
massive loss of confidence in the dollar? When the balance sheet of the
FED reaches US$7 Trillion or maybe US$10 Trillion? It is anybody’s
guess...
For sure, there will be a point when another US$100 Billion is created
on top of the stash of US$ toilet papers which will tip the scale and
collapse the entire system.
It is a catch-22 for the FED. If it stops
creating fiat money out of thin air, the fiat money system would
collapse immediately. If it continues with more money creation, it
merely postpones the inevitable and more devastating end-game. This is
the price we all have to pay for allowing the fiat money system to hold
sway for so long.
The world was conned into accepting the biggest Ponzi scheme in the
history of banking and finance - the US$ Global Reserve Currency Ponzi
Scheme.
This scheme was created on a sand castle of debt, specifically US
Treasury Bonds. The world does not need a Global Reserve Currency.
Global trade can be conducted in any currency in accordance to the needs
and resources of a country.
Why should there be a special privilege given to only one country to
have its currency as the sole reserve currency for purposes of trade? It
makes no sense as it is the result of US imperialist policies under the
pretext of the Cold War.
The con was based on the propaganda that the
US$ should be the preferred currency and the US Treasury Bond is the
“safest asset” to have in the event of an outbreak of war between the
Western Imperialist camp and the Soviet bloc.
We were told this arrangement was necessary
if we are to enjoy the protection of the mighty US superpower!
Yet, when the Soviet bloc collapsed no one questioned the need to
perpetuate the system.
Another spin was propagated. The US was the linchpin in the new
era of globalization as the US market
was the biggest consumer/export market. Everyone was caught in this web
of deceit.
The US market was a market built on a
mountain of debt. Adding insult to injury, the US consumers paid for the
goods produced by millions breaking their backs with US$ toilet paper
money!
Some so-called currency experts have asserted that no other currency can
replace the US$ toilet paper as the global reserve currency because no
other country has a bond market like the US bond market, dominated by
the US treasury bonds. What an idiotic statement!
If a country is not in debt, there is no need for any bonds to be
issued. A bond
is an I.O.U.
A bond is a mere paper pledge to repay a debt.
And anyone who says and continues to perpetuate the myth that a US
debt is a better debt and is more secure is ignorant and
misinformed!
Why would anyone want to work and produce goods which are sold and paid
in US$ toilet paper and then use the surplus US$ toilet paper to lend to
the US government who repays the debt by merely printing more US$ toilet
paper?
