The Entire Fiat Money System is Bankrupt

[Publisher's Note: This article was published in the Global Research E-Newsletter on November 2nd 2013.]

Demise of the Global US Fiat Dollar Reserve Currency

It’s been a while since I last wrote an article on the on-going financial crisis. I don’t write for the sake of writing, as others do because they have to do so, on account of their subscribers who pay hefty subscription fees and demand their money’s worth.

Major issues or trends do not change on a daily or even monthly basis. A trend may take a few years to run its course and unless there is a major factor that may affect the trend, there is hardly any need to comment any further on the trend or outcomes.

The events unraveling post Bernanke’s decision not to taper QE is most significant because it confirms our analysis that the banking crisis has not been resolved in any significant way after five years of money printing and massive asset inflation. The fiat money system has but one outcome – total collapse. It will also mean the demise of the global US dollar reserve currency.

There are no solutions at hand.

Bernanke is totally discredited and his continued tenure as Chair of the FED would only accelerate the realisation that the FED and all central banks have failed. Hence, the need to change the “leadership” at the FED, but the same policies would be followed with some cosmetic changes to hoodwink the ignorant masses. It is analogous to the transition from the second Bush presidency to that of Obama and all the theatrics of “change” propaganda. In fact, Obama is Bush 2 on steroids! Yellen will be Bernanke on steroids. Why are we so certain of this outcome at Future Fast-Forward?

Our reasons are as follows:

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 militarised 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 shit-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 globalisation 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 an [email protected]#hole!

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?

So, do you still think the world needs a US$ toilet paper money as a reserve currency?


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Publisher's Note: Now you know, spread the word!

 

Global Elite Manoeuvres To Gain Absolute Power

For a year of more we've had our newspapers and TV screens full of the Greek economic crisis. Now it's Italy, with it's £1.6 trillion national debt that it can't afford to pay the interest on (never mind the principal debt itself).

My point here, and I want to make it quickly as I don't have much time, is that the Global Elite, that is the Banking families who own and control the banking system in all major countries, are conditioning us to accept a major power-grab on their part.

We all know that the media has been in their hands for decades, if not a century or more, so we can be sure that all the newspapers, publishing houses, economists, radio and TV stations and most other commentators are simply mouthpieces for the Elite, who want to bring their aims of a dictatorial World Government a huge step closer.

Since the start of the credit crunch in 2007 we have all been subjected to relentless propaganda to make us think that the economic crisis is so bad, so huge, with big banks like Lehman Bros going bust and even whole countries like Greece, Italy and Portugal facing Armageddon, that nothing short of international action can resolve it.

The huge debt mountain is the issue. I've raised the question elsewhere in this blog of exactly to whom all this money is owed (and it's not all owed to China). What the Elite are trying to do is to raise the spectre in the minds of the overwhelming majority of people in the West of complete and utter economic disaster, with all its appalling consequences.

And the consequences are likely to be in the form of riots, civil disorder, a possible complete breakdown of each country's infrastructure and, most menacingly of all, food shortages.

Most people would "pay any price" (now, where have we heard that before?) to avoid all this. That is what the Elite are relying on. Because at the appropriate time they will step forward with their "solution" to this nightmare situation.

And what will that solution be? Why, it will be to hand them absolute power, absolute control, over all matters that up to now have been considered matters to be decided at a national, or even local, level. Part of that absolute power will be to abolish our present form of money, including cash.

Cash has always been the bane of the Elite. Cash, after all, enables the little folk, the ordinary people who form the backbone of any country, to settle their little debts and other affairs between themselves without anyone else (even the taxman, heaven forbid!) knowing. Cash enables us to go about our own business without having to let the parasitic banks and ultimately the parasitic Elite in on the act. No wonder the Elite wants to abolish cash.

So it will be with great relish that they solemnly inform us that, in the interests of economic survival, cash has to be a casualty. A new form of money, in the form of international credit of some kind, the ownership of which they will have assumed for themselves, of course, will be produced for us to use as our means of exchange.

Will this involve the enforced micro chipping of the entire world's population, as has been suggested by some anti-Elite commentators? I don't know. That plan may be too much even for the all-powerful Elite at the present time, but with the popularity of "smart phones" sweeping the entire planet I would say that it is quite possible we may all have to have a smart phone if we are to be allowed to survive, and use it as a personal credit card, with all control of how much credit each one of us is allowed resting with the Elite or their power structure.

If anyone upsets the Elite, they simply find their credit, via their smart phone, cut off. Without cash, they won't be able to buy anything, not even a box of matches. They will be faced with a choice of either starvation or surrendering to the Elite. People like us will be banned from exposing their plotting and manoeuvrings.

What about individual, historic nations like Greece, Italy and Portugal? And what about all nations, come to that? We have long known that the Elite works continually to destroy nationhood, the last bastion of protection for ordinary people from these international power-crazed parasites. Now the Elite sees it as in their power to completely destroy and discredit individual nations and replace them with two or three power-blocs straddling the world, all controlled by themselves. That is why the so-called "European Union" still exists, universally unpopular and rampantly corrupt as it is.

All the former European and North American countries, for long the most viable potential source of opposition to these diabolical plans, will be destroyed, not least by the replacement of their ancestral people with a hotchpotch of African, Asian, Middle Eastern and, most insidious of all, mulatto peoples, all distrusting each other and too engrossed with the innate problems of "multi-culti" to notice that they're all global slaves, completely dependent on the Elite for their miserable existence.

Anyone with reasonable intelligence, looking at the situation, can see the evil behind it all. Let's not only spread the word, let's DO something to stop this nightmare.

Philip Gegan

 

 

 

 

 

Bulls Rush In

This article was first published in June 2009:

Things have been strangely quiet on the economic and financial front over the last month or more. I believe this is the calm before the next storm, yet it is obvious that many people, including fund managers and other financial professionals think this rally will last and last. Let's see who is more likely to be right.

After the market collapse of late 2008 and early 2009 there was a reversal, and the stock markets of Britain and the US have made substantial gains. In the US the S&P rose 8.54 per cent in March, and has made further gains of 9.39 per cent in April, 5.31 per cent in May and, so far in June, 0.23 per cent. In Britain the figures for these months have been plus 2.51 per cent, plus 8.09 per cent. plus 4.11 per cent and then minus 2.89 per cent so far in June.

Just looking at these figures gives cause for concern for anybody having invested on the basis that the recovery is underway. The highest figure for both indices was for April, with June nearly over and showing stagnant or negative figures. But lets take a brief look at what has been happening behind the scenes at the banks, where all the trouble stems from.

These huge banks, remember, had to be bailed out with billions and billions of taxpayers' money just a few months ago. This was because they had been on a reckless orgy of lending massive amounts of money to people who had little or no chance of ever repaying it. What have these banks been doing over the last few months? Have they been prudently lending to credit-worthy companies and individuals in order to get their business back on a firm footing so they can start repaying the taxpayer? Have they been exercising extreme caution so as not to make the same mistakes again?

No. What they have been busy doing over the last few months is lending massive amounts of money to people who have little or no chance of ever repaying it.

This sounds incredible, but it's true. Added to this is, as I wrote last month, the fact that another, bigger barrel load of the brown stuff is set to hit the fan over the next few months and into 2010, and that is the commercial mortgage situation, where borrowers, through no fault of their own in general, are in the process of defaulting in massive numbers, having been hit by the recession and subsequent fall in sales and profits.

Meanwhile in Britain the latest ruse of domestic mortgage lenders is to sell the mortgage to another lender, who then offers to write off a percentage of the loan,typically around 25 per cent, if the borrower will then agree to seek out a new lender to transfer his mortgage to. At least this helps many house owners, who can reduce their monthly payments and overall liability to the money-lenders.

But it shows what a farcical merry-go-round the whole financial system is. The sooner we all wake up to the whole racket and take matters into our own hands, the better. There's nothing to stop us all issuing our own money, free from debt, and regaining our ancient freedoms.

Just download and read "Promise To Pay" from our home page to get started.

Spread the word . . .