It doesn't take an economist to sense that there is something very wrong with the global economic system. Not only does worldwide unemployment remain near all time highs, the disparity between rich and poor greater than ever, the frequency of fraudulent activities on the part of large banks and corporations virtually an every day disclosure, with the price of commodities at the mercy of traders and not supply and demand; but, in addition, the extent of these problems promise to only get worse, if we let them.
Anyone who has ever invested, or investigated such instruments, likely receives regular missives from one or more of the many doomsayer pundits who, for a price, will tell you the secrets for investing in the midst of such an intemperate economic climate.
Usually, the options involve gold and/or silver, and/or foreign currencies, and/or stocks and/or bonds.
All of these miss the point: In order for the private parties--who have usurped almost all of the world's sovereign currencies and replaced them with private bank notes (Federal Reserve Notes and other so-called legal tender), all placed into circulation in exchange for bonds upon which the now vassal states pay compound interest--to maintain this house of cards, they must continually invent new ways of destroying massive amounts of value created by labor, in order to enslave labor and seize the fruits of that labor (collateralized assets).
No doubt the worst game that these casino operators have invented to destroy value and steal assets is that of interest rate swaps, sold as a means of safeguarding investments in bonds. Instead, in a world where the sellers (the house) also control and rig all the rates and markets (as discussed here), such derivatives are just another means for theft.
Currently, these derivatives have reached such astronomical heights that they threaten the entire global economic system.
In a recent article excerpted here, Michael Snyder (theeconomiccollapseblog.com) warns, "There is one vitally important number that everyone needs to be watching right now, and it doesn’t have anything to do with unemployment, inflation or housing. If this number gets too high, it will collapse the entire U.S. financial system. The number that I am talking about is the yield on 10 year U.S. Treasuries."
Snyder's explanation is simple--when the yield on 10-year U.S. Treasuries goes up:
• Long-term interest rates all across the financial system start increasing ...
• It becomes more expensive for the federal government to borrow money,
• It becomes more expensive for state and local governments to borrow money,
• Existing bonds lose value and bond investors lose a lot of money,
• Mortgage rates go up and monthly payments on new mortgages rise, and
• Interest rates throughout the entire economy go up and this causes economic activity to slow down.
• Finally, on top of everything else, there are more than 440 trillion dollars worth of interest rate derivatives sitting out there, and rapidly rising interest rates could cause that gigantic time bomb to go off and implode our entire financial system.
As we noted in our previous article, "The upshot of the last housing bubble," this is why the banks must make it difficult to get mortgages, even for those who have remained creditworthy after the 2008 shakedown.
There's been a lot of talk about how the Fed is printing money like crazy, but in fact this money is being borrowed by the so-called government (the taxpayers) to pay interest on the debt to the private banks, to pay for war and health care profiteering, and to put money into the hands of the banks (quantitative easing), who use it to buy up collateralized assets untethered by joblessness, bankruptcies, and foreclosures. Thus, it becomes necessary (for a number of reasons, including inflation and eugenics), within the context of privately owned currency, to cut social services.
When doomsayers talk about how to preserve the value of your liquid and near liquid assets, they are necessarily guessing, because the repercussions of such a meltdown is as much a political question as it is economic. Brazil is the only nation to refuse to accept unregulated derivatives as trade. They are now being threatened by the EU with a trade embargo. China accepted the agreements, but only in exchange for control of international trade markets in automobiles, auto parts, and electronics. As a direct result, millions of U.S. jobs immediately shifted to China, helping to cause the U.S.'s largest municipal bankruptcy in its history, the city of Detroit.
Considering that several American banks have a derivative exposure that is 3 to 4 times larger than all of the wealth of the world, it’s easy to see that no amount of printing money by the Federal Reserve, or cooking the books by the U.S. Treasury, can extend this scam for an indefinite period of time. One interdependent part or another will necessarily collapse. Thus, the banks, through their lackeys in D.C., have attempted to shred the Constitution via lesser laws, so that they can incarcerate all protestors when the time comes. Since the judiciary is in the pocket of the racketeers, it's unlikely that they will cite the obvious grounds for declaring these fascist laws unconstitutional; so, what we have is corporate control over the state, one of the textbook definitions of fascism. In other words, economic collapse does not mean political collapse; the fascists have the printing press for the money and the control over the military and the police to make their unconstitutional laws stand up.
Copyright 2013, Robert Bows
Colorado Public Banking
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[We are pleased to announce that our book, 7 Steps to Global Economic and Spiritual Transformation, is now available online at Amazon and at Barnes and Noble.]
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