Collapsing Financials

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These elites do not have a vision. They know only one word: more. They will continue to exploit the nation, the global economy and the ecosystem. And they will use their money to hide in gated compounds when it all implodes. - Chris Hedges

If you thought the global financial crisis of 2008 was difficult, wait till the sequel comes to your doorstep. Some investment professionals feel that the sky could soon be falling as recent events have led many to brace for the worst. The world and everyone in it should be preparing for some very difficult days ahead but that is not happening because most are drinking some kind of happy tea. An unprecedented financial storm of unknown scope and dimension is upon us but it is crushing certain people, cities, states and countries before others. Many are perceiving and reporting that the fundamental economic outlook has changed substantially over the last couple of weeks.

“There is a growing sense of despair in Brussels. Unlike previous attacks on the euro project, the latest downgrade of Portugal’s debt by the ratings agency Moody’s feels like the beginning of the end. Those economists and fund managers, who argued that a second bailout for Greece with private sector involvement would mean something similar for Portugal and most likely Ireland, are hitting their target. Like a 19th century battalion holding the line against oncoming hoards with depleted firepower and an officer class at war with itself, the euro’s supporters are in a desperate situation,” writes the Guardian.

A clear majority of the uncrushed are certain that there is nothing to worry about and go about their business as if life will continue on as it has these past few decades. But 100 percent of the crushed have no doubt that there is a civilization-scale catastrophe taking place and that there will be little or no recovery from it for as far as the eye can see into the future.

John Rubino wrote, “For a couple of years now it’s been clear that the world was about to fall apart, with the only question being which local failure turns out to be the catalyst for a systemic breakdown. So many things were on the verge of blowing up… yet none of them did. The world’s governments have engaged in a heroic period of “extend and pretend” that has kept the system together longer than seemed possible. But now the game seems to be ending. It’s still not clear which bomb will go off first, but a bunch of fuses have gotten very short indeed. Here’s a survey of old crises that are finally coming to a head.” You want to see something that blew up this week?

“In the past week the ten-year interest rate increased by 12%. That is a monster change. This equates to 2,000 Dow points or 240 on the S&P,” writes Bruce Krasting in his essay “Are the credit markets getting unstable?” If that trend continues, the fuse will light the powder and western civilizations financial system will come down hard. The price on the benchmark 10-year note edged lower, pushing its yield to 3.20%, up from Thursday’s yield of 3.14%. Last Friday’s losses continue what has been a sharp decline in bond prices.

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Ron Holland said, “Today we find the United States and most of Europe in a similar situation. We risk an eruption and collapse of the mountain of unsustainable sovereign debt built up over the last two decades. Frankly, the U.S. dollar and national debt situation is so dire and our means to contain a sovereign debt crisis so limited by multiple wars, Washington’s debt and political incompetence at home that anything could happen—almost overnight. Even a minor foreign policy or economic event like a Greek default or Middle East crisis could wreak havoc with the precarious interlocking sovereign debt pyramid in the West. American and most European governments and the central banking elites, which created the criminal sovereign debt fiasco, are only trying to buy more time to delay the inevitable. This inaction means the threat of an immediate U.S. dollar collapse cannot be ruled out. Therefore, readers who have not protected themselves certainly have cause to worry because now could be too late.”

We are now only 60 days from the need of the United States government to fund half a trillion—467.4 billion to be exact—dollars of debt.This is the amount of debt that matures through August 31 and has to be rolled over or the U.S. is bankrupt… in every sense of the word. Treasury must “roll over” almost $500 billion in debt that matures during August 2011. New debt is issued and the proceeds are used to repay the maturing debt plus interest due. Treasury will require market access throughout August to avoid defaulting on maturing debt. About $380 billion in short-term T-bills maturing, plus $90 billion in long-term securities,” reports Tyler Durden.

Greece agreed last week to bind itself in another round of debt servitude. Violent demonstrations notwithstanding, members approved another round of tax increases and spending cuts to keep Europe’s own extend-and-pretend game going a while longer. Think of Greece as maxed out on five credit cards, taking on a second part-time job, holding yard sales and applying for a sixth card just to keep up minimum payments on the other five. Everyone knows it’s a losing game but they, as well as other governments around the world, have been playing at the table of unlimited debt through credit.

The world’s financial system is hanging by its teeth and the entire western world is ailing from debt overdosing. What we have been experiencing these past decades is roaring prosperity compared to what is coming down the road. As the economy collapses life is going to get very strange; our problems and the chaos are going to get a lot worse.

The free market is dead and we have all arrived at a sort of involuntary socialism where the largest banks rape and pillage everyone else. “At the start of the second half of 2011, with a global economy in complete disarray, an increasingly unstable global monetary system and financial centers in desperate straits, all this despite the thousands of billions of public money invested to avoid precisely this type of situation. The insolvency of the global financial system, and of the Western financial system in the first place, returns again to the front of the stage after just over a year of political cosmetics aimed at burying this fundamental problem under truckloads of cash,” writes GEAB.

There is no other possible end state then a full collapse of paper and digital wealth, which in today’s world would be a catastrophe of civilization-destroying capacity. Silver Shield says, “The dollar collapse will be the single largest event in human history. This will be the first event that will touch every single living person in the world. All human activity is controlled by money. Our wealth, our work, our food, our government, even our relationships are affected by money. No money in human history has had as much reach in both breadth and depth as the dollar. It is the de facto world currency. All other currency collapses will pale in comparison to this big one. All other currency crises have been regional and there were other currencies for people to grasp on to. This collapse will be global and it will bring down not only the dollar but also all other fiat currencies as they are fundamentally no different. The collapse of currencies will lead to the collapse of ALL paper assets. The repercussions to this will have incredible results worldwide.”

“Those areas that have lived highest on the hog in the dollar paradigm will most likely be the worst places to live when the dollar collapses. We will not be as fortunate to muddle through this collapse like we did in 2008 when it was a corporate problem. This time around, it is a national and global problem. The global Ponzi scheme has run out of gas as the demographics decline, as cheap abundant oil declines, as hegemonic power declines,” continues Shield.

Peter Yastrow, market strategist for Yastrow Origer, told CNBC. “What we’ve got right now is almost near panic going on with money managers and people who are responsible for money,” he said. “We’re on the verge of a great, great depression. The Federal Reserve knows it.” And there is nothing they or anyone can do to stop it.

If you think that the banking system of the western world is strong enough to guarantee the debt of the western world, you’re totally out of your mind. That’s the reason they’ll do everything possible to paper over the Euro crisis to prevent the defaults in order to prevent another crisis in banking that definitively would occur, that absolutely would occur from a default. This fact is ravingly positive for gold. You would have a complete collapse of the western banking system if Greece goes down,” writes Jim Sinclair.

The middle classes around the world are being impoverished just to pay interest on the sovereign debts to the banking elites who are enjoying the life of the filthy rich.

The world is just waiting for the spark to start the run-out of the dollar and our Treasury debt. Any serious financial or natural disaster could trigger the long overdue collapse and bring the Ponzi-type deck of cards down almost overnight on top of us. In the meantime Washington and European governments will simply throw its people’s wealth and promised benefits at the problem thus buying them more time to do what they do best—steal all the money and power they can.

Concentration of wealth is at obscene levels and these are the people that Jesus the Rabbi talked about when he talked about the rich, the eye of needles and the chances of getting into heaven. From what I have seen these people are not planning on going to heaven and in fact have been spending billions of their dollars building underground centers and complexes. Seems like human hell for can you imagine these people having to live in tight quarters with each other?

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Comments:

  • Jay

    Yes, I have imagined them living together in underground bunkers miserably after the collapse. That is the only thing that makes me smile about their plans. What will they do when they don’t have a mass consciousness to feed off of? What will the Hollywood elite do when they have no audience? SUFFER. That’s what they will do.

  • Helix

    Sorry, but fiat currency disasters don’t bring about the end of the world. The astronomical debts that are currently all the rage to castigate are essentially two things: agreements between people, and ink spots on paper. The bottom line is that agreements cannot always be kept, and the shape of inkspots on paper can be changed with a few keystrokes and a click on the “Print” button.

    There is bno question that we are in for a great deal of economic turmoil. However, histroy is replete with such occurrences, and the lessons of histroy in such cases is that the human race muddles through and comes up with the next thing that works, at least for a time.

    My advice: get yourself enough gold and silver to last for a few years, have enough cash set aside (not in the bank) to pay your bills for 6 months, and find a start making friends with your neighbors so self-help will be a possibility should the need arise.

    Economies alwyas eventually adjust to current realities. Massive debt “restructuring” is going to take place, which will bring about a commensurate price restructuring. After the convulsion, people are simply going to pick up the pieces, put them together into something that works, and go on with life.

    Just to be sure though, you should probably get yourself an assault rifle and 5000 rounds of ammo. You do have to get to the other side of the convulsion.

    • donna

      agree 100%

  • dan dunn

    web “U + S total pub pvt debts $198t two hund tril 12 zero,
    west gov’s cant pay prin, only for now pay intere st.”

  • King

    Dear Dr. Sircus:

    I would ask you to elaborate on what you mean by “involuntary socialism” In your recent post you wrote: “The free market is dead and we have all arrived at a sort of involuntary socialism where the largest banks rape and pillage everyone else.” This is an incoherent sentence in the sense that there’s no such thing as an “involuntary” socialism (equally incoherent is the banks “role” as described in your sentence because socialism has nothing to do with “raping and pillaging everyone else”…that, my friend, is the role of capitalism). For the record, socialism has historically been (and can only be) brought about by a proletarian (“working” class people) revolution that aims at correcting the fundamental contradiction between the means of production (which is “socialized” by its very nature because products are made by a network of people working together i.e., in a socialized manner) and the appropriation of these products…that is THE number one root cause of the worldwide calamity that is manifested as widespread starvation, poverty, spread of preventable diseases and a host of so many other societal and environmental ills too many to name here (which in any event would be unnecessary to point them out to you since you do a great job at writing about these all the time). It would do you and your readers a world of good if you were to take a critical look at what socialism is and educate others (who like myself look forward to and love to receive your posts) about how socialism can be the catalyst that will truly prove to be the realistic paradigm shift that the world needs in order to advert the inevitable destruction that capitalism and its “free market” ideology is leading humanity towards. Socialism by its very definition can never be something that the banks (large or small), governments or the ruling elite can use against the masses for their own advantage (socialism’s power is only good in the hands of the masses)…so please, I beg you that you reflect on what you wrote, correct it, and in the future not spread such misinformation that can only be used to perpetuate fear and hatred by bashing the one and only clear means that the masses of oppressed people have at their disposal in order to overcome their slavish conditions brought upon them by the ruling elite (capitalists). They (the ruling class and their puppet, the “state”) have done an amazing job at fear mongering and making people hate “socialism” without any help from you. To misidentify and misinform the masses about what socialism is and how it can change the world for the better by creating an egalitarian world society is equal to taking away the greatest power that the masses of people already posses, but know not how to wield. Power to the people!

    • Nick

      Here Here! For an authentic socialist perspective on the many dimensions of the rapidly unfolding global crisis, and also to learn about how to help build a socialist party that can offer realistic leadership to people facing growing levels of hardship, have a look at http://www.wsws.org.

      • King

        Thanks Nick, WSWS is definitely one of the best alternatives of news/commentary/historical sources to the mainstream media. (I’ve been a frequent reader of that site for years). I must say i’m disappointed that Dr. Sircus did not reply to my comment but more importantly what he wrote in the first place. I believe that he has and continues to provide his readers with invaluable medicinal/healing information but when it comes to the economic models and the roles that they (whether feudal, capitalistic or socialistic) play in everyday life he seems to take the right-winged hysterical amber alert “the socialist are coming! ‘they will punish you for being successful and steal your liberties and turn you into slaves!” approach. This is evident in the sentence I took issue with in his posting. There’s nothing involuntary about socialism, and to write that is telling as to ones immaturity in matters of economics and how they play out everyday since the advent of capitalism that sprung from the industrial revolution. I believe that the time is ripe for a much needed new industrial revolution that reinvents not just how what we produce but how much of it, what sources of energy we use for production (sustainable and renewable versus “oil” and all its derivatives) that prioritizes the environment’s overall well-being (versus polluting it and exploiting it to a irreparable degree as we have done thus far) and ALL the planets ecosystems above all other things and NEVER considers profit at all…then and only then will we see a truly egalitarian world where we don’t seek to exploit everything and everyone for the personal gain of a few…of course that has nothing to do with the unpredictability of natural phenomenon that we cannot control regardless of any mode of economics.

        • donna

          That sentence makes perfect sense to me.

  • Gilgamesh

    Financial Collapsing could happen only if it is artificially planned, or created, and even that would be almost impossible.
    After world war 2 England and Europe was in total ruins, and without the fiat money it would be still in ruins.
    The fiat money system could continue to build countries, and civilazation indefinitely.
    In my opinion there will be no Worldwide deep depression and financial collapsing.

    • http://www.robinwestenra.blogspot.com Seemorerocks

      Right! The Great Depression never happened!

      • JackStraw63

        With no comment on the accuracy of Gilgamesh’s comment, your reply has a glaring error. The Great Depression preceded WW2. Indeed, it was America’s investment in winning that war that is widely considered the catalyst for finally ending the Great Depression.

    • falsework

      No NO. Infinite growth is a myth with the present system with is fiat-DEBT based. Without wages going up the debt catches up to you and the nation/states. If you have wages going up to keep up with the fiat money printing you’ll eventually get massive inflation and untability.

  • Tom

    I think the general thrust of the article is correct but you can’t have it both ways when you talk about the value of money. When big depressions occur the value of money, even fait paper, goes up not down. There is a scarcity of money to repay debt. Cash is king. So put some cash aside for when the banks close their doors.