Thursday, September 18, 2008

Credit Default Swaps and Option ARMS: A Killer Kombo.

Greetings...

As you might guess, your author has become a total financial junkie.

The reason is simple... I fear that we are headed towards Judgment Day.

With every bailout, bankruptcy, and foreclosure, we as a nation are walking through the minefield like a blindfolded, stone-cold drunk Wino.

We have no idea. Our Money Masters have no idea. Our politicians (except for Dr. Ron Paul) are more than useless.

We're fucked.

With that bit of positive news out of the way, there are three important articles I would like you to read, as they are all interconnected.

First up, please click here to read about AIG and the Brave New World of Credit Default Swaps (CDS).

It is thoroughly chilling, and absolutely likely that we will inadvertently step on a CDS landmine that not even Fedgov can fix without...

...printing (monetizing) massive amounts of debt. Indeed, according to AFS, the U.S. Treasury is selling 40 billion worth of bonds in order to help the Federal Reserve, a private central banking cartel repair the damage done to its balance sheet in the course of bailing everybody and their momma out, in addition to accepting toxic debt from a multitude of institutions.

Now, if the Fed, or the Treasury begins, this early in the game, to create massive amounts of money and credit to finance rescue operations for insolvent banks (like Washington Mutual, for example) and finance companies...

... imagine how insane things are going to get when the REAL mortgage crisis gets underway!!

In summary...

Please read the referenced material. I believe that if you do so, you will clearly understand what's at stake here.

My nightmare scenario goes like this...

Some direct or indirect financial complication is going to trigger a derivatives mega-event that only Fedgov (since they are the only ones with the power to create new money and credit) can handle. It will most likely occur as a bank or major financial house, crippled by the horrendous spike in defaults and foreclosures that will take place in 2009, will cause a chain reaction of derivatives obligations to be incurred that will force the government to act.

When this extinction level event takes place, it will deplete the reserves of the Fed and of the government bodies involved, (such as the FDIC) which will force the government or the Fed to create money and credit on an impossible scale.

This printing will trigger hyperinflation at worst, or seriously damage the country's economic rating on the world markets at the minimum. Once either of these occurs, its all downhill from there.

So will events transpire as I think they will??

Let's hope not. But in any event, these are the things you need to know, think about, and seek a qualified financial adviser to prepare for... in order to insure your and your family's economic survival.

One Love.

6 comments:

pjanus said...

Have you considered that the idea is to destroy Capitalism and replace it with a One World Government based on Socialism/Communism, with the Government owning everything?

Kirigakure said...

I've definitely considered the possibility... its just that I don't think that the Money Men are going to be able to escape from their own wicked web.

They've gone too far this time. The Chickens be coming home to roost like gangbusters, and I don't think our Money Men have the skills to wreak our economy without shooting themselves in the foot.

The main reason why I say this is because of the overwhelming derivatives risk...

ALL firms are on the hook. Even JPMorgan Chase, the most corrupt illuminist bank in America, has over 90 trillion dollars in contracts outstanding.

The system is so unstable now... anything can happen.

Of course, I could be wrong, and the Money Men might have everything under control. They might be able to pull this off.

This is why I am hedging my bets with Gold, Silver, real assets, food, and getting the hell out of debt as quickly as possible.

Prepare for the worst... hope for the best!

pjanus said...

I appreciate the reply. I was just being paranoid.

I had this crazy idea that if everything collapsed they could get rid of all banks and have one National Bank which they, the money men, would own.

They could then Nationalise everything else under the pre-text of saving the country from ruin and with a stroke of the pen they would own everything without paying a cent. No more private property for the man on the street.

Yes, way too paranoid.

Kirigakure said...

"I had this crazy idea that if everything collapsed they could get rid of all banks and have one National Bank which they, the money men, would own..."

Its not a crazy idea... I'm sure that many of our Money Men would love that idea. The issue is that to pull it off, and for the idea to be accepted, a "financial crisis" of epic proportions would need to occur, in order to scare the Sheeple into allowing such a thing to happen.

Unfortunately for many of these firms, the crisis at hand is (or was, now that the government is talking about buying ALL of the toxic debt) of such monstrous proportions, that even they cannot escape the carnage.

Now that the free market has been suspended (the bailout of all of the finance industry, the ban of short selling, etc), it looks like the banks have managed to move the crisis from their balance sheets to the balance sheet of the American people, which will terribly affect the stock of the United States Inc, which is the U.S. Dollar and T-Bonds.

Tricky tricky these banksters be...

Keoni Galt said...

Thanks Toku, for this very informative and fascinating link!

http://usa-the-republic.com/banks/federal%20reserve.txt

Damn...we as a nation are fucked.

Kirigakure said...

Libertarian...

If you and yours are prepared, then you will be fine.

But those who are not are truly screwed...