Is the World Economy Becoming One Economic Pyramid Scheme?

Is the World Economy Becoming One Economic Pyramid Scheme?

You’ll find this article very sobering to realize what a mess globalism has become.  It’s an excellent reason to question all the interconnections and centralizations between nations.  Has it become a de facto economic pyramid scheme?

Ask yourself how to we start to clean up this mess?  It has to be done.  What about getting each country to discount the debts of another?  What if all the debt was “flushed” and every country was reset to “0” balance? 

What ideas do you have?  Feel free to comment and post them below.   It’s going to take collective “think power” in resolving this.–No Name Attorney

The author of the article below, Michael Synder, has a B.S. in Commerce from the University of Virginia, a law degree (J.D.) and a Masters of Law in Taxation (LL.M.) from the University of Florida School of Law.

 

Why Is The World Economy Doomed? The Global Financial Pyramid Scheme By The Numbers

By Michael, on March 20th, 2013

Why Is The World Economy Doomed? The Global Financial Pyramid Scheme By The Numbers

Why is the global economy in so much trouble?  How can so many people be so absolutely certain that the world financial system is going to crash?  Well, the truth is that when you take a look at the cold, hard numbers it is not difficult to see why the global financial pyramid scheme is destined to fail.  In the United States today, there is approximately 56 trillion dollars of total debt in our financial system, but there is only about 9 trillion dollars in our bank accounts.  So you could take every single penny out of the banks, multiply it by six, and you still would not have enough money to pay off all of our debts.  Overall, there is about 190 trillion dollars of total debt on the planet.  But global GDP is only about 70 trillion dollars.  And the total notional value of all derivatives around the globe is somewhere between 600 trillion and 1500 trillion dollars.  So we have a gigantic problem on our hands.  The global financial system is a very shaky house of cards that has been constructed on a foundation of debt, leverage and incredibly risky derivatives.  We are living in the greatest financial bubble in world history, and it isn’t going to take much to topple the entire thing.  And when it falls, it is going to be the largest financial disaster in the history of the planet.

The global financial system is more interconnected today than ever before, and a crisis at one major bank or in one area of the world can spread at lightning speed.  As I wrote about yesterday, the entire European banking system is leveraged 26 to 1 at this point.  A decline in asset values of just 4 percent would totally wipe out the equity of many of those banks, and once a financial panic begins we could potentially see major financial institutions start to go down like dominoes.

We got a small taste of what that is like back in 2008, and it is inevitable that it will happen again.

Anyone that would tell you that the current global financial system is sustainable does not know what they are talking about.  Just look at the numbers that I have posted below.

The following is the global financial pyramid scheme by the numbers…

$9,283,000,000,000 – The total amount of all bank deposits in the United States.  The FDIC has just 25 billion dollars in the deposit insurance fund that is supposed to “guarantee” those deposits.  In other words, the ratio of total bank deposits to insurance fund money is more than 371 to 1.

$10,012,800,000,000 – The total amount of mortgage debt in the United States.  As you can see, you could take every penny out of every bank account in America and it still would not cover it.

$10,409,500,000,000 – The M2 money supply in the United States.  This is probably the most commonly used measure of the total amount of money in the U.S. economy.

$15,094,000,000,000 – U.S. GDP.  It is a measure of all economic activity in the United States for a single year.

$16,749,269,587,407.53 – The size of the U.S. national debt.  It has grown by more than 10 trillion dollars over the past ten years.

$32,000,000,000,000 – The total amount of money that the global elite have stashed in offshore banks (that we know about).

$50,230,844,000,000 – The total amount of government debt in the world.

$56,280,790,000,000 – The total amount of debt (government, corporate, consumer, etc.) in the U.S. financial system.

$61,000,000,000,000 – The combined total assets of the 50 largest banks in the world.

$70,000,000,000,000 – The approximate size of total world GDP.

$190,000,000,000,000 – The approximate size of the total amount of debt in the entire world.  It has nearly doubled in size over the past decade.

$212,525,587,000,000 – According to the U.S. government, this is the notional value of the derivatives that are being held by the top 25 banks in the United States.  But those banks only have total assets of about 8.9 trillion dollars combined.  In other words, the exposure of our largest banks to derivatives outweighs their total assets by a ratio of about 24 to 1.

$600,000,000,000,000 to $1,500,000,000,000,000 – The estimates of the total notional value of all global derivatives generally fall within this range.  At the high end of the range, the ratio of derivatives to global GDP is more than 21 to 1.

Are you starting to get the picture?

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Wall Street Fraudsters Must Go To Jail

Wall Street Fraudsters Must Go To Jail

When you have the number one (1) law enforcement officer (exclusive of the President) tells the Senate that he’s afraid to prosecute the Wall Street fraud banksters because their influence on the economy, then what has happened to our justice system?

Do you think that we need another Attorney General that has some chutzpah?

If what Attorney General Eric Holder is saying is true, then is this not the reason why they should be prosecuted?  When someone or something has too much influence, can they wrongfully distort our economic system and use it to their advantage?

Private monies are leaving Wall Street and the US (going off-shore).  Do you think that a growing portion of the public views that our economic system is rigged in favor of the “money changers”?   Or do you think that Wall Street fraud is healthy for our financial system?  If a certain segment is above the law, then should we pass legislation to put them under the law?

We also need to explore how this was allowed to happen.  For example, what role, if any, did the repeal of the Glass-Steagall Act have upon the Wall Street banksters running amuck?  Should Glass-Steagall be reinstated?  Should the “too big to fail banks” be broken up as were the oil companies in the early 20th century?

Watch this clip of testimony by Attorney General Eric Holder.  How does it make you feel?  Do you think that this is fair?   –No Name Attorney