Criss-Crossed Fuses And Lit Bonfire by Jim Willie
Many are the potential fuses to be lit, which would create the conflagration, the massive bonfire of the bond vanities and bank charades. Many are the fuses lying around, all criss-crossed, all exposed, all overlapping each other in highly dangerous manner. If any single fuse is lit, then several will light and the detonation arrives. It is unavoidable since the financial world is so deeply interwoven. Never in modern history has the global financial structure been so badly weakened, so totally corrupted, so thoroughly undermined by control mechanisms, so intensely defended by sanctions even war. In 2007 and early 2008, the Jackass warned of a mortgage bust that would alter the global system forever. It happened with far reaching consequences which endure to this day. In recent months the Jackass is warning of a Systemic Lehman event, where several major national systems are at heightened risk of a similar bust like what happened in September 2008. Except this time, the entire global financial system will erupt like a debt volcano, with several epicenters, all located in the West. The big Western banks are all lashed together, all tied to each other. The banker cabal believed that the interconnectivity within their bank structures would make them all immune to failure risk. The reality is that the failure of any one major bank guarantees the systemic breakdown of all of them.It will erupt like a cave-in of the flying buttresses at the Notre Dame in Paris, with numerous bank (churches) collapsing, all located in the West.
When the collapse occurs, the solution will finally be discussed, the solution avoided for eight full years. THE GOLD STANDARD WILL BE INSTALLED. It will first arrive in the trade payment system. Then it will arrive in the banking reserves system. Lastly it will be seen in the gold backed currencies. The paper game has gone on since 2008 in grand style and unspeakable corruption.
This article attempts to list many threats to a systemic breakdown from ignition of several megatons of TNT dynamite. The financial press has often mentioned derivatives as capable of inflicting damage and devastation like with nuclear explosions. The systemic breakdown is due to occur soon, actually way overdue to occur. The prevention has been a massive global project run by the major central banks in coordination with a few ministries of finance. The primary control center is the USDept Treasury and their Exchange Stabilization Fund. This truly gigantic multi-$trillion fund is a very well-kept secret. Its recent activity has been to permit the USTreasury Bond yield to rise, but without pushing down the sacred USDollar. Not much mention has come from the sleepy lapdog financial press on this unusual anomaly. The motive is to keep the Japanese happy, since they are the last holdout among the $1 trillion USGovt debt holders. The Chinese are dumping USTBonds, but the United States cannot afford for Japan to dump USTBonds at the same time.
TOO MANY CRISS-CROSSED FUSES EXPOSED
The following are numerous potential lit fuses, with brief descriptions of the risk and effect. It is in no way complete as a list, but it might be somewhat comprehensive. No attempt will be made to be very thorough in the description of each potential fuse. That role is played with the Hat Trick Letter, with fallout effects discussed and analyzed in more thorough fashion.
Deutsche Bank failure
The actual failure has been going on for at least a couple years. Recall that D-Bank unwillingly accepted the merger & acquisition of Bankers Trust back in 1998. It became the European outpost for the rafts and scads of bank derivatives, managed outside the United States, free from regulation. The giant German bank has a net worth of around minus $1000 billion, or minus EUR 1000 billion, no matter the unit. All manner of relief and patchwork and emergency liquidity and false accounting and total lies are associated with this giant cesspool of a bank. They hold all types of ruined paper debt, and hold a mountain of Gold contracts which China wants to acquire. The New York and London crime center banks are vulnerable. When it blows out of control, the Western banks go poof and the USDollar dies.
USFed rate hike
The USFed might not be able to avoid an official rate hike. Ignore the fake rate hike in December 2015, which was really a Reverse REPO episode well concealed. That event permitted more leverage by the big US banks. In the last few months, the USTreasury Bond yields are all rising, including the short maturity. The long maturity might cause a derivative accident soon, since the Tower of Bond Babel cannot tolerate the big moves seen. The USFed might have to hike rates a notch, just to keep the short maturity of the USTreasurys from fracturing. But the long maturity is also at risk. When the hike comes, the Western banks go poof and the USDollar dies.
USDollar rejection in trade payments
The United States has been paying for its massive $500 billion trade deficit with paper IOU rubbish certificates called USTreasury Bills. The US nation has been a freeloader for over 20 years, lacking critical mass in industry, covering the bills with printed money of no intrinsic value. The Asian producers object loudly. In the last year, many foreign producers have been rejecting the USDollar as payment. Bobcat Inc (warehouse forklifts, construction backhoes) is only the most visible. The port facility confusion and mayhem is given too much attribution to the Hanjin Shipping bankruptcy. The truth is that the USTBill is being rejected as valid payment, despite the many empty disputes of this claim. The other shoe from those American feet is the end of the USDollar as global currency reserve. When the rejection is more broadly understood and openly discussed, the Western banks go poof and the USDollar dies.
USTreasury Bond complex bust with derivative
The bank derivatives are a $700 trillion set of buttresses, which if capably observed, would frighten the wits out of all people who have bank accounts. They are heavily leveraged contracts which hold the financial system together like glue, but lately more like chewing gum and bailing wire. These toxic units are called assets, while bank accounts are called liabilities subject to loss and confiscation (see bail-in procedures). The derivatives cannot tolerate big movements in bond yields. They serve as the site to produce artificial bond demand for the USGovt debt, whose supply is between $1.0 and $1.4 trillion per year, but without benefit of actual real investor buyers. The Asian bond dumping has put huge strains on the derivative machinery, which cannot sustain the pressure. The derivative jig is up very soon, to reveal a massive Ponzi Scheme in USGovt debt that exceeds $20 trillion without much attention or importance given to it. When the derivative complex shows wider cracks and open gushes of bond blood, the Western banks go poof and the USDollar dies.