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Who Will Be the Last to Crash?

lasttocrashThis is the question that astute investors are forced to ask themselves these days. No reasonable person believes that a system of ever-expanding debt can resolve painlessly. It simply cannot happen… not, at least, until 2+2 stops equaling four.

But the international money system, while deeply interconnected, can implode in sections. In fact, it’s highly unlikely that it will crash as a single unit.

So, if you have significant moneys to invest, you end up coming back to our question: Who will be the last to crash? Once you decide that, you can concentrate your assets in that place, hoping to come through the crash with at least most of your value intact.

Let’s look at several aspects of this:

#1: Background statistics:

  • World debt is upwards of $200 trillion, and growing steadily. World GDP is $70-some trillion, only about a third of the debt. This debt will not be paid back. Massive amounts of debt will have to be written off in losses.

  • US debt is north of $18 trillion. (Amazingly, *cough*, it hasn’t changed in months *cough*.) Forward promises are north of $200 trillion, meaning that a child born today is responsible to repay $625,000. And since roughly half the US population pays no income tax… and presuming that this newborn will be a member of the productive half… he or she is born $1.25 million in debt. Such repayments will never happen. Most of those debts will not be repaid.

  • Japan is worse off than the US. The UK is bad. Many EU countries are worse.

These numbers, by the way, are ignoring more than a quadrillion dollars of derivatives and lots of other monkey business. (Rehypothecation, *cough*, *cough*.)

#2: No one wants to rock the boat.

Informed men and women understand that the entire system is unstable. Probably a majority of them are simply hoping that it holds together until they die. A few dream that magical new inventions will kick-start the system into a new orgy of debt, blowing an even larger super-bubble that lasts through their hopefully longer lifetimes.

But informed people also know that the system stands almost wholly upon confidence. If the sheep get scared enough to run away, the whole thing ends… and no one is ready for it to end.

So, heavy investors speak in soothing tones. They don’t want to spook the masses.

#3: We’ve already had warning shots.

Last year, the International Monetary Fund (IMF) published a horrifying paper, called The Fund’s Lending Framework and Sovereign Debt. That paper, in turn, was based upon one from December of 2013, called Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten.

The December 2013 document, right at the start, says that “financial repression” is necessary. Here’s what it says (emphasis mine):

The claim is that advanced countries do not need to resort to the standard toolkit of emerging markets, including debt restructurings and conversions, higher inflation, capital controls and other forms of financial repression… [T]his claim is at odds with the historical track record of most advanced economies, where debt restructuring or conversions, financial repression, and a tolerance for higher inflation, or a combination of these were an integral part of the resolution of significant past debt overhangs.

So, in order to fix debt overhangs – currently at horrifying levels – financial repression is not just an option, but required.

And of course, they’ve already had a trial run, when they stole funds directly from individual bank accounts in Cyprus.

The IMF report goes on to say:

[G]overnments can stuff debt into local pension funds and insurance companies, forcing them through regulation to accept far lower rates of return than they might otherwise demand.

[D]omestic defaults, restructurings, or conversions are particularly difficult to document and can sometimes be disguised as “voluntary.”

We have a pretty good idea of what’s coming down the pike.

But again, Goldman’s Muppets are not to be told about this. And truthfully, most of them don’t want to know.

#4: We have no view of what’s happening in the back rooms.

People make large bets on what Janet Yellen and the Fed will decide next, but when we do that, we overlook something very important:

Yellen is merely an employee of the Federal Reserve, not an owner. And we don’t know who the owners are.

We do know that the Fed is owned by private banks, and that it has a monopoly on the creation of US currency, but we really don’t know who owns the shares. The true owners are almost certainly reflected in the roster of primary dealers, who skim Federal Reserve units as they’re being made, but we don’t know much more than that.

So…

Who are the people that Yellen takes orders from?

What do these people want?

What are their long-term positions?

Who might they protect, aside from themselves?

We don’t have real answers to any of these questions. From our perspective, the guts of the machine are hidden behind a curtain.

#5: The US is playing to win.

One thing we do know is that the US has a strong hand. Within a general deflationary situation, the Fed can print away. And they’re propping up the US markets quite well… for now.

Feeling their power (after all, they can blow up more stuff than anyone else!), the US is throwing their weight around, forcing nearly every bank in the world to play by their rules. (Think FATCA and fining foreign banks.) And for the moment, it is working.

Bullying everyone else over the long term may, however, not be viable. No one – especially people like Putin and the Chinese bosses – likes to be slapped around in public. And they are not powerless.

Conclusion: Most Bets Are on the US

Europe isn’t looking good. Japan isn’t looking good. The UK is holding, but as mentioned above, its numbers are horrible. Switzerland seems to be in-between strategies. China has problems. Russia has problems. The BRICS have never been stable.

That leaves the US. My impression is that most serious investors would rather hold dollars than yen or euros; most big businesses too. Their bets are on that the US will crash last.

So, are the Fed and the US Treasury doing this intentionally? Are they quietly pulling the pins out from under the others, making sure that they’ll be the last currency standing? I have no inside information, but I’d bet on it.

Remember, the gang on the Potomac has most Americans believing that whatever they do overseas is pure and holy. Furthermore, 99% of their serfs will reflexively obey any order they give. So, why shouldn’t they play dirty? They have the best bombs and a somnambulant public.

For now.

Paul Rosenberg
www.freemansperspective.com

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  • Freespirit

    Who Will Be the Last to Crash?” is the question in your heading ( Boldface emphasis ,mine) yet you only suggest ENTITIES, such as, but not limited to, the Fed, Switzerland, Japan and LAST but definitely NOT least, the United States, which Americans are foolish enough to believe is still a Republic, YET “Who” implies a person or persons.!!!

    You are a well informed individual Paul, so I ask myself, and YOU, obviously, by virtue of this comment, WHY, you and as so many, for various reasons, some VERY nefarious and cowardly,( so I have learned), don’t mention NAMES to satisfy the word “Who” in your heading and used by so many in their articles . They ask or accuse WHO but go on to accuse and name ENTITIES

    Entities are INANIMATE and thus cannot do anything. Only people can do things, yes,via entities, such as driving cars, operating computers etc……..PEOPLE do things and I am sure you know that, so once again why do you avoid NAMING PEOPLE???

    If this were my article I would have said: The ONLY BENEFACTORS of the DELIBERATE, CREATED and DIRECTED coming Collapse are : The Rothschilds, Warburgs, Rockefellers, Soros, British Royal Family and the Vatican and ALL of their wealthy hangers-on, such as, but DEFINITELY not limited to Bill Gates

    You see, Paul DEBT is only,today digits on a screen or in books BUT the ASSETS for which the DEBT has a CLAIM, EXIST in Reality

    My point,Paul is that yes MUCH of the Debt will be “written” OFF……….the Computer screen or books….. but AFTER the “Dust has Settled” those sick psychopaths will “OWN” ( albeit by Fraud,Theft and War) MOST of the ASSETS on this Planet, with the exceptions of those in Russia, Iran and China…..makes one think about and understand why all the animosity by the same criminals ( Rothschild et al) via their STOOGE Presidents, Prime Ministers, Lords, Duke ,Kings etc., towards those 3 countries, huh???

    I haven’t even mentioned that those monsters like Rothschild, British Royal members and the Vatican scum have MOST of that STOLEN wealth HIDDEN in INTERNATIONAL TRUSTS, so that we actually are deceived into thinking they are not OVERLY wealthy.and , BY their RULEs ,we cannot get our unwashed hands on……..YET.

    Well, most of us are fooled.

    It is amazing what “Pitchforks” and HANGMANS ropes have and can do when the RIGHT time comes

    But then you know all that don’t you Paul?

    • Hey You

      Many people know that, but as the old saying goes, “Who will bell the cat”?

      Actually, I own a four pronged pitchfork. It is a formidable tool. Perhaps there needs to be more though to using it.

      • Freespirit

        Due respect to your response to my comment but I suspect, judging by your words, you MAY have missed my point.

  • Hey You

    The USA is an assemblage of solvern states. Thus, the federal system can implode without that implosion being as disastrous is it would be for other countries. Thus, encouraging secession of some USA states for the greatest good for residents

    • Klaatu Fabrice Aquinas

      Only if a state is truly sovereign. Which states besides ND have their own central bank? Texas is on track to build their own gold vault come Sept. 1. If the FED implodes say by end of year, only ND and possibly TX (depending on how much of their 500 metric tonnes [~$20 B] is physical) will survive ..

  • Bruno

    This may be true in case of a crash, which is a possibility, but not a sure thing.

    The other way to oblivion is decay, and decaying the US has been, at an ever increasing pace, for the past 30 years or so.

    A country decays through corruption, loss of values and morality, confusing freedom with total lack of rules and discipline…the Rome way in other words.

    And at the game of decay, the US certainly won’t be last.

    Actually, it might end up first…

  • olde reb

    Paul,

    My analysis of the Federal Reserve system finds it to be a Ponzi scheme
    that is inherently destined for bankruptcy. Money in circulation is
    increased in the amount of Treasury securities (as interest bearing
    securities) issued to the Federal Reserve system. The amount of the
    principal of the “loan” is thereby created—the interest is not.
    The interest to repay the loan does not exist.

    All such book entry money becomes the new reserves (inflation) received by the commercial banks. The multiplier factor of fractional reserve does not change
    this conclusion. If the debt is theoretically being paid off, the multiplier factor works against them.

    The scheme collapses when faith in the system fails
    and no more securities can be auctioned by the FRBNY. The faith is gone. It is the same s when Jimmy Stewart had a run on his bank in the movie. Ref.
    http://www.scribd.com/doc/48194264/rip-off-by-the-Federal-Reserve-revised

    The operation of the Fed further embezzles (currently) $3 billion daily using the auction accounts of Treasury securities which are controlled exclusively by the FRBNY.
    Ref. 31 CRF 375.3 ; Ref.
    http://www.scribd.com/doc/153024003/Amended-Complaint-Federal-Reserve-whistleblower

    What would Wall Street financiers do with humongous amounts of case from a
    Ponzi scheme ? My conclusion is at
    http://farmwars.info/?p=12078 NWO—DEAD AHEAD

    It is my conclusion it is the Board of Governors that is the incorporated entity (which has supervisory and regulatory control of the 12 Federal Reserve banks–each is a franchise) as a privately owned corporation that does not have to file corporate documents with the SEC. The BOG can fire any director of any FR bank without cause and without recourse. A question of who owns the Federal Reserve is then scoffed at and sidestepped.

    Their ultimate goal (according to internal memos) is to collect on the $18
    trillion U.S. National debt. Are you ready for austerity ?

    Perhaps my thoughts may be of interest.

  • Klaatu Fabrice Aquinas

    When you mention rehypothecation, I must ask what do you know about Lee Wanta?

    http://eagleonetowanta.com/

    Everyone hoping for a black swan. Well, he’s probably the only one we got. This forward thinking began in the winter of ’80, before the POTUS inauguration of Jan. 20, 1981. How’s that for vision? Perhaps there’s a bit more than a “human” intelligence factor here.

    On top of the ~$30 T (that is before the 20% compounded annually since it was earned in the 80s), Wanta has a “rainy day” fund of some 2000 metric tonnes (former USSR gold bullion). That is north of $80 B alone.

    Well, for perspective, lets look at this document: http://eagleonetowanta.com/wp-content/uploads/2015/04/US_Treasury_FederalTax_Payouts.pdf

    So who is Bonney, Tropos (Hyniak), Falcone? (the original deal now defunct) Any of these guys alive?

    As to owners of the FED, I might suggest Sheldon Adelson: (and I’m sure with proper water-boarding he can provide some more names)

    https://youtu.be/jE2_qmlKFVU

    Now as to US having the best bombs? That is certainly debatable ..

    http://www.veteranstoday.com/2014/11/13/aegis-fail-in-black-sea-ruskies-burn-down-uss-donald-duck/

    BTW, Keshe is alive. Apparently survived his poisoning. He will be with Mike Harris on Thurs. 7/9. Scott Bennett tomorrow, on the UBS fraud. Bennett is former Pegasus. Last American to interview/interrogate Saddam Hussein before hanging ..

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