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February 17, 2016


This Is Why America Is In Grave Danger: The Accelerating Death Of The Global Economy Awaits The Coming Derivatives Massacre - How Long Before These 'Weapons Of Mass Destruction' Are Unleashed? 

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By Godzilla - All News Pipeline

We all can see how the economy is slowing down. Gas consumption is down to 1995 levels, The Baltic Dry Index is at it's lowest levels EVER and commodity prices have tanked. So whats really going on? There is a trend that's been happening since 1999 that is quite interesting. These trends could be an indicator of our future economy, as in THIS YEAR because it precedes the election of new President. So let me explain.

In 1999, all was great. The Dot Com industry was making millions for people and the NASDAQ was booming. In February of 2000, the Federal Reserve began raising interest rates, towards the highest since 1995. At the same time, the economy was slowing. A poor holiday shopping return in 1999 disappointed the Dot Com industry. On the 12th of April the NASDAQ dropped 386 points, at the time, the lowest one day drop in history. By the time newly elected President G.W. Bush entered office, the NASDAQ had lost 60% of it's value, erasing 7 trillion dollar in wealth.

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The Dot Com bubble was fueled by the Main Stream Media, the so called experts and even the Chairman of the Federal Reserve. The Dot Com stock bubble was an asset that that turned into a bubble which popped shortly before the elections of G.W. Bush. This provides some clues for a trend. Let's look at the facts:

A bubble (of assets) emerges and grows on very low Federal Reserve interest rates.

Experts, the media and the Chairman of the Federal Reserve say's everything is fine and growth will continue.

The Federal Reserve raises interest rates.

The economy begins to slow down. 

The Dot Com bubble bursts just before the Presidential election, G.W. Bush's first term.

Shortly after his election, President Bush makes several speech's about the importance of home ownership. The next "bubble" has begun. The new asset was housing. In 2001, the Federal Reserve began dropping interest rates that flattened about about 1%. This helped the housing market explode as everyone wanted a house. Housing prices skyrocketed. The banks began giving loans to people who really couldn't afford them, with a lot of pushing and help from Liberal lawyers and the Federal government. The banks didn't care, because default left the bank with a house, at the time, rising in price.

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No down payment, low interest rate home loans, or sub-prime mortgages, became the fad. The banks desire for profit decided to package up the regular mortgages with the sub-prime mortgages and sell them to other banks, pension funds, hedge funds and sovereign funds. The became know as CDO's, collataralized debt obligations. Experts appeared all over the news over the years, claiming that housing was not a "bubble". The Federal Reserve began raising interest rates, by 2007, they had reached 5.25% (from 1%). The result was that sub-prime mortgages defaulted in huge numbers. As more and more houses hit the market, prices plummeted as well as overall consumption. The next crisis had begun and would reach it's peak in the Fall of 2008, right before the Presidential elections.

CDOCDO's and houses became worthless in short time and nobody was buying. Lehman Bros lost their ass and filed for bankruptcy on September 15, 2008. The bubble had burst. By the end of November of 2008, Americans lost one quarter of the net worth. Stocks went down 45% from 2007 highs and housing prices dropped 20%. The overall loss doubled the Dot Com bubble fiasco, as 14 trillion dollars of wealth was lost. The big banks, Citigroup, JP MorganChase, Goldman Sachs and Bank of America were heavy buyers in CDO's and this spread throughout the world. The housing bubble burst, 2 months before the election of Barack Obama. Let's see if the trend applies:

A bubble (of assets) emerges and grows on very low Federal Reserve interest rates.

Experts, the media and the Chairman of the Federal Reserve say's everything is fine and growth will continue.

The Federal Reserve raises interest rates.

The economy begins to slow down

The housing bubble bursts just before the Presidential election, Barak Obama's first term.

Everything that happened in 2000, happened in 2008. We had both an asset bubble explosion that wiped out trillions. Let's move to what this cycle holds as far as the trend. The Federal Reserve recently increased interest rates, which had been at near zero. The economy is slowing, as I stated above. The Bloomberg Commodity Index is at a low not seen since.....2008! This slump is a clear indicator of a slowing economy on a Global scale. Holiday spending of 2015 was the worst since 2008. US manufacturing is contracting. The EXPERTS are saying that things are great.

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Following the checklist, we have experts saying the economy is fine. We have the Federal Reserve raising interest rates and we a have a slowing economy. Only one thing left, the asset bubble! Looking back at the Dot com and Housing bubbles, we have something that easily achieves bubble status. This is one of those things that seems to grow and grow in the economic world. On September 18th, 2008, Hank Paulson told Congress that 5.5 trillion dollars would disappear by 2pm if the government didn't take action. The threat was... keep the big banks alive or else. Probably the biggest con job in history.

Between TARP and various actions, including the actions of the Federal Reserve, it has cost about 20 trillion bucks since then. I don't think anyone believes the US national debt went from 9 trillion to 19 trillion since 2008 because the Federal government grew that much, do you? Now the "Too Big To Fail Banks" have a safety net, basically to do what they want. It is resulting in the ultimate bubble....it is the asset that will destroy everything, when it pops, and it will pop. It is the most dangerous casino gambling market in the world, the Derivatives Market! The total net worth of all outstanding contracts is 559.2 TRILLION DOLLARS, according to the Bank of International Settlements.

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A derivative is a speculative contract or a bet placed on stocks, commodities, mortgages and other economic things like interest rates. It's simply legalized gambling. Usually, gamblers don't fare too well, but the house always wins. We are not the house, in case you wanted to know. As I type this, there is not anything of economic worth that doesn't have a derivative attached to it. ALL DERIVATIVES ARE BETS! The CDO's that crashed with the housing bubble were just a small part of the derivatives market, in 2008, only 500 billion dollars worth of of the derivative market. NOTHING compared to the 559.9 TRILLION dollar derivative market we have today.

Let's look at the exposure to derivatives of the top five "too big to fail banks".

Citigroup: Assets = 1.8 Trillion dollars Exposure to derivative = more than 53 trillion dollars.

JP Morgan/Chase assets = 2.4 trillion dollars Exposure to derivatives = more than 51 trillion dollars.

Goldman Sachs assets = less than a trillion dollars Exposure to derivatives = more than 51 trillion dollars

Bank of America assets = just more than 2.1 trillion dollars Exposure to derivatives = more than 45 trillion dollars

Morgan Stanley total assets = less than a trillion dollars Exposure to derivatives = 31 trillion dollars.

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Overall, the biggest US banks collectively have more than 247 trillion dollars of exposures to derivatives contracts. That's 13 times the US national debt. This kind of gambling has inflated the biggest economic bubble in history. The derivative bubble, like all bubbles, will burst. Let's review this trend again:

A bubble (of assets) emerges and grows on very low Federal Reserve interest rates.

Experts, the media and the Chairman of the Federal Reserve say's everything is fine and growth will continue.

The Federal Reserve raises interest rates.

The economy begins to slow down

The derivative bubble bursts just before the Presidential election of.........?

If this short term trend becomes reality, I can't even imagine how this will play out or what it will result in. The "Too Big To Fail" banks have put themselves in a position where they can't be bailed out on this one. Too Big To Fail is no longer true, Too Big To Save may be the new term for these huge banks in 2016. 2016 could make 1929, 2000 and 2008 all, combined, look like a picnic. Hopefully, you are as prepared as possible to weather this type of economic storm. I can't find words to describe the possible calamity if this were to occur. Can you?

The new videos below tell the tale of economic collapse that we're now watching unfolding all across the world.
















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