The Global Banking Addiction

The addiction to fiat money is huge. The value of this wealth on paper that circles the globe is difficult to estimate. The Bank for International Settlements guesses at $600 trillion dollars deduced by wading through tomes of data. Global gross national product is estimated at $50 trillion dollars yearly. If that figure is correct, the world is overextended by about 12 years of global production. All the credit and faith in government cannot pay for the debt that the International Society of Bankers has managed to create in the form of fiat money. The people of the world cannot pay the debt that has been created nor can the bankers except by printing more paper. How much of the debt is secured by real assets is impossible to say although a guess could be made based on the fractional reserve. Commercial banking has become addicted to creative banking procedures in an effort to create larger profits. Unfortunately, because of the complexity of a dozen creative banking instruments like SIVs and CDOs, even the best guess of the amount of real debt is probably impossible to calculate. The global banking economy is in an intimidating and complex situation.

The unease in banking and finance about subprime mortgages gives the world a tiny snapshot of what is ahead based on the current system in place. Other banking “derivatives” within the industry include private-equity, mutual funds, pension funds and hedge funds. This debt is a major issue since every piece represents a debt that must be repaid. When a creditor expects money, the demand must be met by the debtor. If enough default exists within the global banking economy or a smaller banking community, a house of cards scenario will ensue. The pursuit of the fractional reserve virtually guarantees that the global addiction to fiat money will backfire as bank write-offs for bad debt are posted.

Someone will bear the loss first. A banking conglomerate can bear catastrophic losses based on worthless credit that has been extended as debt. The infection can quickly become epidemic, much as the subprime mortgage problem spread to the entire mortgage industry and continues to proliferate in the global banking system. A collapse of the housing market along with a collapse of other asset markets is virtually inevitable based on the current global debt structure. The addiction to the illusion of money can create a global catastrophe as the International Society of Bankers actually possesses most of the gold and worthwhile assets as security including the people of the nations in debt. The slavery to this “New World Order of Banking” will become apparent to all involved. The reality is that this scenario is effectively in place. It just has not been noticed by most people yet. The reality of world addiction has not set in.

In the meantime, central banks or Federal Reserve bankers see the danger in the regional global markets and are ready to stand by with more fiat money to bolster liquidity where it is needed. Bankers require security and more often that security is becoming more speculative in nature. The International Society of Bankers has no intention of absorbing junk security. They clearly specify that they are not in the position to bail out mismanagement and malfeasance of the commercial banking and finance industry. Hyperinflation/devaluation caused by printing of more currency threatens to make some major currencies worthless. In order to overcome this plague, a redesign of the global banking and financial system seems in the immediate future. Quiet rumblings persist even now. This rumbling makes sense since national economies or even the global economy could be effectively shut down while the redesign and its negotiation are in the works. This would not only be counterproductive, but bite into further profits that the International Society of Bankers can make. In the meantime, commercial bankers are oblivious as they seek to pursue their regular course of business and profits in the hope that new global change will pass them by. ~ E.M.