Fractional-reserve banking, credit derivatives and fiat currency have not served us well since '71. Until Humpty Dumptys’ shattered eggshells at the bottom (credit derivative liabilities) are revealed, accounted for, the enormity of the crisis cannot be defined. All US govt. bailout efforts totalling about $13 trillion now have been to no avail, and the debt service derivatives and US national and public debt combined is higher than that by a vast unknown amount. It can be guessed at.

Derivative trading, as noted by the BIS (Bank of International Settlements)has topped $1.26 quadrillion a year and continues to grow. The derivative contracts administered by central banks are estimated at $700 trillion (reporting is VOLUNTARY to the BIS by the central banks!).

The money was borrowed for these contracts and interest is in the trillions. The world's GDP was $45 trillion last year. The US GDP was about $14 trillion and is subsiding. All the gold on the planet at $1000 an ounce can be bought for approx. $4 trillion according to a posting by Jim Sinclair a couple of years ago. Fannie and Freddie alone have just under $5 trillion in unmarketable mortgages of dubious value, given that there is no market for liquidation. Even with leeway, the leverage of derivatives on gold is astronomically high with all derivatives being essentially Unredeemable by any means.

The best and brightest of the political and financial heirarchies have essentially achieved infinity...We know the fate of Icarus...now,.what follows? A new currency, regional or not, is hardly able to be based on a mere $4+ trillion in gold, and all the silver in the world can be bought for an insignificant amount relative to gold's value and the worlds' impossible debts.

China, Russia, India and Brazil certainly want a new 'basket' of currencies and have demanded action...they are proceeding although the desire is in doubt. That the dollar is headed down is definite. The Fed, with the end of its $300 billion T bill purchases in Sept., has run out of its own money now. China has limited leverage on the US due to its own problems, but it has leverage, and the analogy is that the US and China are two interacting galaxies with shared problems circling slowly around one another, but inseparable financially....UNLESS China can break away.

China thinks it can break away in the near future, in spite of pain, and that will go hard for the US. Even China has only $2 trillion of Forex dollars, and just under a trillion in T bills and Agency Bonds (Fannie and Freddie). All of China's money, if loaned to the US, is not enough. They are wise not to loan any more than they have to to the US while they buy up as much equity elsewhere, as they are doing.

The US has come to the end of its debt-capitalist system, and the Obama administration has NOTHING to offer so far except unimaginative nationalization along discredited Asian and European lines.

At a macro level, this is about all I could come up with as a short summary of the predicament we are in. Central banks and federal reserve models were created just less than a hundred years ago, and were modeled gradually to serve the interest of nation-states, and, in recent decades to serve themselves.

Central banks, if they fade into the dustbin of history with nation states and as nation-state cultures and boundaries are rendered asunder by transnational, globalist utopian dreams, as they are being now, a new chaotic period will result as the world steps out of a 60-year old envelope of relatively predictable expectations of the past held together by the former glue of relatively financial structure.

The financial geopolitical estrangements are beginning now, and will be quite uncontrollable. Every country for itself is a theme developing in the EU now, cultures (European tribes) are recognizing they have a past worth holding on to, complicated by the immigration pressures of Islam on the Continent and the recognition that multiculturalism is bogus.

Americans are showing now that they have a past and traditions worth preserving and improving, especially as rejection, Jonah and the Whale style with the Dems and Obama begins to play out. We are broke and will have to start over after the institutionalized financial FRAUD is dealt with...we have enough capable people to do it.





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