Wednesday, March 20, 2013

Why Is The World Economy Doomed? The Global Financial Pyramid Scheme By The Numbers

Michael Snyder
Activist Post

Why is the global economy in so much trouble? How can so many people be so absolutely certain that the world financial system is going to crash? Well, the truth is that when you take a look at the cold, hard numbers it is not difficult to see why the global financial pyramid scheme is destined to fail. In the United States today, there is approximately 56 trillion dollars of total debt in our financial system, but there is only about 9 trillion dollars in our bank accounts.

So you could take every single penny out of the banks, multiply it by six, and you still would not have enough money to pay off all of our debts. Overall, there is about 190 trillion dollars of total debt on the planet. But global GDP is only about 70 trillion dollars. And the total notional value of all derivatives around the globe is somewhere between 600 trillion and 1500 trillion dollars. So we have a gigantic problem on our hands. 

The global financial system is a very shaky house of cards that has been constructed on a foundation of debt, leverage and incredibly risky derivatives. We are living in the greatest financial bubble in world history, and it isn't going to take much to topple the entire thing. And when it falls, it is going to be the largest financial disaster in the history of the planet.

The global financial system is more interconnected today than ever before, and a crisis at one major bank or in one area of the world can spread at lightning speed. As I wrote about yesterday, the entire European banking system is leveraged 26 to 1 at this point. A decline in asset values of just 4 percent would totally wipe out the equity of many of those banks, and once a financial panic begins we could potentially see major financial institutions start to go down like dominoes.

We got a small taste of what that is like back in 2008, and it is inevitable that it will happen again.

Anyone that would tell you that the current global financial system is sustainable does not know what they are talking about. Just look at the numbers that I have posted below.

The following is the global financial pyramid scheme by the numbers...

-$9,283,000,000,000 - The total amount of all bank deposits in the United States. The FDIC has just 25 billion dollars in the deposit insurance fund that is supposed to "guarantee" those deposits. In other words, the ratio of total bank deposits to insurance fund money is more than 371 to 1.

-$10,012,800,000,000 - The total amount of mortgage debt in the United States. As you can see, you could take every penny out of every bank account in America and it still would not cover it.

-$10,409,500,000,000 - The M2 money supply in the United States. This is probably the most commonly used measure of the total amount of money in the U.S. economy.

-$15,094,000,000,000 - U.S. GDP. It is a measure of all economic activity in the United States for a single year.

-$16,749,269,587,407.53 - The size of the U.S. national debt. It has grown by more than 10 trillion dollars over the past ten years.

-$32,000,000,000,000 - The total amount of money that the global elite have stashed in offshore banks (that we know about).

-$50,230,844,000,000 - The total amount of government debt in the world.

-$56,280,790,000,000 - The total amount of debt (government, corporate, consumer, etc.) in the U.S. financial system.

-$61,000,000,000,000 - The combined total assets of the 50 largest banks in the world.

-$70,000,000,000,000 - The approximate size of total world GDP.

-$190,000,000,000,000 - The approximate size of the total amount of debt in the entire world. It has nearly doubled in size over the past decade.

-$212,525,587,000,000 - According to the U.S. government, this is the notional value of the derivatives that are being held by the top 25 banks in the United States. But those banks only have total assets of about 8.9 trillion dollars combined. In other words, the exposure of our largest banks to derivatives outweighs their total assets by a ratio of about 24 to 1.

-$600,000,000,000,000 to $1,500,000,000,000,000 - The estimates of the total notional value of all global derivatives generally fall within this range. At the high end of the range, the ratio of derivatives to global GDP is more than 21 to 1.

Are you starting to get the picture?

Every single day, the total amount of debt will continue to grow faster than the total amount of money until the day that this bubble bursts.

What we witnessed back in 2008 was just a little "hiccup" in the system. It caused the worst economic downturn since the Great Depression, but global financial authorities were able to get things stabilized.

Next time it won't be so easy.

The next wave of the economic collapse is quickly approaching. A full-blown economic depression has already started in southern Europe. Unemployment is at record highs and economic activity is contracting rapidly.

The major offshore banking centers in Cyprus are on the verge of collapsing. It was just announced that they will now be closed until Tuesday, but nobody really knows for sure when they will be allowed to reopen. And there is already talk that when they do reopen that there will be strict limits on how much money people can take out.

And now the IMF is warning that the three biggest banks in Slovenia are failing and that a billion euros will be needed to bail them out.

The dominoes are starting to tumble, and the United States won't be immune. In fact, the greatest financial problems that the United States has ever seen are on the horizon.

But you can just have faith that Ben Bernanke, Barack Obama and the U.S. Congress know exactly what they are doing and will be able to save us from the coming financial collapse if you want.

The mainstream media will provide you with all of the positive economic news that you could possibly want. They are giddy about the fact that the Dow keeps hitting all-time highs and they would have us all believe that we are in the midst of a robust economic recovery. You can listen to them if you want to.

But when you are tempted to believe that everything is going to be "okay" somehow, just go back and look at the numbers there were posted above one more time.

There is no way that the global financial pyramid scheme is going to be able to hold up for too much longer. At some point it is going to totally collapse. When that happens, will you be ready?
This article first appeared here at the Economic Collapse Blog.  Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.


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Anonymous said...

Excellent article, I've been trying to explain how simplistically we are all being screwed to my family members for years but most of them just can't seem to grasp it.

The system is just too well designed for crushing intelligence and nonconformity through intimidation and vulgarities to prevent truth from reaching the public light of the masses.

Although this example comes from an article/speech at one of the Iranian conferences and is in regards to "Holocaust Revisionism" the reactions spoken of are the same with any major topic that opposes the establishment views today:

Note: the irony of such conferences only being allowed to take place in Iran while most of the "free world" criminalizes such matters of free speech is quite funny(I'm not even sure AP will post this).

"This was a milestone for revisionism. The first time a real Holocaust revisionist text was printed in a university publication, and the first time that professional scholars had the opportunity to demonstrate in public where at least one revisionist argument was wrong and why it was wrong.

Professor Hayes, however, did not address any assertion of fact in our ad.

Not one.

Professor Hayes ignored the published text and—listen to this—in one modest column in a student newspaper, charged me with “manipulation,” “deception,” “distortion,” “ignorance,” “intimidation,” “nastiness,” “dishonesty,” “duplicity,” “maliciousness,” “tastelessness,” the “browbeating” [of] academics like himself, “conspiracy mongering,” “implausibilities” and “disinformation.”

When I read the reply to our text by this professional scholar and lecturer on Holocaust Studies at a major university, I understood for the first time that in America it was the professorial class itself that had developed the concept of using an irrational vocabulary in a deliberate decision to “not” communicate with students or colleagues about revisionist arguments, no matter how simply they are put. Rather, they used a vocabulary of assault and insult to rupture any possible opportunity for authentic communication."

Authentic communication has been stifled in regards to the role of international banking as well by the same academic/professorial class in the U.S/western world using many of the same tactics.

Nobody wants to be the subject of a public flogging such as that so it works to intimidate most people into keeping their mouths shut and not 'rocking the boat'.

It's ironic that conformity was developed as a survival instinct originally but today it is leading millions, if not billions of people to their own demise or at least enslavement.

That which was designed to protect us now is a threat to us, but most can't overcome it so the crude tactics used by the PTB's work quite well to force people to conform whether they realize they are doing it or not.

Combined with a debt that can never be repaid and an "entertainment" industry devoted to diverting attention from important matters and you've got the 'perfect storm' of human enslavement.

As disgusting as it is I must admit it is a very effective system, but like all systems it can't completely cancel out or compensate for human irrationality and unpredictability and as such is still vulnerable to defeat.

This system can only perpetuate itself as long as the people believe they have a legitimate authority, otherwise nobody would care about paying down the debts and just tell the bankers to %$#% off.

Like Iceland has basically done, though I'm sure revenge is still in the works so that story isn't finished yet.


Anonymous said...

Your article continues to outline the imminent collapse of the global financial system thus our need to be cognizant and
vigilant/ However no one tells us what we can do to protect our savings. Should we put what money we have left under our
mattresses, bury it in the backyard, hoard food stuffs and other
bargaining items, buy gold and silver coins, move to the Andes or
WHAT. Are you afraid of naming the banks one should immediately divess themselves of? Anthing short of specifics is fear mongoning.

djohnston said...


Thanks for posting that link:

An interesting read on the pursuit of truth.

Anglo Saxon said...

@ Anonymous, March 20, 2013 at 8:17 PM

Yes, you should literally put most of your remaining cash "under the mattress" (or some equivalent place) in order to avoid leaving it in a bank. Leaving the bulk of your cash reserves with a bank exposes your reserves to sudden confiscation, or taxation (which in reality is the same thing).

You should already be working towards self-reliance. Try to grow more than 30 percent of your weekly food needs.

Cancel all your recurring subscriptions to mainstream media sources, such as cable tv, and the like. You don't have the time (even less the need) to watch the kind of mindless sh*t these channels keep pumping out to keep the masses distracted.

Hoard whatever dried foodstuffs that you can. Dried beans is a good food category to begin with, alongside nuts and dried fruits. Advise your wife/girlfriend it would be wise for her to learn how to make homemade jam and marmalade.

Obtain as many silver coins as you can afford. A few gold ingots (smallest size you can get hold of) would also be wise. Not totally essential, but you do need to try and park some of your financial assets outside "their" totally and utterly corrupt financial system; what with all their fiat printed paper, waste, and hot-air.

It is no longer necessary to name specific banks. That would have been important back in 2007 or 2008, but now such information is superfluous. All western banks are now bankrupt (including those in Japan). Even those with long histories and august names: they are totally bankrupt. The fractional reserve hoax that they have long practised ensures this fate anyway. In addition to which all western banks have fully exposed themselves to the Derivative Casino of the past 10 years, and consequently, they technically now owe 10, or 50, or 1000 times more than they possess in hard assets.

I no longer believe it is hyperbole to assert that many of the top bankers really do need to be arrested and charged with crimes against nation states, humanity, or the entire world. Death sentences should be attached to their charge sheets, with the Prosecution pursuing the death sentence with the greatest legal vigour in each and every case.

We have to put a final and total end to this. Furthermore, we must create a new political model that can replace the theatrical hoax immature fools engage with whenever they use their single vote. New political models will have to revert to more substantial themes instead of the abstract ones that serve to mask the gradual move to International Socialism (Communism) ongoing since 1945 and sponsored by the globalist trash residing in London, Joo York City, and Washington DC.

Act locally, before thinking globally. Own your space!

Anonymous said...

Step 1. Pull all your money from paper assets.

Step 2. Leave only enough money in Checking to cover your monthly bills.

Step 3. Buy Silver or Gold or both!

Step 4. Build up a 6 month supply of Food & Meds, to get your through the coming storm.

Step 5. Own a gun!

Anonymous said...

Sorry I won't be buying a gun,only in the US eh!

Anonymous said...

Get out of ALL paper assets, including your 401k.

Buy "Physical" gold & silver!

Start prepping, buy 3 to 6 months of food, water, medical supplies.

Protect your family, buy a gun & plenty of ammo.

Anonymous said...

Rigged to fail

Anonymous said...

I sincerely believe that it is a certain element that is controlling the financial base of the economic system. I do not care what race, color, creed or national origin it is. Whoever it is, stop playing the race card. If the shoe fits where it!

You are from your father the devil, and you desire to do the works of your father. That one was a manslayer when he began, and he did not stand fast in the truth, because truth is not in him. When he speaks the lie, he speaks according to his own disposition, because he is a liar and the father of the lie. Mathew 8: 44.

The International Banking CABAL of the NWO that are members of the Illuminati are part of satan's organization and are the personification of evil and are the devils advocate.

Repurchase of house. The poor. No usury
And in case your brother grows poor and so he is financially weak along side you, you must also sustain him. As an alien resident and a settler, he must keep alive with you. Do not take interest and usury from him, but you must be in fear of your God, and your brother must keep alive with you. you must not give him your money on interest and you must not give your food out on usury. Levitcus 25: 35, 36, 37

And you must cause the horn of loud tone to sound in the seventh month on the tenth of the month on the day of atonement you people should cause the horn to sound in all your land. And you must sanctify the fiftieth year and proclaim liberty in the land to all the inhabitants. It will become a Jubilee for you, and you must return each one to his possession and you return each one to his family. Leviticus 25: 35, 36, 37

I told a professor of economics at the University of Nevada that the international bankers did not believe in God. His answer was that they believe in money. The Internattional Banker's Federal Reserve Note should read that they trust in money instead of God.

brad said...

You know what? When the banks crash, fukkem.

Let them eat their coins and paper money. Join w/your neighbors, and when the wealthy people's goons come to take your food and whatever they want, break, shoot, burn, do whatever you need to do to defend your water/food supply.

If you need to, find the DHS goon's families and hold them hostage. Get your local corporation psychopaths into YOUR version of jail. Set up your own society.

If the wealthy people have decided to attack the less wealthy classes, then they have invalidated our social contract, and all bets are off. IF we choose to even let them play anymore, they will have to follow OUR rules.

Anonymous said...

Not enough Hamster wheels , too many Hamsters ...

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