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Article posted Mar 11 2014, 4:11 AM Category: Economy Source: The Economic Collapse Print

We Are In FAR Worse Shape Than We Were Just Prior To The Last Great Financial Crisis

By Michael Snyder

None of the problems that caused the last financial crisis have been fixed.† In fact, they have all gotten worse.† The total amount of debt in the world has grown by more than 40 percent since 2007, the too big to fail banks have gotten 37 percent larger, and the colossal derivatives bubble has spiraled so far out of control that the only thing left to do is to watch the spectacular crash landing that is inevitably coming.† Unfortunately, most people do not know the information that I am about to share with you in this article.† Most people just assume that the politicians and the central banks have fixed the issues that caused the last great financial crisis.† But the truth is that we are in far worse shape than we were back then.† When this financial bubble finally bursts, the devastation that we will witness is likely to be absolutely catastrophic.

Too Much Debt

One of the biggest financial problems that the world is facing is that there is simply way too much debt.† Never before in world history has there ever been a debt binge anything like this.

You would have thought that we would have learned our lesson from 2008 and would have started to reduce debt levels.

Instead, we pushed the accelerator to the floor.

It is hard to believe that this could possibly be true, but according to the Bank for International Settlements the total amount of debt in the world has increased by more than 40 percent since 2007...

The amount of debt globally has soared more than 40 percent to $100 trillion since the first signs of the financial crisis as governments borrowed to pull their economies out of recession and companies took advantage of record low interest rates, according to the Bank for International Settlements.

The $30 trillion increase from $70 trillion between mid-2007 and mid-2013 compares with a $3.86 trillion decline in the value of equities to $53.8 trillion in the same period, according to data compiled by Bloomberg. The jump in debt as measured by the Basel, Switzerland-based BIS in its quarterly review is almost twice the U.S.'s gross domestic product.

That is a recipe for utter disaster, and yet we can't seem to help ourselves.

And of course the U.S. government is the largest offender.

Back in September 2008, the U.S. national debt was sitting at a total of 10.02 trillion dollars.

As I write this, it is now sitting at a total of†17.49 trillion dollars.

Is there anyone out there that can possibly conceive of a way that this ends other than badly?

Too Big To Fail Is Now Bigger Than Ever

During the last great financial crisis we were also told that one of our biggest problems was the fact that we had banks that were "too big to fail".

Well, guess what?

Those banks are now much larger than they were back then.† In fact, the six largest banks in the United States (JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley) have collectively gotten 37 percent larger since the last financial crisis.

Meanwhile, 1,400 smaller banks have gone out of business during that time frame, and only one new bank has been started in the United States in the last three years.

So the problem of "too big to fail" is now much worse than it was back in 2008.

The following are some more statistics about our "too big to fail" problem that come from a previous article...

-The U.S. banking system has 14.4 trillion dollars in total assets.† The six largest banks now account for 67 percent of those assets and all of the other banks account for only 33 percent of those assets.

-Approximately 1,400 smaller banks have disappeared over the past five years.

-JPMorgan Chase is roughly the size of the entire British economy.

-The four largest banks have more than a million employees combined.

-The five largest banks account for 42 percent of all loans in the United States.

-Bank of America accounts for about a third of all business loans all by itself.

-Wells Fargo accounts for about one quarter of all mortgage loans all by itself.

-About 12 percent of all cash in the United States is held in the vaults of JPMorgan Chase.

The Derivatives Bubble

Most people simply do not understand that over the past couple of decades Wall Street has been transformed into the largest and wildest casino on the entire planet.

Nobody knows for sure how large the global derivatives bubble is at this point, because derivatives trading is lightly regulated compared to other types of trading.† But everyone agrees that it is absolutely massive.† Estimates range from $600 trillion to $1.5 quadrillion.

And what we do know is that four of the too big to fail banks each have total exposure to derivatives that is in excess of $40 trillion.

The numbers posted below may look similar to numbers that I have included in articles in the past, but for this article I have updated them with the very latest numbers from the U.S. government.† Since the last time that I wrote about this, these numbers have gotten even worse...

JPMorgan Chase

Total Assets: $1,989,875,000,000 (nearly 2 trillion dollars)

Total Exposure To Derivatives: $71,810,058,000,000 (more than 71 trillion dollars)

Citibank

Total Assets: $1,344,751,000,000 (a bit more than 1.3 trillion dollars)

Total Exposure To Derivatives: $62,963,116,000,000 (more than 62 trillion dollars)

Bank Of America

Total Assets: $1,438,859,000,000 (a bit more than 1.4 trillion dollars)

Total Exposure To Derivatives: $41,386,713,000,000 (more than 41 trillion dollars)

Goldman Sachs

Total Assets: $111,117,000,000 (just a shade over 111 billion dollars -- yes, you read that correctly)

Total Exposure To Derivatives: $47,467,154,000,000 (more than 47 trillion dollars)

During the coming derivatives crisis, several of those banks could fail simultaneously.

If that happened, it would be an understatement to say that we would be facing an "economic collapse".

Credit would totally freeze up, nobody would be able to get loans, and economic activity would grind to a standstill.

It is absolutely inexcusable how reckless these big banks have been.

Just look at those numbers for Goldman Sachs again.

Goldman Sachs has total assets worth approximately 111 billion dollars (billion with a little "b"), but they have more than 47 trillion dollars of total exposure to derivatives.

That means that the total exposure that Goldman Sachs has to derivatives contracts is more than 427 times greater than their total assets.

I don't know why more people aren't writing about this.

This is utter insanity.

During the next great financial crisis, it is very likely that the rest of the planet is going to lose faith in the current global financial system that is based on the U.S. dollar and on U.S. debt.

When that day arrives, and the U.S. dollar loses reserve currency status, the shift in our standard of living is going to be dramatic.† Just consider what Marin Katusa of Casey Research†had to say the other day...

It will be shocking for the average American... if the petro dollar dies and the U.S. loses its reserve currency status in the world there will be no middle class.

The middle class and the low class... wow... what a game changer. Your cost of living will quadruple.

The debt-fueled prosperity that we are enjoying now will not last forever.† A day of reckoning is fast approaching, and most Americans will not be able to handle the very difficult adjustments that they will be forced to make.† Here is some more from Marin Katusa...

Imagine this... take a country like Croatia... the average worker with a university degree makes about 1200 Euros a month. He spends a third of that, after tax, on keeping his house warm and filling up his gas tank to get to work and get back from work.

In North America, we don't make $1200 a month, and we don't spend a third of our paycheck on keeping our house warm and driving to work... so, the cost of living... food will triple... heat, electricity, everything subsidized by the government will triple overnight... and it will only get worse even if you can get the services.

All of this could have been prevented if we had done things the right way.

Unfortunately, we didn't learn any of the lessons that we should have learned from the last financial crisis, and our politicians and the central banks have just continued to do the same things that they have always done.

So now we all get to pay the price.





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Comments 1 - 16 of 16 Add Comment Page 1 of 1
Anonymous

Posted: Mar 14 2014, 3:11 PM

Link
98174 The federal reserve, does not work for the best interest of America, its efforts are all targeted for the reserve currency status.
Why is it that your saving account interest is so low. The Federal reserve
does not want americans , to work hard save their money and put 30%
down on a house, also the federal reserve wants U.S. citizens to buy
Chinese crap like there is no tomorrow. Globalist bankers, by globalist.
The greed never stops. In the 1970s 25% of all jobs in the U.S.A where
in Manufacturing, now were looking at between 9 and 12%, at the rate
united States is going in next 30 years, it will go down to 4%. Nixon got the
U.S. off the gold standard and good old Henry opened up china, promoting one child in china. The U.S.A. needs a strategic metal reserve,
patterned after our oil reserve, ingots of copper, aluminum, iron, steel,
will be stored at military bases across the United states. The end users
will be U.S. military or for U.S. manufactures. The fiscally irresponsible
elected politicians, will not have access to it. The ingots , will sold on the
open market, buyers will pay for the strategic metals in gold. the gold will
be stored at fort knox and will not be used by the federal reserve.
The amount of strategic metal that U.S.A will set a side will equal 5%
of the GNP. To accomplish this , the United States will put export
restrictions on the export of scrap metals that leave the United States.
The U.S. treasury will purchase the ingots at there discretion. The strategic
metal reserve, will strengthen the U.S. dollar and treasury will do what is
in the best interest of the United states citizens and invest in our future.
Anonymous

Posted: Mar 15 2014, 8:49 PM

Link
208123 property taxes -1st plank
income taxes -2nd plank
inheritance taxes-3rd plank
FCC -4th plank
fed res -5th plank
drivers lic -6th plank
-7th plank
www.criminalgovernment.com
Anonymous

Posted: Mar 19 2014, 10:44 AM

Link
98174 1) Have you ever been a member of the council foreign relations.
2) Have you ever been a member of the Trilateral commission.
3) Have you ever attended the Bilderburger conference.
4) have you ever attended a bohemian grove meeting.

If you answer yes, to any of these four questions, that disqualify
you to hold any elected representative office in United States.
Anonymous

Posted: Mar 20 2014, 2:34 PM

Link
98174 In the 1950s we had the Bricker Amendment and reese commission,
May be its about time to set up a commission to investigate lobbyist
organizations, to find about there foreign entanglements and money
trail, so that the NSA and FBI can use Echelon and carnivore, to track,
trace, time stamp, profile, investigate, store, arrest.
Anonymous

Posted: Mar 21 2014, 12:34 PM

Link
98174 The minders are wearing Blinders and are deaf, they do not enforce
the Logan Act or go after political corruption in the United States.
Anonymous

Posted: Mar 21 2014, 1:48 PM

Link
72208 THE AMERICAN DREAM:

"Forget the politicians. The politicians are put there to give you the idea that you have freedom of choice . . . you donít. You have no choice. You have owners. They own you. They own everything. They own all the important land. They own, and control the corporations. Theyíve long since bought, and paid for the Senate, the Congress, the state houses, the city halls, they got the judges in their back pockets and they own all the big media companies, so they control just about all of the news and information you get to hear. They got you by the balls. They spend billions of dollars every year lobbying . . . lobbying, to get what they want . . . Well, we know what they want. They want more for themselves and less for everybody else, but Iíll tell you what they donít want . . . they donít want a population of citizens capable of critical thinking. They donít want well informed, well educated people capable of critical thinking. Theyíre not interested in that . . . that doesnít help them. Thatís against their interests. Thatís right. They donít want people who are smart enough to sit around a kitchen table and think about how badly theyíre getting fucked by a system that threw them overboard 30 fuckin' years ago. They donít want that. You know what they want? They want obedient workers . . . Obedient workers, people who are just smart enough to run the machines and do the paperwork. And just dumb enough to passively accept all these increasingly shittier jobs with the lower pay, the longer hours, the reduced benefits, the end of overtime and vanishing pension that disappears the minute you go to collect it, and now theyíre coming for your Social Security money. They want your fuckin' retirement money. They want it back so they can give it to their criminal friends on Wall Street, and you know something? Theyíll get it . . . theyíll get it all from you sooner or later cause they own this fuckin' place. Itís a big club and you ain't in it. You and I are not in The big club. By the way, itís the same big club they use to beat you over the head with all day long when they tell you what to believe. All day long beating you over the head with their media telling you what to believe, what to think and what to buy. The table has tilted folks. The game is rigged and nobody seems to notice. Nobody seems to care. Good honest hard-working people . . . white collar, blue collar it doesnít matter what color shirt you have on. Good honest hard-working people continue, these are people of modest means . . . continue to elect these rich cocksuckers who donít give a fuck about you. They donít give a fuck about you . . . they donít give a fuck about you. They donít care about you at all . . . at all . . . at all, and nobody seems to notice. Nobody seems to care. Thatís what the owners count on. The fact that Americans will probably remain willfully ignorant of the big red, white and blue dick thatís being jammed up their assholes everyday, because the owners of this country know the truth. Itís called the American Dream cause you have to be asleep to believe it . . .Ē

George Carlin
Anonymous

Posted: Mar 22 2014, 12:15 AM

Link
72208 Welcome to the Big Darkness
By Hunter S. Thompson
The American nation is in the worst condition I can remember in my lifetime, and our prospects for the immediate future are even worse. I am surprised and embarrassed to be a part of the first American generation to leave the country in far worse shape than it was when we first came into it. Our highway system is crumbling, our police are dishonest, our children are poor, our vaunted Social Security, once the envy of the world, has been looted and neglected and destroyed by the same gang of ignorant greed-crazed bastards who brought us Vietnam, Afghanistan, the disastrous Gaza Strip and ignominious defeat all over the world.
The Stock Market will never come back, our Armies will never again be No. 1, and our children will drink filthy water for the rest of our lives.
The Bush family must be very proud of themselves today, but I am not. Big Darkness, soon come. Take my word for it.

Big Darkness" (22 July 2003)
Anonymous

Posted: Mar 22 2014, 11:03 AM

Link
98174 The Globalist Bankers wanted Libya's Muammar Gaddafi dead
because he wanted to set up a Middle Eastern Currency, backed by
gold.

Want Change, study Serbia's Canvas Core Curriculum, study The
Rand Corporation Delphi Techniques of consensus building .

Study Hegel's Dialectic, Hobbes, Adam Smith,Friedrich Von Hayek and
Archie Bunker.
Anonymous

Posted: Mar 23 2014, 2:26 PM

Link
98174 Lets talk about the strategic metal lead, lead ,lead, there are elected
officials who want to nullify the 2 amendment, and take away American's
right to bear arms and elected officials want the U.S.A to be like a
European Union socialistic welfare state, so what is the U.S.A. its doing,
the next best thing , the jack boot alphabetic soup agency's are scarfing
up ammunition and hoarding it, so it make's it difficult for patriotic
american''s to acquire it.
So what is the solution?
1) Junk yard owner of America will start stock piling lead acid battery's
for a period of 2 years.
2) auto parts store will dispose there lead acid to local junk yards.

3) ammunition manufacture say enough is enough, quit being whores.
Anonymous

Posted: Mar 24 2014, 12:11 PM

Link
98174 Where do American lead acid battery's go to be reclaimed/ recycled?

They are exported to Mexico, and the lead is sold to Communist Russia,
Cummunist china, Cummunist North Korea, and what ever is left over,
the united states gets.

The lead is redistributed using the same techniques that the Fabian
socialist used, or wise known as incremental change, the steps are so
gradual, that nobody see's the big picture until it's too late.
Anonymous

Posted: Mar 26 2014, 1:45 PM

Link
98174 Why are you recycling, filling up your green tote, your efforts are,
supporting India and communist china, may be it about time americans
demanding a two tote System, one for general recycling, The other has a
label that say's FOR DOMESTIC CONSUMPTION ONLY, NOT
FOR EXPORT, let Americans make the choice, otherwise your voluntary
efforts are not supporting United States of America.
Anonymous

Posted: Mar 28 2014, 2:53 PM

Link
98174 one pallet of aluminum can's, equals 2 internal combustion aluminium
auto engines.

Ten pallets equals 1 fighter aircraft aluminum airframe, 40 pallets equals
one commercial airline aircraft airframe.
Anonymous

Posted: Apr 23 2014, 11:36 AM

Link
98174 its about time the united states government , put restrictions on the
export of scrap aluminum, at following rate

1st year 3 percent
2nd year 6 percent
3rd year 12 percent
4 th year 24 percent

By doing so, it would make aviation and automotive manufactures, more
competitive with a abundant supply.

How can free market capitalistic business, compete with nationalistic
communist business, that have been grabbing up land around the world,
with 50 year leases .
Anonymous

Posted: Apr 26 2014, 11:17 AM

Link
98174 what is the primary mission of the united states commercial airline
manufactures, it should be to put airbus out business, why should
they redistribute market share to an European union consortium of
England and france, may be they should find out what free market
capitalism is.

WHAT DO SOCIALIST, MARXIST, MAOIST A LIKE HAVE IN
COMMON, THEY LOOK AT THE INEFFICECYS OF CAPITALISM,
WHEN THERE IS MANY COMPANYS MAUFACTUREING THE SAME PRODUCT, SOME PRODUCTS ARE BETTER THAN OTHERS, THEY
SEE COMPETION AS WASTE OF NATURAL RESOURCES.


Anonymous

Posted: Apr 29 2014, 3:13 PM

Link
98174 5th year 48 percent
6th year 96 percent

Why is aluminum so important ???

With the advent of electric automobiles , the body of the car made of
aluminum , will bring down the horse power to weight ratio, also the
miles per amp hours ratio goes up.

Iron is a BTU hungry metal, compared to aluminum, which has a lower
melting point, and energy consumption is less..

company's like tesla motors, should be given special tax exempt
status. to encourage more company's to manufacture electric cars.
Electric automotive will last longer than internal combustion counter
parts, changing an electric motor is not as labor intensive as
an internal combustion engine. With the tax incentive, company
like telsa, can donate cars across the united states to high schools
shop classes.


Anonymous

Posted: May 17 2014, 12:07 PM

Link
98174 Let the trade war begin.
Comments 1 - 16 of 16 Page 1 of 1


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