The debt bomb just got bigger

By Max Keiser, the Keiser Report -

The amount of debt world­wide is more than all of the bank accounts in the world, and the cur­rent finan­cial sit­u­a­tion in Cyprus is the inevitable next phase: Confiscation.

All pre­tense is now gone that cen­tral or global bankers can ‘secu­ri­tize’ growth by pack­ag­ing and repack­ag­ing debt; by hypoth­icat­ing and rehy­poth­icat­ing debt; by reg­u­lat­ing and rergu­lat­ing debt. Since the bond mar­ket rally began in the early 1980s (yes, it’s that old) each cri­sis has been met by cen­tral and global bankers – the IMF, EU and ECB, to name a few – and their Wall St. and City of Lon­don brethren with an increase in debt, and an exten­sion of the debt’s maturity.

The result has been – as of 2007 – the biggest moun­tain of on-balance sheet and off-balance sheet debt in his­tory: A stag­ger­ing $220 tril­lion in debt in America’s $14-trillion econ­omy alone (when you include all pub­lic, pri­vate and con­tin­gent lia­bil­i­ties of unfunded enti­tle­ment pro­grams). Deals in the global debt deriv­a­tives mar­ket now stand in excess of $1 quadrillion, rid­ing above a global GDP of approx­i­mately $60 trillion.

But start­ing in 2007, and then becom­ing spec­tac­u­larly appar­ent in 2008 with the Lehman col­lapse, the abil­ity of the world’s tax­pay­ers to pay either the inter­est or prin­ci­pal on this debt has hit a brick wall. And for sev­eral years now, gov­ern­ments around the world have tried the same old tricks of ‘extend and pre­tend.’ Repack­age and extend the matu­rity, and pray that tax receipts start pick­ing up enough to pay some of the debt off. It didn’t work. The debt bomb just got big­ger. Now in Cyprus we see the inevitable next phase: Confiscation.

To pay off the debts that were incurred to finance the biggest wealth grab in his­tory, we see in Cyprus, as well as cen­tral and global bank­ing insti­tu­tions around the world, a trend to just reach in and grab people’s money from their ‘insured’ bank accounts. We should have fig­ured out this was com­ing when JP Mor­gan (read: Jamie Dimon) reached in and ille­gally stepped ahead of cus­tomers at MF Global and grabbed over $1 bil­lion, with the help of his crony pal Jon Corzine.

Have we learned our les­son yet? They have more debts to pay than there is money in all the bank accounts in the world. This means that chances are, you – who­ever you are, and what­ever coun­try you live in – will have a siz­able per­cent of your sav­ings stolen by banksters.

Since the cri­sis hit (and for sev­eral years lead­ing up to it) we’ve been rec­om­mend­ing on ‘Keiser Report’ to put as much money as you can in gold and sil­ver. Our advice then and now is: The only money you should keep in a bank is money you’re will­ing to lose.

Posted by Randa Wagner on Mar 19 2013. You can follow any responses to this entry through the RSS Feed. Both comments and pings are currently closed.