By buying bonds from governments and providing cheap credit to banks around
Europe in a bid to stem the debt and bank crisis, the Eurosystem which underpins
the ECB has become hugely leveraged. With only €81.187 billion in subscribed capital
and reserves, compared to €1.895 trillion in assets, the ECB is now
leveraged 23.4 times.10 In contrast, strong central banks such as the
Swedish Riksbank, the Norwegian Central Bank and the Swiss National Bank,
are leveraged only 4.7, 5.9 and 6.3 times respectively. Meanwhile, the
average hedge fund is leveraged around four or five times.
Table 1: Spot the difference between the ECB and other central banks
(€m)
Capital
Reserves
Assets
Leverage
C+R as %ratio of Assets
ECB
10,761
70,426
1,895,870
23.4: 1
4.25
Swiss NB
36,174
-
226,641
6.25:1
15.96
Sweden
110
7,235
34,757
4.73:1
21.1
Norges Bank
8,441
-
49,345
5.85:1
17.1
Source: ECB weekly financial statement 24 May 2011, SNB Balance sheet, Swedish Riksbank weekly financial statement and
Norges Bank Balance sheet April 2011
The internet has made the earth flat and created worldwide labor rates rushing toward the bottom. Today labor is worth $5/day w no benefits. Tomorrow $4/day. Developed countries EU/USA with massive social programs are going down. Then developing countries with following as EU/USA consumption drops. It was all created by the internet.
Let's have a look at the REAL situation in the financial system.
Greece is bankrupt. It has been for years. The market has finally
stopped being moronic and figure out the obvious (so much for the "efficient" hypothesis).
Greece WILL default. This WILL crush German and French banks.
The EU in its current form (as well as the Euro) are DONE.
The US banking system is similarly fragile and on the verge of collapse.
The US economy is in a DE-pression and rolling over in a big way AGAIN.
All the economic data is being massaged to look better than it is. Look around you,
does the economy look OK to you?
The US Government is broke. Obama’s jobs plans is absurd. Where’s the money going to come from?
Bank of America (as well as the other TBTFs) is insolvent.
The only reason they’re still in business is rampant fraud, lies, and theft. What's
happening in Greece is coming to them soon.
The Federal Reserve has lost control of the markets. QE 5, IF it comes, will accomplish nothing.
Bernanke will be stepping down within 18 months and possibly facing legal battles.
Those are ALL FACTS. That’s the deal. The claims that all is well and that the market
will hold up are lies. The Fed gave TRILLIONS of Dollars from the public
to those who perpetuated the biggest theft and fraud in history. And they FIXED NOTHING in the process.
So here we are, the Fed is out of bullets entirely (Operation Twist 2 won’t do anything,
low rates haven’t helping the economy OR the mortgage markets… and QEn is not going
to happen without systemic collapse) and losing control of the markets by the day.
Look at Bernanke’s track record. He's been wrong about EVERYTHING for years.
Do you think he has ANY ideas or solutions to what’s happening NOW?
The guy doesn't even believe inflation is an issue.
He's either stupid or a liar. Neither of those are
indicative of someone who can fix things.
In plain terms, we’re heading into the END GAME for the markets.
What's coming will see debt defaults in Europe and the US,
a stock market Crash that makes 2008 look like a picnic, civil unrest and more.
The United States of America is now bankrupt. It does not matter which political party will be in power over the next decades, the over-hang of $100 Trillion in unfunded liabilities from the local to Federal level, plus a hollow banking system, means there is no way to tax ourselves enough, or even cut spending enough, to have any chance to grow our way out of our problems.
What this means is that the productive elements of society will at some point go on strike, whether by choice or because they are forced to pack up their bags and hide. From Ayn Rand's famous novel Atlas Shrugged, comes the phrase "Who Is John Galt". Galt is the character who epitomizes the productive entrepreneur so fed up with the restrictions of the bureaucrats and corporatists that he decides to start a revolt of society's creators. In our current financial dilemma, Rand's theme has lead to the suggestion that productive citizens may only be able to survive by "Going Galt" and dropping out.
But how does one survive if one drops out of society, even for a short period? That's what this book is about, how to survive the upcoming economic collapse everyone knows is coming. What this book is not is anti-government, or anti-tax, or an anarchist cookbook, those are armchair discussions for the idle class. What "Going Galt" is about is surviving No Matter What Happens.
