Mish: "Global Financial System is Bankrupt"

Mish is now reporting that he believes the global financial system is bankrupt.  I won't bother going back through all my posts to point out the many times I have stated this.  All of the major banks of the world are in the same boat.  Want to know how I can be sure of this without even looking at the numbers (even though in truth I have done that)?  It's beyond simple.  All you have to do is to accept that the whole fractional reserve banking system is a scam and it all becomes crystal clear.

The scam part of fractional reserve banking is that some special people get to create credit from thin air and then lend it out for real interest that has to be paid for with real work.  The bankers essentially start with nothing and they end up with something without having done any work to earn it.  Getting rich without doing any work is economically impossible in a true economy.  Such things only happen for gamblers and thieves.

Once you understand that this is the case then you also understand that the only way to become a big bank under these rules is to take on massive leverage.  It's a case where the bigger you are the more leveraged crap you had to be into in order to get there.  In other words, bank size is an excellent indicator of the level of fraud and leveraged corruption going on within it.  Let me put it another way.  How did Al Capone become an important gangster?  By doing petty crime?  Of course not!  The way to get big in crime is to go big.  The fractional reserve banking scam is a form of fraud and if analyzed by people with any economic sense they would realize that it is nothing but crime which has been legalized by corrupt politicians.  And they did it right under our noses because we failed to listen to the few honest people telling us the truth for decades like Ron Paul.  It's our fault; the people of the world are to blame.  We were getting our share of the goodies and so we said and did nothing.  We didn't care who got elected and didn't lift a finger to drive honesty back into our leaders.  We were lazy, preoccupied and ignorant.  Now it's done and the payment for our sheepledom is coming due.  Nothing and nobody can change that.

Still not convinced?  Let me remind you yet again of what Citigroup's ex-CEO Chuck Prince said: "When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you've got to get up and dance. We're still dancing."  Mr. Prince did not say "if the music stops" but rather "when the music stops".  "Liquidity" is con-man speak for leveraged debt.  Chuck knew it was a scam the whole time but he also knew that if Citigroup didn't get in there and steal as much as it could that the other thieving US pig-banks would just have more for themselves.  And if the US banks didn't do it then the foreign banks would have.  You don't put thieves in front of a big pile of money and then tell them to behave responsibly.  You have to be a moron to think that they won't do everything in their power to take the money.  Well, fractional reserve banking is NO DIFFERENT.   As long as the credit scam is running, having the legal authority to issue loans without any relationship to having reserves to back such loans with is as close to a free money machine as you can get.

Yes folks, the global banking system is insolvent.  When the big scammers topple over it will "contageon" to the smaller players which have been more conservative.  They will topple over and be crushed under the weight of the bigger pigs.  You know what that means?  It means that the global fiat currency system is worthless or nearly so.  All that remains is the realization of the facts by the people.  Straight talk is hard to come by these days.  Consider this straight talk from me a gift to you.  The right move is to get out of the global fiat currency system not in a fit of panic (like most people will be trying to do when the bottom finally falls out) but in incremental moves and over a period of time.  Don’t overthink it.  Just start moving into gold in a measured fashion.  At some point even $5000/oz. will appear cheap. That could take years to happen but it won’t matter if you bought at $1700/oz. or $1300/oz. in a big pullback.  What will eventually matter is that, in the words of Marc Faber, you become your own central banker because the ones running the global banks are all crooks and gamblers.