The most popular post for 2012 at zerohedge.com was with out a doubt a presentation by Raoul Paul of 'Global Maco Investor', It seems every one loves to read a horror story.
- We don’t know exactly what is to come, but we can all join the very few dots from where we are now, to the collapse of the first major bank…
- With very limited room for government bailouts, we can very easily join the next dots from the first bank closure to the collapse of the whole European banking system, and then to the bankruptcy of the governments themselves.
- There are almost no brakes in the system to stop this, and almost no one realises the seriousness of the situation.
- The problem is not Government debt per se. The real problem is that the $70 trillion in G10 debt is the collateral for $700 trillion in derivatives…
- Yes, that equates to 1200% of Global GDP and it rests on very, very weak foundations
- From an EU crisis, we only have to join one dot for a UK crisis of equal magnitude.
- And then do you think Japan and China would not be next?
- And then do you think the US would survive unscathed?
- That is the end of the fractional reserve banking system and of fiat money.
- It is the big RESET.
- Bonds will be stuck at 1% in the US, Germany, UK and Japan (for this phase).
- The whole bond market will be dead.
- Short selling on bonds - banned
- Short selling stocks – banned
- CDS – banned
- Short futures – banned
- Put options – banned
- We have around 6 months left of trading in Western markets to protect ourselves or make enough money to offset future losses.
- Spend your time looking at the risks of custody, safekeeping, counterparty etc. Assume that no one and nothing is safe.
- After that…we put on our tin helmets and hide until the new system emerges
- From a timing perspective, I think 2012 and 2013 will usher in the end.
The End Game
COMMENTS: First there are no lies in the report. The reader must respect that! Second, to understand the derivative market is to understand how a bookie runs his business, every winner has a looser, the bookie just takes a fee. For example, JP Morgan has $100 Trillion of derivatives over there books, they are one very large bookie, the question you must ask is when some one loses can they pay, what if they dont? A 1% (if only) failure to cover a loss is $1 trillion dollars. Who is going to cover that cash shortfall, JP Morgan cant that them wiped out, the Fed and or the US taxpayer. This is why asset prices cant go down, this is why there cant be a recession, this is why mark to market accounting will never ever come back...EVER! The economic cycle must be adjusted to never have a down cycle ever !
Learn to play the game, there is a reason why gold is above $1500 !