We are in a de Facto State of War with the Banks

We are about to witness the greatest financial shock the world has ever seen. It will make the initial shot across our bow in August 2007 and subsequent first blood in September 2008 look like child’s play. Anyone who knew what these events truly meant, and what fundamental systemic underpinnings drove them, could within some measurable degree of accuracy predict the outcome. Since the Sub Prime crisis morphed into the Financial Crisis we have literally been in a waiting game. We stood by, dumbfounded, stunned, disbelieving as we watched the first volley of victims fall. People with bad credit, people who’d extended themselves by leveraging their income with two and three year Sub Prime ARM’s were the proverbial lambs. But then people with not-so-bad credit started to fall behind. Then people who drove BMW’s, and Mercedes, and who took trips to exotic places, they too began to suffer the pain. The real estate market did not come back. Free money was no longer free.

We now sit on top a powder keg known as Alt-A mortgages, primarily made up of Option ARM and 5/1 ARM mortgages. It is a ticking time bomb. The banks know it. The Obama Administration knows it. The Fed knows it. Yet they can do nothing to extinguish the fuse. The bomb will go off. It’s timer is set for sometime before, during, or after 2011. The number of people who will quit making their mortgage payments or fall severely behind will number in the tens of millions. This is on top of the already staggering numbers that continue to grow every day. Unemployment, measured by people out of a job or their self-employed incomes seriously impeded, will breach thirty-five percent.

I don’t know to make this any more clear to my American brothers and sisters, but we are in a de facto state of war. The banks are consolidating power. They have taken control of the US Treasury by way of the Federal Reserve and they are holding a gun to our head loaded with our own future. I fear we are on a path to rioting in the streets. Though I pray that our revolution will happen in the voting booth.

In April of 2009 I wrote an article titled; How Five Banks Took Over the United States of America (also see Archives). Since that time we have suffered the continued erosion of our economy and witnessed the criminal public deception by our entire financial sector, the Federal Reserve, the US Treasury, and both our previous and newly elected President. To say that a war against the US citizenry is not underway is to not have a grasp on reality. From – How Five Banks Took Over the United States of America (April, 2009):

I recently read the Office of the Comptroller of the Currency report on Bank Trading and Derivatives Activities for Q4 2008 and shortly thereafter the Public-Private Investment Program Fact Sheet. What struck me when I read these reports were the following two points; first, the OCC Derivatives report has five commercial banks holding 96% of all notional derivatives outstanding – or $192 trillion dollars of a $200 trillion market. A market which if forced to take the ‘mark-to-market’ hit they are unwilling to take, would mean their end. As a result these five banks are essentially clogging the world’s credit markets. Second point, per the Geithner plan Treasury will designate only five asset fund managers to oversee the entirety of the PPIP Legacy Securities portion of the plan. Five banks clogging the system and five banks to be appointed as asset fund managers by Treasury. A coincidence? I doubt it. The graph to the left shows the concentration of derivatives by category and then by distribution between banks. The top five banks in declining order of importance are; JPMorgan Chase at $88 trillion in derivatives, Bank of America with $38 trillion, Citibank holding $32 trillion, Goldman Sachs with $30 trillion, and at number five the merged Wells Fargo -Wachovia Bank holding a combined $5 trillion. Number six is Britain’s HSBC Bank USA hold $3.7 trillion in derivatives.The spreadsheet below details the gross fair (dollar) value of outstanding derivatives as distributed between these top five banks (and then others). Remember, if the derivative market collapses, so does the world. Chaos, riots, anarchy, pretty much the worst imaginable scenario – or so they say.

Jesse at Jesse’s Crossroads Cafe has done an updated piece on the current state of the derivatives bomb – excerpt below:

Well, the boom is over, so what about now?

The current notional value of derivatives on US commercial banks’ balance sheets is $203 trillion. 97% of these ($196 trillion) sit on FIVE banks’ balance sheets, according to a recent report from that very same Office of the Comptroller of the Currency.

It is obvious from this report that Goldman Sachs is by no means a bank, and deserves no consideration as such. It is a hedge fund. In general, Wall Street is out of control.

When the Alt-A time bomb goes off the derivatives inextricably tied to it will look like Hiroshima all over again. Except this time it will be felt worldwide. Tick, tick, tick…