Saturday, December 27, 2014

Congress Empowers Banks to Gamble with Deposits

Congress Empowers Banks to Gamble with Deposits






Everyone knows that the 2008 Global Economic Collapse was caused primarily by banks’ unregulated casino-style gambling.  Instead of blackjack and slots, the banks bet massively on financial derivatives known as a “credit default swaps,” which Warren Buffett famously called “weapons of financial mass destruction.”  Now, Congress has just passed a new spending bill that allows banks to once again use your deposited money to bet on these highly-risky derivatives. The criminal banks have already bet massively on these toxic swaps, to the tune of over $30 TRILLION – 8 times the budget of the United States Government and more than the entire value of the U.S. stock market!  And now that Congress has reopened the casino doors -- and the banks can now use YOUR deposited money as bankroll -- experts predict the coming explosion of financial WMDs will take down the global economy worse than we’ve ever seen.  And there’s only ONE THING you can do to protect yourself.

Big Banks Gamble with YOUR Money
Credit default swaps were invented by banking conglomerate JP Morgan in 1994.  Simply put, a credit default swap is an unregulated type of insurance policy against loans going bad.  So as banks wrote millions of dangerous loans during the housing bubble, they made an unbelievable fortune selling insurance policies – swaps – on those loans.
But there’s one HUGE problem:  When you sell insurance policies, you better hope that most buyers don’t need to collect on them.  It’s just like earthquake insurance:  as long as there’s no earthquake, insurance companies make a fortune on earthquake insurance.  But as soon as there’s a massive earthquake, insurance companies suddenly go out of business and homeowners are left holding the bag.  This is exactly why Warren Buffet called swaps financial WMDs – because they are as destructive as an atomic bomb.
And here’s what happened:  When the housing bubble burst and millions of loans when bad, banks were suddenly on the hook to pay the swap-buyers hundreds of billions of dollars.  And just like earthquake insurers, they didn’t have the money to pay them.
What’s worse, other financial institutions had all kinds of counterparty arrangements with these massive banks, so the whole entire system fell like a house of cards.  And you, the American taxpayer, spent trillions of dollars to bail out the “Too Big to Fail” criminal banks.  But not before the entire global economy collapsed during the 2008 crisis, costing average Americans trillions in their investments and retirement accounts.
History Is About to Repeat Itself – Only Worse
The scary truth is, nothing has changed.  Regulations were put in place after 2008 to prevent banks from using your deposits in risky derivative trading, but now Congress has removed these regulations and given the green light to banks to gamble with your money.....
 
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