The Western Financial System Is In A State Of Collapse

The reason for this coming broker-dealer crisis is simple. The entire Western financial system is built on debt – it’s an anti-capitalist system set up to make the rich richer and the poor poorer. It started in 1913 with the founding of the Federal Reserve. It went further down the slippery slope with the US gold confiscation in 1933. It reached the beginning of the end in 1971 when Nixon closed the gold window and turned the US dollar (officially called the Federal Reserve Note) into a complete fiat currency.

More recently, the repeal of the Glass-Steagall Act allowed investment banks to acquire broker-dealers and pass the risks of 100-1 leverage downstream to all client accounts.  Therefore, your stock investments are now only as safe as the speculative portfolio of your broker-dealer. Since most Western investment houses are leveraged at least 40-1, your stocks are no safer than a 40-1 bet on European bonds (which most Western investment banks are leveraged to the teeth).

Some believe the Securities Investor Protection Corporation (SIPC) will protect their stocks, which insures stock accounts against broker collapses up to $500k for securities and account cash balances up to $250k. But what if you have more than $250k in cash and/or more than $500k of securities in your account? What if one of the largest broker-dealers in the country went bust, taking down thousands of accounts and depleting the SIPC's entire reserves? What if the SIPC itself goes bankrupt? What few people know is that the SIPC carries only about $1 billion in funds to cover investors! This means only one or two high-profile broker-dealer bankruptcies will be enough to completely wipe out the SIPC.

Some may claim the US government will bail out the SIPC to whatever extent is needed. But what if two major broker-dealers go bust while the US government suffers a major Treasury bond auction failure? This is all but a certainty in the coming years.

And the same thing applies in Canada to Canadian brokerages and Canadian stocks. The Canadian economy is intricately tied to the US. In fact, not many people realize this, but the Canadian dollar is backed by the US dollar. The Canadian Government sold all its gold decades ago.

The entire monetary & financial system is headed for its final destination – total collapse… and 2008 was just the beginning.

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November 2010 - The FDIC loses $25 billion in one Year. "According to the country one lives in and where one has his deposits, these can be guaranteed by National/Federal institutions up to a certain maximum amount."

As of June 2010, the FDIC is in the red by $15 billion.

This is how the banks are melting away...

Updated December 2009, the FDIC itself needs to be rescued: The ratio for September is - 0,16!

NEW YORK (CNNMoney.com) — The government insurance fund designed to protect consumer bank deposits will likely stay in the red through 2012, Federal Deposit Insurance Corp. chief Sheila Bair said Wednesday.

Testifying before members of the Senate Banking Committee, the nation’s top commercial bank regulator stressed that her agency was taking immediate steps to replenish the dwindling fund. But she said those efforts would not put the rescue fund in the black for a little more than two years.

The fund has been severely strained in recent months amid the recent surge in bank failures. Ninety-eight banks have failed so far this year, reducing the fund’s value to $10 billion from $45 billion a year ago.

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The Federal Deposit Insurance Corporation (FDIC) -USA

Is getting to a point where it needs recapitalization, with 199 banks on the troubled list and probably many more to come.

The Securities Investor Protection Corporation (SIPC) - USA

It is a joke, capitalized at $1.5 billion, yet they are still quoted as the guarantor of all security values at all brokerage firms.

Up to what limit are your savings/deposits with a bank insured/protected?

• In the USA, they are up to $100,000, and the limit has been increased to $250,000 per account holder.

• In the UK, the limit has been increased to £ 50,000.

• In Belgium, the limit has been increased to € 100,000.

• In Luxembourg, the limit is € 100,000 per account holder.

• In Ireland, there is a full guarantee for two years.

• In Greece, there is a full guarantee with no limit

This list will be updated as we receive new information: levels fluctuate and are adjusted daily as political authorities change their minds. PLEASE consult your banker for confirmation.

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