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Banks set to dump European defaults onto US taxpayers...
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FINCEN
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Joined: 08 Mar 2006
Posts: 1351

PostPosted: Fri Jun 24, 2011 5:42 pm    Post subject: Banks set to dump European defaults onto US taxpayers... Reply with quote

The tragedy that is the European economic saga could result in the American taxpayer assuming responsibility for $200 billion of the reported $890 billion worth of European loans that are reportedly in danger of default. The Bank for International Settlements details this fact in its Quarterly Review for June, 2011. The details though convoluted are the result of a complicated and convoluted series of transactions and agreements between the European nations and the Central Banking Coalition. The deals were purposely constructed in a manner that confused several fundamental details such as who owns the debt, who insured the debt, who profited along the way and most importantly who would be left holding the bag in the event of default.

On paper and in the press Europe holds the responsibility for approximately 95% of the debt. Most of this is to be born directly by Germany and France. However, these countries turned around and purchased Credit Default Swaps (CDS) from U.S. banks to protect themselves for a sum amounting to approximately half of the debt they own. What this means is that 'when' the countries in question end up defaulting on their loans, those U.S. banks that sold the credit default insurance to Germany and France will actually assume their debt.

More than half of that debt is in Greece, which will be the first to default. The U.S. banks are set to assume approximately $100 billion in credit default insurance to PIG countries of which about $35 billion involves Greek loans. All told the total outstanding credit default insurance held by U.S. banks on European credit exceeds $1.5 trillion dollars. In short Germany and France bought Greek debt then leveraged their risk purchasing insurance on that debt from U.S. Banks. The U.S. banks collected fees and pawned the insurance off on the U.S., government even as they were attempting to cover other bad loans through federal bailout money. The fees the banks collected were pocketed and posted as 2010 earnings. Out of these earnings the banks paid out record bonuses which in many cases were deposited in offshore or European accounts. These actions should've been trumpeted by the U.S., media but the largest media conglomerates are either foreign or bank owned. It is in the interest of 'no one' to disclose these facts.

As it stands if Greece, Ireland and Portugal 'who are rumored to fall in precisely that order,' default on their payment obligations, U.S. banks will pass on an estimated $35 billion dollars from Greece, and additional $54 billion 'from Ireland,' and $41 billion for Portugal, to U.S. taxpayers via the federal government. These estimated figures do not reflect an additional $63 billion in direct debt these banks are holding. It is truly a win-win situation for the banks as they stand to benefit from the privatization of resources in accordance with IMF demands upon Greece have illustrated. The defaulting nations face a complete loss of sovereignty and the U.S., economy assumes an burden it can il-afford, even in the event of a partial default.

Deutsche Bundesbank and Banque de France, the central banks of Germany and France are the two entities who purchased the default insurance from the U.S. banks. They just so happen to hold two of the largest ownership stakes in the European Central Bank accounting for 18.9% and 14.22%. The Bank of England is the second largest contributor at 14.5%. In short the aforementioned foreign banking entities have insured themselves against European losses that are to be assumed by U.S. citizens. As the European debt is assumed by the U.S., government, it will increase the U.S. debt load thereby further tarnishing its credit worthiness globally. Eventually the U.S. government will be forced to into a default of its own financial obligations and like Greece, the IMF will appear and begin the process of denationalizing the United States through the stripping of its resources.


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beemoe
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Joined: 07 May 2006
Posts: 845

PostPosted: Mon Jun 27, 2011 7:35 pm    Post subject: Beemoe Reply with quote

The common denominator again.....debt swaps. This was one of those things that I saw but didn`t see. So this is similar to that swap thang with various "tax avoidance programs' aka "Double Irish' and "Sandwiches" along with that "reverse merger thang" on a different scale.

So this is the m.o. here.

So there is a "transfer" here but it`s not about silver or gold but about swapping debt.

DO YOU THINK THAT THE GOLD AND SILVER THANG IS A RUSE DESIGNED TO GET THE TAXPAYERS TO LOOK THE OTHER WAY?
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beemoe
Commission Member


Joined: 07 May 2006
Posts: 845

PostPosted: Mon Jun 27, 2011 7:39 pm    Post subject: Beemoe Reply with quote

Hey Jiggy where can I get details on this debt swap. I`m curious who profitted from this? All right I got my answer....... Bank of International Settlements Quarterly Review.
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beemoe
Commission Member


Joined: 07 May 2006
Posts: 845

PostPosted: Sat Jul 02, 2011 11:54 pm    Post subject: beemoe Reply with quote

It`s funny I never knew you could get insurance on debt. I`m interested in how banks profit on this insurance. This further reminds me that there`s a way to accomplish most anything in the finance world like buying a 1000 apartment building no-money down and bringing home after taxes like $200,000 a month. yup I`m going there.

Isn`t there insurance for stock trading besides put and call options? Isn`t that PPUVL insurance?
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FINCEN
Administrative Assassin


Joined: 08 Mar 2006
Posts: 1351

PostPosted: Wed Jul 06, 2011 4:47 am    Post subject: Reply with quote

The Gold and Silver price surge was designed to draw the multitudes into that arena of investing. The purpose of which is currency retraction. Once the price collapses 'and it most certainly will,' all of those people who are hedging against the devaluation of the dollar will be wiped out and as a result, interest rates will rise and the dollar will regain it's luster. The trouble with the dollar "at least as far as international and institutional investors are concerned is "it's too accessible." Withdraw a few hundred billion and you are back in demand.

The banks profit in two primary ways on debt swaps. First on the fees generated from writing and issuing the insurance on the debt. They also hedge against default by betting that the borrower will indeed default. The trouble with debt swaps isn't the instrument rather the manner inquiry it has been employed. As it stands their is virtually nothing to discourage the holders of these claims against the debt to enter into an agreement with others to ensure a default that would trigger a payout via a hedge.
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