The Sad Truth About the State of the Financial System Today

Phoenix Capital Research's picture

For six years, the world has operated under a complete delusion that Central Banks somehow fixed the 2008 Crisis.


All of the arguments claiming this defied common sense. A 5th grader would tell you that you cannot solve a debt problem by issuing more debt. If the below chart was a problem BEFORE 2008… there is no way that things are better now. After all, we’ve just added another $10 trillion in debt to the US system.


Similarly, anyone with a functioning brain could tell you that a bunch of academics with no real-world experience, none of whom have ever started a business or created a single job can’t “save” the economy.


However, there is an AWFUL lot of money at stake in believing these lies. So the media and the banks and the politicians were happy to promote them. Indeed, one could very easily argue that nearly all of the wealth and power held by those at the top of the economy stem from this fiction.


So it’s little surprise that no one would admit the facts: that the Fed and other Central Banks not only don’t have a clue how to fix the problem, but that they actually have almost no incentive to do so.


So here are the facts:


1)   The REAL problem for the financial system is the bond bubble. In 2008 when the crisis hit it was $80 trillion. It has since grown to over $100 trillion.


2)The derivatives market that uses this bond bubble as collateral is over $555 trillion in size.


3)Many of the large multinational corporations, sovereign governments, and even municipalities have used derivatives to fake earnings and hide debt. NO ONE knows to what degree this has been the case, but given that 20% of corporate CFOs have admitted to faking earnings in the past, it’s likely a significant amount.


4)   Corporations today are more leveraged than they were in 2007. As Stanley Druckenmiller noted recently, in 2007 corporate bonds were $3.5 trillion… today they are $7 trillion: an amount equal to nearly 50% of US GDP.


5)   The Central Banks are now all leveraged at levels greater than or equal to where Lehman Brothers was when it imploded. The Fed is leveraged at 78 to 1. The ECB is leveraged at over 26 to 1. Lehman Brothers was leveraged at 30 to 1.


6)   The Central Banks have no idea how to exit their strategies. Fed minutes released from 2009 show Janet Yellen was worried about how to exit when the Fed’s balance sheet was $1.3 trillion (back in 2009). Today it’s over $4.5 trillion.


We are heading for a crisis that will be exponentially worse than 2008. The global Central Banks have literally bet the financial system that their theories will work.  They haven’t. All they’ve done is set the stage for an even worse crisis in which entire countries will go bankrupt.


The situation is clear: the 2008 Crisis was the warm up. The next Crisis will be THE REAL Crisis. The Crisis in which Central Banking itself will fail.


If you've yet to take action to prepare for this, we offer a FREE investment report called the Financial Crisis "Round Two" Survival Guide that outlines simple, easy to follow strategies you can use to not only protect your portfolio from it, but actually produce profits.


We are making 1,000 copies available for FREE the general public.


To pick up yours, swing by….


Best Regards

Phoenix Capital Research


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lucky and good's picture

Let the chips fall where they may is a figure of speech which means, "What happens happens" or "Let the imminent events unfold." This metaphoric term dates back to the 1800s and alludes to chopping wood. However, several factors determine just how much influence can be applied to the the final outcome of current economic policies.

Using the metaphor of "falling chips." Things like the size of the chips, the rate or speed at which they fall, and the number of chips in the air may make them uncontrollable. In my opinion luck and caution will impact our individual fortunes as we move through the financially violent period before us. Below are more thoughts concerning the idea our economic overlords have lost control of the game.

Radical Marijuana's picture

I liked the circular dominoes image embedded in that article:

Phoenix Capital routinely underestimates the degree to which the established systems are based upon triumphant organized crime creating systems operating ENFORCING FRAUDS. Furthermore, Phoenix Capital tends to be excessively financialized in the perspective it takes on the problems, which is correct enough, on its own superficial level, but otherwise profoundly wrong.

The deeper levels of the Sad Truth about the financial system have been that "money" was created out of nothing as debts in order to "pay" for strip-mining the planet's natural resources at an exponential rate, which was being done through systems of legalized lies, backed by legalized violence, which were based on attitudes of the maximum possible evil deliberate ignorance towards the longer term consequences from doing that.

When the triumphant systems of organized crime that have been raping and plundering the planet reach some real limits of diminishing returns, that do not enable those to continue to grow at an exponential rate, the first and foremost places that will show up is through the fundamentally fraudulent financial accounting systems. However, as that happens, the kinds of irreconcilable social polarizations those triumphantly ENFORCED FRAUDS have driven will be revealed to have been relatively trivial compared to the more important ways that civilization had been behaving in criminally insane ways, due to it being controlled by systems based upon ENFORCING FRAUDS.

Like that image of the dominoes arranged in a circle, what goes around comes around. However, since Earth is a big planet compared to size of human beings, that will take a while. But nevertheless, the superficial issues with respect to the financialization being based upon runaway systems of ENFORCING FRAUDS will finally end up having far more profound consequences than merely some level of crazy collapse of the financial systems.

Those financial systems have been paying for the planet to be strip-mined, and thus, those systems actually be stopped by running into real limits of diminishing returns from being able to continue to do so, (despite that the Earth is BIG, and that will take relatively long time.) The deeper aspects of the Sad Truth about our financial systems are that, because those operate through the social successfulness of backing up lies with violence, or ENFORCING FRAUDS, the degree to which those are socially successful reflect the degree to which civilization has become psychotic, and criminally insane.

It is almost impossible for people inside that civilization to gain any proper perspective upon the ways that their social success was achieved through operating inside fundamentally fraudulent financial accounting systems, that were based upon deliberately ignoring the basic laws of nature, such as the conservation of energy and matter, because being able to make "money" out of nothing as debts violates that basic law of nature at face value (although, on deeper levels, that is not the case, due to the ways that those are ENFORCED FRAUDS.) Similarly, our civilization also has inverted the understanding of concept of entropy, in ways which almost everyone takes for granted, despite that means that our financial systems based upon ENFORCED FRAUDS are actually deliberately misunderstanding everything in the most absurdly backward ways possible.

The Sad Truth of the financial system today is WAY MORE TRAGIC than Phoenix Capital presents. Of course, that tragic trajectory may not effect the more wealthy and older people before they have died. Rather, the Sad Truths regarding the financial system being based upon ENFORCED FRAUDS, which have "paid" to strip-mine the planet, are going to have to be faced more by future generations. In the metaphor of letting the chips fall where they may, the extreme degrees of social success based on backing up lies with violence, or ENFORCING FRAUDS, has driven civilization to be cutting down the tree of life upon which it was standing.

Our financial system has become globalized electronic monkey money frauds, backed by the threat of force from apes with atomic bombs. Human beings, controlled by those amongst them that were the best organized gangs of criminals, have been organized to engage in the maximum possible rape and plunder of the planet ... Of course, for those who were doing that during its earlier phases, that seemed like a wonderful thing for them to indulge in. However, as time passes, and future generations arrive upon that scene, the Sad Truth about our financial systems having been based on ENFORCED FRAUDS, which deliberately ignored and and misunderstood the laws of nature as much as possible, will result in the circle of dominoes that we have knocked down spinning around to hit us like boomerangs in the back of our heads, coming out of our blind spots.

Phoenix Capital's series of articles continue to be correct, within their own limited domain, given their superficial view upon those issues. Although Phoenix Capital tends to present the bigger picture, (albeit within that limited context) more than most others, there continues to still be way too much taking for granted the ways that human beings have collectively become psychotic and criminally insane, due to civilization ending up being controlled by the most psychopathic people, who were the best at backing up lies with violence, which therefore resulted in our financial systems being based upon ENFORCING FRAUDS. Indeed, inside of that political economy, the basic ideas regarding "production" and the "producers" have been also perverted in absurdly backward ways.

By the time we realize the full extent of the consequences of having operated our political economy through runaway debt slavery systems generating debt insanity situations, that will then be relatively trivial compared to the overall consequences of the various ways that "money" made out of nothing has been "paying" to strip-mine the planet. By and large, it is practically impossible for the vast majority of people to perceive or assess the degree to which human systems have gone so wildly out of balance. Therefore, it is almost impossible to fully imagine what it would take to bring those back into better balance ...

The Sad Truths about our financial systems are far More Tragic that Phoenix Capital presents. We were lucky to be born on a planet with abundant life. We thought it good to make the maximum possible killing of that life, due to the ways that our fundamentally fraudulent financial accounting systems operated. Those days of being lucky and good are ending, as we rush through strip-mining the planet at an exponential rate.

In my opinion, the total human population in about a Century will more probably be less than one billion, rather than more that ten billion. However, I find it impossible to fully imagine what that means generally, as well as can not emotionally comprehend what that may mean to me personally. Meanwhile, the problems that our financial pyramid systems are having are showing up on the periphery and bottom of that system first, while those are working in towards the center and top. For many of those at the bottom or on the periphery of the globalized pyramid systems, those problems are no longer merely theoretical things to worry about, as those problems still are for most of the people who are still living relatively comfortable lives, still situated more towards the center or top of those social pyramid systems, which continue to be supported by the degree to which it continues to be possible to strip-mine the planet an exponential rate, as far as that being done has its immediate benefits delivered to them (while the real costs are deferred onto others.)

The GREAT PARADOX has been that human beings always lived as robbers in their environment, while progress in physical science enabled them to do that at many orders of magnitude greater degrees than ever before. However, while the industrial revolutions were based upon prodigious progress in physical science, nothing like that happened in political science, because real politics was almost totally based upon integrated systems of legalized lies, backed by legalized violence, or ENFORCED FRAUDS.

Therefore, all of the progress in physical science FAILED to change the social pyramid systems, but rather, only enabled those systems of ENFORCED FRAUDS to grow at an exponential rate, by strip-mining the natural resources of that planet as fast as possible, which was made possible by being able to deceive and destroy anyone else who may have otherwise resisted that. The globalized civilization that we are now living inside of was the work of the most psychopathic people, whose social successfulness was based on their abilities to back up their lies with violence. Hence, the Sad Truths about our financial systems are that those are all based upon ENFORCED FRAUDS, which have become the driving forces behind irreconcilable social polarizations, and even worse irreparable destruction of the natural world.

Metaphorically speaking, the industrial revolutions provided human beings with chains saws to cut down the trees of life, and those chips will fall were they may. The social debt engines, and the physical steam engines, were invented about the same time, and for several Centuries those have been fulfilling their potential to enable human beings to rape and plunder the planet. Those enabled the biggest ever boom, which will be followed by the biggest ever bust. The circle of dominoes that we started knocking down will continue to spiral around.

There is a general trend to not want to fully face the magnitude of the MADNESS manifested through financial systems based upon ENFORCED FRAUDS. Rather, the people who fail to do so can then spout various bogus "solutions" which are consistent with their superficial views regarding what the problems are. Hence, the deeper Sad Truths are indeed WAY MORE TRAGIC, because the more one learns, the worse it gets, regarding how and why civilization is being controlled by the ability to back up lies with violence, whose primary form is that our financial systems are based upon ENFORCED FRAUDS, successfully operated by the most psychopathic people, who have therefore been able to make and maintain a globalized civilization which is similarly psychopathic.

The Darwin Mode's picture

"The next Crisis will be THE REAL Crisis. The Crisis in which Central Banking itself will fail." --Phoenix Capital Research

So what? Why would the central banks of the world give one shit about systemic failure when (1) they know the serfs have them covered for any bail-out/bail-in scheme they desire, and (2) failure of the present model is almost certainly part of the plan anyway? They old system gives way so a much larger one can take its place.

And the serfs will give it all to them, whatever it takes... as long as they get to keep their gadgets and gizmos.

steveo77's picture

Yesterday someone posted a link to list of Fed agencies, there were like 50 starting with A.   I Asked if anyone could visit each letter and compile into one list, and a kind soul did and emailed it to me.

I compiled into a spreadsheet you can download.

Over 500 Federal Agencies, But the Basic Law Only Allows for a Handful of Agencies and Functions

Full list is here, kind of disgusting

I think it is part of the problem.  

Way too large a government, over 500 Federal Agencies, being influenced in way too many ways.

Think if a candidate promised to eliminate / combine 200 of these agencies.   He would probably lose the gov worker votes, and the moocher votes.

BoNeSxxx's picture

Strike 202... Federal Reserve is entirely private. And the true source of the other 499+ since taxes create the demand for fiat.

Dickweed Wang's picture

I think it is part of the problem.  

Way too large a government, over 500 Federal Agencies, being influenced in way too many ways.

Gee, you really think this is a problem? /sarc

Grandad Grumps's picture

Wow ... my guess is that (excluding employees, employed by the agencies) less than 1% if the population would notice if 95% of the agencies were dissolved tomorrow.

TVP's picture

Not exactly.  If government were reduced to its only valid purpose of protecting citizens from initiatory force, then ALL the population would notice, because taxes would decrease significantly and buying power would begin to rise amidst greater economic freedom.  

Most of those government agencies come complete with armed bureaucratic enforcers - a symptom of fascism.  We don't need ANY of that shit.  Only the parasitical ruling-class requires such insanity.  


Consuelo's picture


Why is it that now whenever I see the word 'Phoenix' used in anything, my mind conjures up thoughts of a 'diploma mill', a cheap 'Santos gold' plated bird you buy at a flea market, or one of those Frank Frazetta black velvet 'works of art' sold on parking lots in the mid 1980's...? 

lordbyroniv's picture

Frank Frazetta was a great artist.  Sorry.  But you lost me there.

kchrisc's picture

"The Sad Truth About the State of the Financial System Today"

Grift, plunder, and tyranny.

Liberty is a demand. Tyranny is submision..

Troy Ounce's picture



I think you're still optimistic.

JRobby's picture

Sad thing is that these "theories" were DOA before implementation. Kick the can and wait for the sun to come out had no chance in 2008 conditions. Less of a chance now.

Hitlery_4_Dictator's picture

If you follow Phoenix Capital Research you are doomed....don't do it

amanfromMars's picture

Howdy, Hitlery_4_Dictator,

Is the analysis though of the situation by Phoenix Capital Research faulty and misleading, or quite correct and rightly disturbing? 

Hitlery_4_Dictator's picture

They are right in the long term, but if you would have followed thier advice prior you'd have lost a boat load. 

Rock and Hard Space's picture

I take it you have cashed out of the casino (which, btw, is what Phoenix says, right?) and actually made a crap load of soon-to-be-worthless fiat.


Funny, my hub tells me how much money he has in his portfolio and tells me how smart he is compared to my warnings of doom.

For today, he is right, as are you.


What scares me is when the ride stops, and if you can't hear the squealing of the gears yet, you obviously aren't listening.

Hitlery_4_Dictator's picture

No I followed thier advice and I can tell you from expereince I lost a boat load. 

Bluntly Put's picture

We're all doomed the only question is one of time, when?

On a long enough timeline the survival rate for everyone drops to zero.

Upper right hand corner by the way.


Citxmech's picture

>  Next Crisis is the BIG ONE

>  Next Crisis will set the Stage for THE BIG ONE


Just curious who thinks we've got room for more than one leg down moving forward. 

Rock and Hard Space's picture

Funny that is

I didn't think the can kicking could last this long.

So while I think/feel that the next one is the one before the last, this world is just messed up enough to lead me to believe I could be wrong and the next one is the big one.

This must be what Californians feel like during a quake.