The Shocking True 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.


Smart investors are preparing now


We just published a 21-page investment report titled Stock Market Crash Survival Guide.


In it, we outline precisely how the crash will unfold as well as which investments will perform best during a stock market crash.


We are giving away just 1,000 copies for FREE to the public.


To pick up yours, swing by:


Best Regards


Graham Summers

Chief Market Strategist

Phoenix Capital Research



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lucky and good's picture

It has become abundantly clear that when it comes to the "economic chips" the powers to be have no intention of letting them fall where they may. However, several factors determine just how much influence can be applied to the the final outcome of current economic policies. Continuing with 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.

My point is we could find ourselves up to our neck in chips in a blink of an eye, and in the middle of an economic tsunami all bets are off as to how successful efforts to stem a catastrophe might be. The financial overlords may be losing control and this means during the final stage of the global shakedown events will be chaotic and become very wild. The article below titled, "The Final Shakedown Will Be Uncontrolled" tells how violent the crash might be.

bamawatson's picture

well some ole boy on this site lost his stack in a tragic boating accident; surely he anxiously awaits "the deployment of the ocean-floor mining machines currently under development"

SweetDougisaTwat's picture

Yeah, we have heard all about the "boating accident" many times before by many others on this site.  It sure would be splendid if that "ole boy" actually had a non-stupid comment that might inspire others to rational thought and realistic action.

Wow72's picture

Our governments credibility is falling like a meteorite,  BUY GOLD.

InnVestuhrr's picture

Gold price will suffer apocalyptic price collapse after the deployment of the ocean-floor mining machines currently under development. These machines will just crawl along the bottom sweeping up millions of years worth of highly-concentrated gold that percolated up in super-heated water through volcanic vents and precipitated out on the bottom.

All those thousands of tons of new highly-concentrated gold are just sitting there waiting to be scooped up, refined and sold at huge profit, which will greatly increase the supply of gold and drop the price like a falling meteorite, same as fracking did to oil and gas.

dreadnaught's picture

go long on those gold-foil wrapped chocolate coins

lasvegaspersona's picture


you could be right...but what are you going to do TODAY?

GLD dumped another 15 tons from inventory today. 639 tons left and who knows how low it can actually shutting down.

When the ETF closes owners will be cashed out. The way gold is going maybe they get $50 per share. Phyz will be impossible to get. Those with it will wait quietly to learn the new Physical Only price. Those without will still be on ZH pushing Bitcoin.

Today could be you last day to buy real gold...but don't may not be until next Tuesday.

raeb's picture

All those thousands of tons of new highly-concentrated gold are just sitting there waiting to be scooped up, refined and sold at huge profit,



Great, there should be plenty for the world to go on a "real" gold standard so that all of us can have savings that maintain their original value.

DontWorry's picture

Yeah, deep sea resource extraction always goes so well...

Wow72's picture

They better get to work because the economy isnt going to wait too much longer.  No matter how much gold they find there will always be a buyer..  You fucking gold bashers are fucking useless.  Go buy some bitcon, its more rare... .LMFAO.... Until they decide to mine some more.  Go print some more fiat... Worthless garbage... Regardless of how much they find there is still only 10 yrs worth +- it doesnt change the overall situation much at all... No matter what we only have so much gold on the planet. The propaganda club is going full throttle because its getting close. 


At least we know someone has to do work to produce the gold, unlike fiat and shitcoin.

SweetDougisaTwat's picture

Gold trades [in cycles] like every metal, commodity, equity, bond, etc..  It is no longer money's equivalent for all the reasons, Presidents, and history of which you should be aware.

PS.  We are making a killing with positions in GLL right now, and have been for a while.  When that ends, it will be time for GLD.  I'll let the market tell me when that is, not a Goldbug.

Wow72's picture

Your Comment: "It is no longer money's equivalent for all the reasons, Presidents, and history of which you should be aware. "

A 1oz. gold eagle is currency although its only worth 50$,  the dollar is so worthless its actually worth over a thousand.  Im kind of anticipating the rest of the world saying FUCK the dollar... I think we will see a replacement sooner than later, then we will see what the rest of the world considers "money".   I think lots of people are sick of Uncle Sham's fake fiat and their bullying

PoasterToaster's picture
PoasterToaster (not verified) SweetDougisaTwat Dec 2, 2015 7:23 PM

Gold is the only true money.  Its value never changes.  Everything else is bullshit.

You are either a gold bug or a paper bug.  Let's see how cashing out goes for the paper bugs.  What are you going to cash into?  Mansions?