Cyprus and the Global Banking Mafia America is on the Hit List

Which means? . . .

The communiqué announced the creation of the all-too-Soviet-sounding Financial Stability Board (FSB)….

The Financial Stability Board. Remember that name well, because they now have control of the planet’s finances . . . and, when one peels the onion of the communiqué, control of much, much more.

…the Bank for International Settlements (BIS), out of which the FSB operates… (is) Known as Hitler’s bank, the Bank for International Settlements worked arm in arm with the Nazis, facilitating the transfer of gold from Nazi-occupied countries to the Reichsbank, and kept its lines open to the international financial community during the Second World War.

…the BIS is completely above the law.

It is like a sovereign state. Its personnel have diplomatic immunity for their persons and papers. No taxes are levied on the bank or the personnel’s salaries. The grounds are sovereign, as are the buildings and offices. The Swiss government has no legal jurisdiction over the bank and no government agency or authority has oversight over its operations.

In a 2003 article titled “Controlling the World’s Monetary System: The Bank for International Settlements,” Joan Veon wrote:

“The BIS is where all of the world’s central banks meet to analyze the global economy and determine what course of action they will take next to put more money in their pockets, since they control the amount of money in circulation and how much interest they are going to charge governments and banks for borrowing from them. . . .
When you understand that the BIS pulls the strings of the world’s monetary system, you then understand that they have the ability to create a financial boom or bust in a country. If that country is not doing what the money lenders want, then all they have to do is sell its currency.

So it is no surprise to find that the plan to use depositor’s money to cover bank failures originated from the Financial Stability Board.

The pretense is that these august institutions are operating in the best interest of the public – what a joke. The BIS and its minions, the European Central Bank, the IMF and the U.S. Fed are run by bankers interested in protecting themselves and maintaining their financial control over the governments and economies of Earth.

Which leaves us where?

• The two largest banks in Cyprus were failing. In March of this year (2013), the IMF, the European Central Bank, and the European Union (known as the Troika) forced a “bail out” plan on the banks that included converting billions of euros of depositor’s funds to bank stock.
• The depositors had no say in this as it turns out that bank deposits are actually owned by the bank, the depositors being unsecured creditors.
• It also turns out that this plan was not a unique, one-time solution, but the initial step of a strategic agenda, which was formally issued by the FDIC and the Bank of England on December 10, 2012.
• The FDIC / Bank of England plan originated from the Financial Stability Board, the newly created enforcer for the Bank for International Settlements, the planet’s most powerful and controlling financial institution.

DERIVATIVES

There is, however, one more piece of this puzzle that directly affects depositors of U.S. banks. An important piece.

To understand this aspect of the game, one must have a rudimentary understanding of Derivatives – a type of investment Warren Buffet has called Financial Weapons of Mass Destruction.

Derivatives are financial instruments that derive their value from some underlying asset.

The term was slammed into the public consciousness during the financial crisis of 2008-2009 among discussions of the infamous mortgage-backed securities.

Mortgages were packaged up and sold in bundles to banks and others. The actual mortgages were the underlying asset.

But mortgage-backed securities are not the boogieman of international finance today – oh no.

INTEREST RATE SWAPS

The entire planet is now mired in a vast interconnected Ponzi scheme of more than a $1.2 Quadrillion dollars of derivatives, the majority of which (about 60%) are bets on the direction of interest rates.

That’s right; about seven hundred trillion dollars of these derivatives are what are called interest rate swaps and are traded in a casino that is so vast even the people who built it have lost control.

Interest rate swaps are nothing more than bets on the direction of interest rates – will they rise or fall? An investment bank thinks rates will go up. Another bank thinks they will go down.

And they bet.

The bet is called a swap (they are swapping risk).

Those doing the betting are called counter-parties.

Once a bet is made, there are bets on that bet and bets on those bets and then bets on the bets of the bets, and today… stay with me … they make up a $700,000,000,000 – seven hundred TRILLION dollar house of cards.

The figure is mind numbing.

How exposed are U.S. Banks?

Bank of New York Mellon: $1.375 Trillion in derivatives
State Street Financial: $1.390 Trillion in derivatives
Morgan Stanley: $1.722 Trillion in derivatives
Wells Fargo: $3.332 Trillion in derivatives
HSBC: $4.321 Trillion in derivatives
Goldman Sachs: $44.192 Trillion in derivatives
Bank of America: $50.135 Trillion in derivatives
Citibank: $52,102 Trillion in derivatives
JP Morgan Chase: $70,151 Trillion in derivatives

Total derivatives exposure of the nine biggest US banks: $228.72 Trillion
http://demonocracy.info/infographics/usa/derivatives/bank_exposure.html

However, note, that because there are bets on bets on bets, many of the derivatives would cancel each other out – the actual cash that is at risk is about 20% of the face amount above or about $45 trillion (the entire annual production of the U.S. economy is about $15 trillion).

Still, there was a piece of the derivative picture that puzzled me. The biggest banks in the country, the guys that own the Fed, are buried in trillions of dollars of derivatives. The majority of the derivatives are interest rate swaps. Sooner or later interest rates are going to rise, and when they do, many of the banks that own these swaps are going to get slaughtered.

But surely they know that. They may be evil, but they aren’t stupid when it comes to their own survival.

And then the penny dropped.

The original article I read on this situation written by Ellen Brown (one of the few researchers who understands who and what the BIS is and does – www.ellenbrown.com) linked to another article that turned all the lights on.
http://www.nakedcapitalism.com/2013/03/when-you-werent-looking-democrat-bank-stooges-launch-bills-to-permit-bailouts-deregulate-derivatives.html

In the US, depositors have actually been put in a worse position than Cyprus deposit-holders, at least if they are at the big banks that play in the derivatives casino. The regulators have turned a blind eye as banks use their depositories to fund derivatives exposures … (remember, depositors are unsecured creditors) … One big reason was that derivatives reforms made derivatives counterparties require collateral for any exposures, meaning they are secured creditors. The 2005 bankruptcy reforms made derivatives counter parties senior to unsecured lenders.

….

Remember the effect of the 2005 bankruptcy law revisions: derivatives counter parties are first in line, they get to grab the assets first and leave everyone else to scramble for crumbs.

You get the picture now: the Bank for International Settlements, through its Financial Stability Board created a strategy that failing banks (and those pregnant with the evil spawn of derivatives) could save themselves by taking some of their depositors funds and converting them to stock in the bank.

For example, Bank of America transferred its derivatives from its Merrill Lynch operation to its depository operation (the bank) in late 2011. Ellen Brown states it quite clearly:

“The deposits are now subject to being wiped out by a major derivatives loss.” http://www.counterpunch.org/2013/03/28/the-confiscation-scheme-planned-for-us-and-uk-depositors/

WHAT TO DO

1- In the first place, according to one source, the FDIC will have to get legislative approval for their plan.

“Congress would never approve such a law,” you say.

Really?

Take a look at a couple of corporate lobbying coups.

(April 1, 2013) The Monsanto Protection Act, which President Obama signed into law this week, will strip judges of their constitutional mandate to protect consumer rights and the environment, while opening up the floodgates for the planting of new untested genetically engineered crops, endangering farmers, consumers and the environment. The result is that GMO crops will be able to evade any serious scientific or regulatory review.
http://www.nationofchange.org/how-monsanto-protection-act-became-law-1364825964

Did you know that when the pharmaceutical industry muscled the Prescription Drug Benefit law through Congress a few years ago – a trillion dollar tax payer gift to Big Pharma – that it contains a provision that prohibits the government from negotiating the price they pay for drugs?

And, as the great Dave Barry says, “We are not making this up.”

The law that created Part D Medicare prescription drug benefits prohibits price negotiation by the government. The law, enacted in 2003, after an incredible lobbying blitz by drug companies, states that the Secretary of Health and Human Services “may not interfere with the negotiations between drug manufacturers and pharmacies…; and may not require … or institute a price structure for the reimbursement of covered part D drugs.” 42 U.S.C. 1395w-111(i). This part of the law was a giveaway to drug industry lobbyists written in part by Rep. Billy Tauzin, who later took an extremely lucrative position as the CEO of PhRMA, the drug industry’s lobbying group. [New York Times]
http://www.ourfuture.org/makingsense/alert/2008083312/negotiate-prescription-drug-prices

And you have seen above how the banking industry managed to legislate derivatives into a position senior to depositors.

So let’s just not bank on Congress protecting the interests of the American public (no pun intended). That doesn’t mean we shouldn’t fight like Hell to prevent the legislation when it is presented. But this assumes that the wording is not buried in some 2,000 page bill benefiting widows and orphans that is quietly passed by lawmakers in the middle of the night.

2- If you have deposits in one of the G-SIfIs, I recommend you move them (the list of the Financial Stability Board’s G-SIFIs can be found at the following link).
http://www.financialstabilityboard.org/publications/r_121031ac.pdf (This link went to the FSB’s site listing G-SIFIs when I wrote the paper. However, strangely, testing it now, reveals that the FSB has disabled it.)

If it does not work when you read this, use:

http://regreformtracker.aba.com/2011/11/financial-stability-board-names-29.html (scroll to the bottom of the article and click the G-SIFI link).

Isn’t it too cute that the planet’s biggest banks get labeled as too big to fail. It doesn’t matter what they do, the government will not let them fail and if the FDIC has its way, they will simply convert some of the their depositor’s funds to stock – Shazam! Saved.

It is also noteworthy that many of these banks are packed to the pin stripes with derivatives.

3- Then again, it is quite possible that when the FDIC pushes its deposits to stock legislation, it could seek to expand the program’s jurisdiction, enabling them to convert the deposits of any failed bank to stock.

I’m just saying…

After all, the definition of a systemically important financial institution (SIFI) is a bank, insurance company, or other financial institution whose failure might trigger a financial crisis. That is a very broad definition.

It would take a “crisis” for such legislation to pass Congress. But these guys can create a financial crisis with the click of a mouse and then hold Congress hostage to panic and civil unrest until they coughed up legislation. It has only been a few years since Hammering Hank Paulson slammed TARP through Congress during the 2008 financial crisis with threats of riots in the streets. TARP was a $300 billion gift to Wall Street investment banks, the fraternity from which he came.

A few people bitched. Nothing was done.

Regardless of any legislation now or in the future, you should be leery of any bank that is carrying derivatives on its balance sheet. Remember uncle Buffet’s warning, they are “Financial weapons of mass destruction.”

Even if your bank isn’t carrying derivatives, you need to be sure they are sound. The banks in Cyprus didn’t fail because they had derivatives, they had other investments (Greek bonds) that went bad.

You can check the general health of your bank at www.bankrate.com or www.weissrating.com. The information at Bankrate.com is free, Weiss charges $20 for a report on a bank.

These sites give letter grades that are certainly better than having no data at all. However, they don’t have data on interest rate swaps the bank might be carrying, and they omit some other key analysis points. Still, they are much better than nothing.

Credit unions can be a good alternative to a bank. They are often healthier than their bank cousins, though some carry derivatives as well. Both Bankrate and Weiss also have credit union ratings. The large chain banks (B of A, Citibank, Wells, Chase) usually have the convenience of a close location, while credit unions often just have a main office and perhaps a branch or two. But it is the large chain banks that are buried in derivative exposure and are named as G-SIFIs (potentially subject to the deposit to stock conversion scheme). Moreover, with online banking today, you can do most of your banking at home.

If you feel you need a professional analysis of your bank, including derivatives exposure, and/or research for a healthy alternative bank or credit union near you, contact me via email (see below). Having been a banker in my former life, I can read a bank’s balance sheet and look in corners that normally escape the general public. I charge for this service depending on what is needed as it takes time and research and sometimes I need to call the bank to peel some onions that appear to be sprouting on the bank’s financial statement.

Whether you do the research on your own or contact me, please don’t blow this off. I’m not trying to be alarmist here: the U.S. banking industry is not going to crash tomorrow.

But mark well: these plans being put in place by the Bank for International Settlements and published by the FDIC are not idle “safeguards”. They are being put in place for a reason. A banking crisis will come. Sooner or later, it will come. The entire global banking structure is sitting on the mother of all bubbles – a multi-trillion dollar derivatives casino, and when it explodes, all Hell will break loose.

Having your funds in a healthy financial institution will help protect them, particularly if/when the FDIC’s plan to “convert deposits to stock” in failing banks goes into effect.

4- And finally, if you really want to do something about the criminally corrupt banking system and the banksters that control the world’s financial structure, promote the concept, to legislators and others, of a monetary system based on products and real estate – a system whereby money represents actual production. That would eliminate inflation and deflation and send the global financial mafia into permanent retirement.

Meanwhile, keep your powder dry.

John Truman Wolfe
AKA Bruce Wiseman
[email protected]

John Truman Wolfe, author of America the Litigious, Mind Games, and The Gift has released his latest stunning bestseller – Crisis By Design: The Untold Story of the Global Financial Coup and What You Can Do About It. Wolfe draws on experience as a senior credit officer in two banks, and co-founder of a prestigious Los Angeles based business management company, where as a registered investment adviser he oversaw the financial and investment matters of some of the biggest names in Hollywood.