http://albertpeia.com/bankingsystemcollapse.htm
‘The EU continues to
flounder around as Cyprus, a country whose GDP accounts for just 0.2% of the
Europe’s economy, has proven the truth behind all of the “solutions” thrown
around by the ECB and EU politicians: that they really don’t have a clue how to
fix the problem plaguing Europe.
Why is this?
Because at the end
of the day, there is really only one solution to this whole mess: DEFAULT…
both by the banks and by EU nations as a whole.
What happened to
Wall Street in 2008? Banks that were over leveraged (meaning they borrowed far
more money than they actually had on hand) went bust because the assets they
bought with the borrowed money fell in value to the point that it erased the
actual money they had on hand.
Think of it this
way, if you borrow $30 for every $1 you actually own, and you invest that $30
in various assets, you only need those assets to fall 3% (0.03 * 30 = 0.9)
before you’ve wiped out almost all of your actual money (the $1 you owned and
which you borrowed the $30 against).
This is what took
down Lehman. And it’s what is taking down Europe today. The entire European
banking system is leveraged at 26 to 1. Lehman was 30 to 1, Europe as a whole
is only slightly below that,
And where did they
invest the $26 in borrowed money?
EU sovereign bonds…
(as well as garbage mortgages in the various EU housing bubbles).
When you are
leveraged at $26 to 1, you only need the assets you’ve invested in to fall 4%
before you are totally bankrupt. This 4% drop in asset prices has
already happened across Europe, the only reason that we haven’t seen a systemic
collapse there is because Mario Draghi, the head of the ECB, said he’d buy
unlimited amounts of EU bonds.
Note, Draghi said he
would buy these bonds, he hasn’t actually bought anything since he
said this.
So why did Draghi’s
statement matter?
Because the primary
assets owned by EU banks are EU sovereign bonds. And if EU bonds keep falling,
it results in the dreaded 4% drop in asset prices that would wipe out all the
EU banks’ capital.
So Draghi stepped in
last summer, promised to buy EU bonds, EU bonds went up, and EU banks
could breathe a sigh of relief… for a while.
But anyone with a
modicum of common sense can look at this situation and say, “but wait,
nothing was actually fixed, all that happened was Draghi promised something and
the markets reacted.”
PRECISELY. And that is what Cyprus just
proved: that the ENTIRE EU “fix” was a huge lie. Nothing changed. Nothing was
fixed. The banks are still leveraged at 26 to 1 and sitting on loads of garbage
debts. And the EU countries are all still totally bankrupt.
So what happens when
EU bonds start rolling over again… and what happens when EU banks start seeing
their asset prices falling… falling… falling to -4% or even more?
SYSTEMIC FAILURE IN
EUROPE.
If you are not
prepared for this…YOU NEED TO ACT NOW.
We have released a
number of Special Reports outlining precisely how to prepare for all of this.
The single most
important one is called “The C Word: the Dark Secret the Fed Wants Hidden” and
it explains in stark detail how Europe can bring about systemic collapse… WHY
the Fed is terrified about Europe and is secretly pumping HUNDREDS OF BILLIONS
of Dollars into the European banking system (QE 3 and QE 4 were European
bank bailouts).
We also have three
reports titled Protect Your Family, Protect Your Savings, and
Protect Your Portfolio and they outline:
1) how to prepare
for bank holidays (just like the one in Cyprus today)
2) which banks to
avoid
3) how much bullion
to own
4) how much cash is
needed to get through systemic crises
5) how much food to
stockpile, what kind to get, and where to get it
And more…
Collectively, these
reports are worth nearly $900. But you can get all of them for FREE with a
subscription to my Private Wealth Advisory newsletter.
To pick up your own
copies of these reports., all you need to do is take out a subscription to my Private Wealth
Advisory newsletter.
You’ll immediate be
given access to the Private
Wealth Advisory archives, including my Protect Your Family, Protect Your
Savings, and Protect Your Portfolio reports.
You’ll also join my
private client list in receive my bi-weekly market commentaries as well as my
real time investment alerts, telling you exactly when to buy and sell an
investment and what prices to pay.
So you get my hard
hitting market insights, actionable investment recommendations, and real time
trade alerts, for one full year, for just $299.99.
To take out an
annual subscription to Private
Wealth Advisory now and start taking steps to insure your loved ones and personal
finances move through the coming storm safely…’
Best Regards,
Graham Summers