QUADRILLIONS OF PROBLEMS: A CONTROLLED DEMOLITION?

Are we witnessing a controlled demolition of the current monetary system, as the United States desperately tries to retain its global power? Lynette Zang, Chief Market Analyst for ITM Trading, thinks so. 

In an interview with Daniella Cambone, Zang referenced the recent note published by Zoltan Pozsar, Global Head of Short-Term Interest Rate Strategy at Credit Suisse, in which he warned the current financial crisis is “not like anything we have seen since President Nixon took the US dollar off gold in 1971 - the end of commodity-based money.”

However, she argued that Pozsar’s warning is something of an understatement, explaining that the current crisis is actually a controlled demolition of the entire system, to pave the way for Central Bank Digital Currencies (CBDCs) and impose unprecedented control over everyone - something I’ve been warning about for a long time.

Are there quadrillions of dollars worth of derivatives out there?

But, the real shock comes in the possible scale of the crisis. Zang explained that, according to her calculations, there are quite literally quadrillions of dollars worth of ‘bets’ live in the current system - far higher than the officially recognized $189.5 trillion worth of derivatives. 

Yep. That’s a lot of leverage in the system! So, how the heck did this sneak up on us? Well, according to Zang, back in 2013, newly introduced accounting systems allowed institutions to ‘compress’ their liabilities. In a nutshell, similar trades were used to offset each other, thus massively minimizing perceived leveraged risk. 

Zang explained that FDIC-insured banks spent over $180 trillion, in a single quarter, to cook the books (my words, not hers). And, that figure must logically represent a saving over the expected costs of the reserves and special fees associated with the actual existing derivatives. Hence, the real dollar value of derivatives in the system is likely in the quadrillions.

Needless to say, when we’re talking quadrillions of dollars of risks and liabilities, no bail-outs or bail-ins are going to stop a systematic collapse!

An attempt to maintain US financial dominance in the face of de-dollarization?

So, is this all part of a grand plan to impose a new monetary and financial system? As I recently explained, the ability of the United States to maintain its privileged status in the world is entirely dependent upon the US dollar being the defacto global reserve currency. This enables it to service its own debt and maintain the most powerful military forces in the world. 

But, the ‘Petrodollar’ system, as it is known, is rapidly crumbling as more and more countries start settling international trades with alternatives - especially the Chinese yuan. Indeed, this process of ‘de-dollarization’ seems to be unfolding faster than most observers thought possible. 

Adding weight to the idea that this process has been expected for some time, Zang pointed out that the system to replace the US dollar on a global scale has already been put in place - namely the IMF’s Substitution Fund. 

This enables countries and corporations to deposit US dollar-denominated assets and convert them to Special Drawing Rights (SDRs) denominated assets. This means those US dollars held internationally can be returned to the US at a controlled rate - something critical to maintaining orderduring the process of transitioning from one system to another.

If Zang is correct, and I tend to think she is, then this entire controlled demolition process has been a long time in the making. But, whether it was put into play in the immediate aftermath of the 2008/2009 Financial Crisis, or was conceived even earlier, is open to debate. 

Whatever the origins of the plan that is unfolding, it all leads to the same place, namely the introduction of a US Central Bank Digital Currency. And, with it, the loss of any remaining financial independence and privacy for individuals and businesses alike. 

Or is something even bigger going on?

Of course, there is one alternative explanation - one that I’ve touched on in my expansion on Christian Köhlert's Cassandra Hypothesis. If that is correct, then the US and certain other governments, have been deliberately cultivating a vast system of smoke and mirrors, to facilitate the covert siphoning of enormous sums of money over several decades. This money has been used to fund the construction of a huge network of underground shelters and stock them, as well as make other preparations for an imminent global catastrophe. 

In my opinion, this is the only logical explanation for how politicians and central bankers of all political affiliations, and across dozens of countries, have quite deliberately driven the world to the edge of a precipice and spent money like there’s no tomorrow.

Check out the full talk between Daniela Cambone and Lynette Zang below: