The Debt Deception

I think it must be scandal fatigue at this point.

First it was the housing scandal that almost collapsed the entire global economy and from which we have yet to recover.

Then it was revealed that the same banks that caused that scandal – and were bailed out by all of us – doubled down in the obscure interest rate swap market. This LIBOR scandal was reported but outside the financial community and the geeks that follow it, it didn't make much noise.

So, here's the deal. LIBOR is a $379 trillion market. That's nearly 100 times bigger than the US economy. It has to do with virtually every interest rate on the planet. That means every loan, credit card and national debt on the planet is part of this scandal. But it's such 'inside pool' that most people don't grasp how massive this scandal has been. Or its long-term implications.

Then there's the admission that the gold markets have been manipulated.

And the silver markets.

And auto loans.

By whom? That's the most galling part. It's the same too big to fail players behind all these crooked schemes.

And the US government continues to allow them to get away with it. And individuals are ignorantly happy to keep their shoulder to the grindstone flashing the plastic for the newest iPhone.

At this point, the institutions that we couldn't let fail are now more powerful than ever. As Matt Taibi reports in an excellent article on the LIBOR scandal for Rolling Stone, the top 6 US banks now hold assets equivalent to 60% of the US GDP.

These are true robber barons in every sense of the words.

But it's what is below these scandals that is even more significant.

Most of us rarely stop to take in The Big Picture as it relates to the global financial picture. But the big financial institutions think about it every day, because they are building it.

And if we're not saying anything, they're going to continue to build it to their advantage.

It would be like hiring a contractor to build you a house. You trust the contractor will hire skilled labor, use quality materials and build it all to code. But the contractor is connected to the inspectors, gets kickbacks from his material suppliers and knows he can do sub-standard work with sub-standard materials and make a killing. You don't watch over him and after the house starts to fall apart the court tells you it's your fault for trusting the contractor.

This is where we are with the global financial system.

Much of the developed world is now not built on money – fiat currency, metals, bitcoin, wampum – it's built on debt. This infographic may help get your mind around what I'm talking about.

But here's the point:

There's about $15 trillion in the broadly defined currency markets of the world.

There's about $200 trillion of debt in the world markets.

And there's about $630 trillion of derivatives on that debt.

Cash is no longer king. Debt is. And the same people that control this $830 trillion in debt and derivatives are also fixing the interest rates.

There are few things that can help get you outside this massive financial tsunami. Go off the grid and wait. But it could take years more of manipulation, collusion and distortion before something big changes everything.

That's why it's increasingly important to stay informed and engaged in the big and the small issues. Become an economic survivalist. Learn the terrain, how to defend what you have and rely on your own training and discipline to thrive.

We're here to help get you there. And as the saying goes, the journey of 1000 miles begins with one step. Let's get moving.