Submitted by Bill Holter:
Kyle Bass claims to have purchased $500 billion worth of Japanese debt protection for 1 basis point (which if my math is correct cost him $5 million). Presumably he is not the only one that this bank sold the “protection” to. Is there any bank anywhere on the planet that could come up with that type of cash today?
Let me put this in just a little perspective for you. $500 billion, doesn’t sound like much the way “billions” are thrown around like confetti does it? The “admitted” on books accumulated debt of the 237 year history of the U.S. Is $16 trillion…or only 32 times the size of Mr. Bass’s bet! When (not if) Japan fails, who’s going to bail out this little puppy trade (and presumably many more like it)?
5+ years into the Greatest Financial Crisis and what has changed? I could go into how balance sheets have blown out to ridiculous levels, money has been printed to cover up the financial sinkholes and accounting practices exist only at the pleasure of the banks who own the underwater assets, I won’t do that today. Zerohedge put a piece out yesterday of a presentation by Kyle Bass, in which he said that “banks” (financial sorcerers) were offering Japanese “risk protection” for 1 basis point. He claims to have purchased $500 billion worth for this 1 basis point (which if my math is correct cost him $5 million). Now there is some “leverage” huh?!
THIS is our banking system. THIS WAS our banking system back in 2008. The banking system is a broke, untenable Ponzi scheme where it “works” …until it doesn’t. This is also our “currency” or monetary system which is why you must have investments in real money. It is also the reason why I just don’t get it. I don’t understand “why” people got nearly suicidal on this latest pullback in the precious metals. If you can understand that literally $ trillions (actually over $1 quadrillion) of leveraged and unbacked bets, pieces of paper and “digits” on computers have infested and now “represent” the monetary system, then why worry? You possess real money while your bank accounts or Treasury bonds or “money under the mattress” will go the way of the dodo bird. We are living the biggest, grandest most all encompassing Ponzi scheme of all time…”the best move is not to play the game”! Which of course you aren’t if you own Silver or Gold but who cares about the game and “who’s winning” if everyone who plays will end up a loser?
Regards, Bill H.