Five Facts You Need to Know About the Financial System

Let’s connect the dots on the ENTIRE financial system right now.

Fact #1: Banks are Insolvent.

The only reason they’re still in business is because they are permitted to value their balance sheet at whatever price they choose. I could privately value my car at $500 TRILLION, but that doesn’t mean I’ll get that price for it when it comes time to sell.

Ditto for the banks and their garbage saturated balance sheets.

Fact #2: Countries are Insolvent

Europe, a union of broke countries, recently announced it is bailing itself out. This is a bit like your bankrupt friend announcing he is gifting himself $1 million: it DOESN’T SOLVE ANYTHING. As I’ve stated time and again, you CANNOT solve a debt problem by issuing more debt. (more)