In this series we’ll take a good look at the background underpinning markets: opponent modeling, psychopathology, probabilities and risk transfers. All the things that do not matter in the REAL WORLD where we (hopefully) have a caring family, friends who love & respect each other.

Some of this heavy stuff will be presented as lightweight stories.

  • hfondOPMEnglish
    1·
    6 months ago

    PART II - Financial Risk Transfer

    The Big Pot: Exit Scams, Bust-outs And Monetary “Reforms”

    Bankruptcy Fraud is defined as: :

    The act of falsifying information when filing for bankruptcy. It may also take the form of filing for bankruptcy to deceive creditors.

    States are debtors. But who are the creditors of states? Well, you and me (bonds and taxes, many small amounts, future generations pledged as collateral) and some realy big players. It is these big players who dictate to the state on how to restructure things to bring in their loans plus interest.

    So, what happens when a state declares bankruptcy? As always, creditors line up. You guessed it, mom and pop are last. Moreover the people are made to compensate the big players in the future as part of the insolvency procedure. The people loose twice: first bonds (which are loans to the state) are declared worthless, stocks are treated as collateral for derivatives gamblers — that is mom, pop and other adversaries get nothing. Second there will be a special tax in the future, i.e. in the form of mandatory mortgages, to refund big creditors.

    If you think “well, that happens to shithole countries, but never to the US” you are, in fact, correct. Central banks form a hierarchy and on top of the pyramid resides the Dallor as global reserve currency. The Dallor may not fail — or we are fucked. Rest assured the 800 military bases will protect it, to keep competitors in check and discipline debtors as needed.

    The US govt feels little pressure to pay back any debt, because it’s bonds are in high demand wordwide as collateral for smaller central banks further down the pyramide. That is, the US govt can roll over old bonds and issue new ones. A shithole country does not have this option. [1]

    Not all debts are created equal: some have interest rates below inflation and payback may not be enforced. These are net winners. Others are net loosers. As in every casino money is shifted from loosers to winners with some going to the house.

    Seniorage: the real inflation of the US Dallor is always HIGHER than the average yield on US govt bonds. That’s a nice EDGE the US enjoys in this global casino. Any country who wants to leave the casino will face consequences. Most countries can not pay back its govt debt anyway. [2]

    The lower in the financial pyramide the higher the pressure to pay back debt. This comes natural because shithole countries carry higher risks for creditors.

    So, where is the FRAUD in all this?

    When an individual is engaged in a bust-out scheme, he or she will apply for as much credit as possible and then fail to pay on any of the accounts. - - - This is the case with monetary reforms.

    Monetary reforms happen regularily around the world, but are not talked much about in history books. However, legal procedures are in place indicating that the day of the great reset is pre-planed in every fiat system we know of. It’s called EXIT SCAM in crypto. In fiat terms it’s called redenomination.

    Technically the monetary system as a whole is designed in such a way, that it is bancrupt by default: in the global balance sheet the sum of debits is always GREATER than the sum of credits. Thats because interest on positive balances is less than interest on negative balances on average. In other words, positives and negatives don’t cancel each other out — it is impossible to pay back all debt (AT ONCE).

    Practically this is NOT a problem when the speed of circulation is right and the economy grows AND we’d want to continue ad infenitum with this non-sense. That is not the point, although the result is a game of musical chairs (defaults built-in). The FRAUD is in the concealment of information from small creditors — mom and pop, you and me.

    Money inevitably flows from the bottom of the pyramid to the top. That’s a design choice not the fault of “lazy” populations. By lying by omission small creditors can not make informed decisions about the risk they are taking when participating in the credit arrangement called “tax payments”. That IS FRAUD. Risk is transferred to people who are kept in the dark about the very fact that they are pledged as collateral for a very corrupt system.

    So in sum, the public is called upon to bail out players who are too big to fail — that is the hypothesis that is is better to continue a totally corrupt system than to let it fail.

    It is no coincident that the following headline from The Times on 2009-01-09 is quoted in the genesis block of a well known project:

    “Chancellor on brink of second bailout for banks”

    Bailouts mean “Moral Hazard” in financial terms. That is the EXPECTATION OF BEING BAILED OUT is factored in by big players engaged in risky bets in the global derivatives casino — this is financial risk transfer to the general public and it transforms to that edge big players have in the game.

    State bankruptcies are unavoidable from time to time, as states play a game of musical chairs and the public will pay up — that is financial risk transfer, too. Private owners of central banks a guaranteed the HOUSE EDGE.

    It’s a CON GAME and you don’t learn at school how it works. And that’s lying by ommision because you HAVE A RIGHT TO BE INFORMED. After all you will pay up.

    DO YOU?

    [1] Problems arise when the wordwide demand for US bonds decreases. China became a net SELLER of US bonds. A similar dynamic arisis in corporate bonds, when the issuer is too big to fail.

    [2] which is a precondition to sovereignty, of course. Do not even dream of debt forgiveness.