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Your Nightmare Scenario Is Too Mild

Written by Gary North on November 29, 2011

Karl Denninger sometimes writes some choice stuff. He follows the capital markets. He thinks the endgame scenario in Europe marks the beginning of the end. I’m not equally sure. The New World Order brigade has a lot of inflating to do between now and the end of the inflationary road.

Denninger’s summary of the welfare state’s endgame is on target.

Reality must eventually be faced.  That day is here for Europe and it will soon be here in the US.  We have permitted the lies and stealing — both indirectly and now, as we’ve seen, it appears directly through MF Global — to go on for too long.

To those Seniors (and soon-to-be-Seniors) and others who say “but we were promised!” and “I vote damnit – you better give me what you said I’d get” respond: The till is empty and your check is going to bounce.

Occupy Wall Street?  Well sure, but while you’re at it, why aren’t the Seniors encircling the Capitol and refusing to leave?  Why isn’t the underlying truth being discussed and why aren’t the jackals that led to this happening being forced from office and run out of town on a rail?

I’ll tell you why: Because everyone thinks that they can manage to somehow “get theirs” while “someone else” will take the hit.

I’m sorry to tell ou that it isn’t going to work out like that.

When the financial system goes, there will be bounced checks for everyone. This is why the insiders will do whatever it takes to keep the system going. He does not think it can be kept going much longer. I wish he were right, but I don’t think he is. But in the final scenario, this will be what happens to those who trust the system.

It will not be long ladies and gentlemen, when the bulk of the folks running the algorithms deduce that they’re exposed to the same risks – they have to post margin too, you know, and if it can be stolen then their capital isn’t safe either.  These deposits aren’t supposed to be “at risk” when there’s no position actively open — that’s a performance bond against possible failure to pay, but is supposed to be exactly as safe as a bank deposit in a checking account under FDIC limits.

Well, it wasn’t.  The CDS you bought on Greece wasn’t.  And it will only take another event like this or two before people conclude that everything is unsound as the jackals running the game will redefine the meaning of words to suit themselves and, failing that will simply steal the money. . . .

What am I, or anyone else, supposed to do in this sort of “market” environment?  Invest in…. what?  Land titles are worthless as they’ve been corrupted by robosigning, margin deposits have been stolen, Madoff’s clients had confirmations of trades that never happend and proved to worthless pieces of paper instead of valuable securities and while Madoff went to prison nobody else has and the money is still gone!

He is right. The thieves are in cahoots with the government. He is also right about this: “Without enforcement of the law — swift and certain — there is no deterrent against this behavior.” So, the behavior will continue.

His conclusion. “It’s coming folks, and I guarantee you this: Whatever your “nightmare” scenario is for such an event, it’s not bearish enough.”

I think the game has more time than he does. It has gone on a long time. But for those who trust the system, the day of reckoning will come.

To see what he thinks is coming next, click the link.

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