Zerohedge: SYSTEMIC RISK IS ON RED ALERT

www.zerohedge.com...

The situation

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The only thing that has maintained investor confidence since the depths of 2009 is the belief that the central banks can continue to bailout/ intervene to control any financial problem.

Remember, we never actually “took the hit” we needed to take in 2008. The same junk debt remains in the system (it’s just been hidden by loosened accounting standards). The same enormous derivatives time bomb is still ticking (it’s over $600 TRILLION in size).

None of these problems were solved. None were even addressed. All the central banks did was lend more money to the insolvent big banks. Well, that and damage their sovereign balance sheets by taking on a ton of garbage debt (the Fed’s balance sheet is now over $2.8 TRILLION in size).

So in plain terms, the central banks took systemic risk that existed in the private sector and allowed it to spread to the public sector.
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The result

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This IS coming to the US. And it won’t be long. Once the bailout wagon stops (first in Greece) the ensuing collapse will spread VERY quickly. The reason is quite simple: Greece is the Bear Stearns of the Sovereign debt Collapse.

So buckle up, because it was only six months or so after Bear Stearns that the Lehman disaster unfolded. Given the amount of leverage in the system today, we could easily see the issues hitting Greece today arriving at the US’s shores before the year’s end.
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A mob of Americans tends to be less civil than a mob of Greeks.

reply to post by Dbriefed

A mob of Americans tends to be less civil than a mob of Greeks.

There's nothing civil about being stolen from or pinned in a cage. The American populace knows how to fight the good fight... Strategic or brute force doesn't matter. We're armed to the hilt plus we've already been forced to go this route before. Kingdoms and Castles tend to end with us regardless of how long they've been built up.

I was going to post this article earlier but decided not to because the author is using rhetoric to sell his "Free" report which will be an inviitation to purchase his wham bam investing advice. The article in and of itself is interesting though.

As for America, the way I see it, there will be austerity coming but the politicians there are prepping the people with almost a science in social and psychological manipulation. Now I do not have any proof of this whatsoever and it is speculation. But the political theater we see over budget cuts and debt ceiling is incredible, and people are increasingly (how do I explain this?) becoming receptive to austerity, all the while big banks, corps, foreign aid and the war machine be protected.