From the Introduction
The intended title of my third book was The Shadow Money-Lenders and the 9-11 Money Machine. I wanted to expose the Global Shadow Money-Lenders and how they exploited the events of 9-11 that enabled them to control global banking and finance in a manner beyond their wildest dreams.
However, events in December 2006 prevented me from embarking on the research as it was apparent then that the global banking system and the shadow money-lenders’ agenda were fast collapsing.
I abandoned my efforts to write my third book and devoted all my efforts to collecting and collating data, scanning the latest news reports, downloading financial newsletters etc. so as to be up to speed on the fast unfolding events, and to come up with timely analysis and forecast. The contents of this book will show that I was way ahead of the curve, and time and again proven right in my conclusions.
The main message in this book is blunt and direct. And I offer no apologies. The modern banking system has collapsed. This has triggered a Financial Tsunami. The consequences will be ugly. For those Americans who are now living in tents as a result of foreclosures by banks, they need no further convincing. However, if you are still indulging in intellectual masturbation, you deserve to be wiped out.
It can be said without any fear of contradiction that people acquainted with global finances are familiar with the names of the major global banks and investment houses such as Goldman Sachs, J.P. Morgan Chase, Merrill Lynch, Bear Stearns, Citi Group, Morgan Stanley, the Rothschild Bank, Bank of America, Deutsche Bank, HSBC, Barclays Bank, UBS etc.
But few would be aware of the organization set up by the above-named banks to organise and manage the Shadow Money-Lending System. I give you the name of this organization. It is: I.S.D.A International Swap & Derivatives Association. ISDA is the organization that spawned the US$500 trillion3 global derivatives market. This is the organization that designed and manufactured most, if not all the derivative products – the financial WMDs.
For those who have not read my book, Future Fast-Forward, I append below the critical passage regarding the danger of derivatives.
“Gambling on Derivatives — Financial Tsunami
Warren Buffet, the world’s greatest stock market investor, known as the ‘Sage of Omaha’, in his Chairman’s Letter in the Berkshire Hathaway 2002 Annual Report, said: “We view them as time bombs both for the parties that deal in them and the economic system. In our view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.”
As far back as 1990, Sir Julian Hodge in a memo dated November of that year to senior executives of the Julian Hodge Bank said: “In no circumstances enter the derivatives trading market without first agreeing to it in writing with me . . . At some time in the future, it could bring the world’s financial system to its knee.”
We need only to recall the fear and panic caused by the collapse of the hedge fund LTCM whose principal shareholders were Prof. Robert C. Merton of Harvard University and Prof. Myron S. Scholes, who shared the Nobel Prize in Economics for ground-breaking research in determining the value of derivatives. The Federal Reserve had to intervene and rescue the fund at a cost of US$3.5 billion as it was feared that its collapse would cause a meltdown of the world’s financial system.
The QCC Bank Derivatives Report for the 3rd quarter of 2004 reported that the notional value of derivatives held by U.S. banks rose to a record US$84.2 trillion, from US$81 trillion in the 2nd quarter. This is mind-boggling! The report stated that derivatives volumes continued to be dominated by interest-rate contracts, which grew US$2.4 trillion during the quarter to US$73 trillion or 87% of the total derivatives volumes. Foreign exchange contracts rose US$163 billion during the same period to US$7.9 trillion or 9% of the total. The remaining 4% was made up of equity, commodity and credit derivatives. The banks’ total risk exposure through these financial instruments rose to US$804 billion, up from the previous quarter of US$752 billion.
It should be noted that as at December 31, 2003, the top 25 U.S. commercial banks and trust companies accounted for 95.5% of total derivatives traded. They are as follows:
1) JPMorgan Chase $ 36.8 trillion What is of concern is that the top three banks have exposures far in excess of their assets. The statistics in the QCC report is alarming. In the case of JPMorgan Chase, while exposure is US$36 trillion, assets are only US$628 billion which works out to approximately US$58 of derivatives per dollar of asset. Credit exposure to Risk Based Capital Ratio is approximately 844%. Bank of America’s exposure is US$14.8 trillion while assets are US$617 billion, the ratio being approximately US$24 of derivatives per dollar of asset. Credit exposure to Risk Based Capital Ratio is approximately 221%. And in the case of Citibank, exposure is US$11.1 trillion while assets are US$582 billion, the ratio being approximately US$19 of derivatives per dollar of asset. Credit exposure to Risk Based Capital Ratio is approximately 96% ...
2) Bank of America NA $ 14.8 trillion
3) Citibank $ 11.1 trillion
4) Wachovia Bank National Assn $ 2.3 trillion
5) HSBC Bank USA $ 1.3 trillion
6) Bank One National Assn $ 1.2 trillion
7) Bank of New York $ 561 billion
8) Wells Fargo Bank $ 557 billion
9) Fleet National Bank $ 443 billion
10) State Street Bank & Trust Co $ 369 billion
11) National City Bank $ 252 billion
12) National City Bank of In $ 133 billion
13) Keybank National Assn $ 91 billion
14) Mellon Bank National Assn $ 88 billion
15) Standard Federal Bank NA $ 78 billion
16) Suntrust Bank $ 77 billion
17) La Salle Bank National Assn $ 70 billion
18) PNC Bank National Assn $ 48 billion
19) Deutsche Bank TR Co Americas $ 46 billion
20) US Bank National Assn $ 43 billion
21) Merrill Lynch Bank USA $ 35 billion
22) Capital One Bank $ 28 billion
23) Northern Trust Co $ 26 billion
24) Irwin Union Bank & Trust Co $ 19 billion
25) Union Bank of California NA $ 19 billion*
* All figures have been rounded up to nearest billion.