Scary – Part One – It’s your money at risk!
Starting with the near-collapse of our financial system in 2008, we have all heard about financial institutions that are so “systemically important” that they have been deemed “too big to fail.”
In response to this catastrophe, the politicians brought about the Dodd-Frank Wall Street Reform and Consumer Protection Act which allegedly requires these mega-institutions to have a wind-down plan (orderly liquidation facility) to avoid government bailouts.
What was not widely advertised was the “bail-in” provision that allows a financial institution to use its client’s funds to save itself. Dodd-Frank, it should be noted, was named after two of the most corrupt individuals in Congress, Representative Barney Frank (D-MA), the Chairman of the House Financial Services Committee, and Senator Christopher Dodd, Chairman of the Senate Banking Committee.
“Title II, the Orderly Liquidation provision of the Dodd-Frank Act, provides a process to quickly and efficiently liquidate a large, complex financial company that is close to failing. Title II provides an alternative to bankruptcy, in which the Federal Deposit Insurance Corporation (FDIC) is appointed as a receiver to carry out the liquidation and wind-up of the company. The FDIC is given certain powers as receiver, and a three to five year time frame in which to finish the liquidation process. Title II is aimed at protecting the financial stability of the American economy, forcing shareholders and creditors to bear the losses of the failed financial company, removing management that was responsible for the financial condition of the company, and ensuring that payout to claimants is at least as much as the claimants would have received under a bankruptcy liquidation.” <Source>
If you didn't understand this, YOU, as a depositor or shareholder are a creditor subject to a bail-in! And, even if you do not own stocks or bonds directly, it is likely your mutual fund, pension fund, or insurance company does have shares in these institutions.
Title II provides a claims process to assert claims against a defaulting financial company, and a series of rules to allow for liquidation of assets and the payment of claim holders according to a list of priority payments. See 12 U.S.C. § 5389, 12 U.S.C. § 5390 (Dodd-Frank Act §§ 210(a)(2), 209(b)). Claims are paid in the following order: (1) administrative costs; (2) the government; (3) wages, salaries, or commissions of employees; (4) contributions to employee benefit plans; (5) any other general or senior liability of the company; (6) any junior obligation; (7) salaries of executives and directors of the company; and (8) obligations to shareholders, members, general partners, and other equity holders. See 12 U.S.C. § 5389 (Dodd-Frank Act § 209(b)). <Source>
Scary – Part Two – The Communist Chinese government faces a significant financial crisis that could collapse their system.
Global stock markets plunge as Chinese real estate giant Evergrande teeters on the brink of collapse with debts of more than $300 BILLION and firm threatens top execs with 'severe punishment'
- Evergrande's soaring debt has crushed credit rating, share prices and reputation
- Rumours of chaos prompted bosses to warn of 'severe punishment' for top execs
- Investors are fearing financial bloodbath in China, triggering global sell-offs
- Dow Jones shed 1.7% this morning after London tanked earlier with 1.5% drop
Scary – Part Three – U.S. financial institutions hold significant investments in China, regardless of their rigged legal system and SEC-acknowledged crooked accounting.
See the picture? If the Chinese economy collapses, the United States will take a significant hit as U.S. financial firms – yes, the systemically important” ones covered by Dodd-Frank, begin to unwind their positions. Not only will pensions, insurance claims, bank accounts, and investments be impacted, the effect on the flow of goods and services will also be affected as Chinese vendors to American companies fail, plunging the United States into hyperinflation, among other nasty financial consequences.
Scary – Part Four – The Communist Chinese appear to have a lock on politicians, including President Joe Biden and the lobbyists representing the large financial firms.
The question now becomes, does the Communist Chinese coerce the United States into bailing them out? Possibly, in the same way, the Federal Reserve printed and pumped more money into the banking system at an interest rate, guaranteeing a profit to the banks. The policy was known as “ZIRP,” the “Zero Interest Rate Policy.”
“ZIRP is a method of stimulating growth while keeping interest rates close to zero. Under this policy, the governing central bank can no longer reduce interest rates, rendering conventional monetary policy ineffective. As a result, unconventional monetary policy such as quantitative easing is used to increase the monetary base.” <Source>
Implementing a ZIRP policy is not without substantial bounce-back risks and adverse effects. So one solution may be for the United States to print money that the large financial institutions can loan to Communist Chinese firms to stabilize their economy. Additional trillions added to the U.S. national debt.
The other possibility is that the U.S. will suspend or relax Trump-era tariffs, technically an increased tax on foreign goods imposed on Americans to discourage foreign purchases. This would encourage Americans to purchase more goods from Communist China to the detriment of American business.
Let us not forget that Senate Minority Leader Mitch McConnell's family's fortune is tied up in Communist Chinese shipping. As we as other high-ranking Democrats have investments linked to Communist China.
I do not know what will happen as I am not in the Biden camp where the decisions are made.
However, I do know we are, once again, screwed as President Biden is unlikely to know what is happening and some mid-level jumped-up functionary makes a political call.
“Nullius in verba.”-- take nobody's word for it!
“Beware of false knowledge; it is more dangerous than ignorance.”-- George Bernard Shaw
“Progressive, liberal, Socialist, Marxist, Democratic Socialist -- they are all COMMUNISTS.”
“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS "The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius “A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell “Fere libenter homines id quod volunt credunt." (The people gladly believe what they wish to.) ~Julius Caesar “Describing the problem is quite different from knowing the solution. Except in politics." ~ OCS
“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS
"The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius
“A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell
“Fere libenter homines id quod volunt credunt." (The people gladly believe what they wish to.) ~Julius Caesar
“Describing the problem is quite different from knowing the solution. Except in politics." ~ OCS