If you thought that the collapse of FTX was something, just wait until the entire global financial system comes crashing down all around us. Most people just assume that the system is being managed by rational people that behave in rational ways, but of course countless investors assumed the same things about FTX. Sadly, the global financial system has slowly but surely been transformed into the largest casino in the history of the world. It is a colossal Ponzi scheme, and once in a while authorities give us a little peek into what is really going on behind the curtain.
For example, this week the Bank for International Settlements released a report that warned that 65 trillion dollars in “hidden” currency derivatives could potentially be a major threat to the stability of the entire system…
There’s a hidden risk to the global financial system embedded in the $65 trillion of dollar debt being held by non-US institutions via currency derivatives, according to the Bank for International Settlements.
In a paper with the title “huge, missing and growing,” the BIS said a lack of information is making it harder for policy makers to anticipate the next financial crisis. In particular, they raised concern with the fact that the debt is going unrecorded on balance sheets because of accounting conventions on how to track derivative positions.
Last year, the total value of all goods and services produced in the entire world was just 96 trillion dollars.
So we are talking about an amount of money that is almost unimaginable.
Everything will be okay as long as financial conditions remain relatively stable.
But BIS analysts warn that “the next time dollar funding liquidity is squeezed” we could have an enormous crisis on our hands…
“Off-balance-sheet dollar debt may remain out of sight and out of mind—but only until the next time dollar funding liquidity is squeezed,” the analysts write. “Then, the hidden leverage in pension funds and insurance companies’ portfolios . . . could pose a policy challenge.”
So let’s hope that such a scenario does not materialize any time soon.
According to the BIS report, banks outside the U.S. are particularly vulnerable…
For researchers at the BIS, it’s the sheer scale of the swaps that’s worrying. They estimate that banks headquartered outside the US carry $39 trillion of this debt — more than double their on-balance sheet obligations and ten times their capital. Accounting conventions only require derivatives to be booked on a net basis, so the full extent of the cash involved isn’t recorded on a balance sheet.
“There is a staggering volume of off-balance sheet dollar debt that is partly hidden, and FX risk settlement remains stubbornly high,” said Borio, head of the monetary and economic department at the BIS.
When this thing finally implodes, there isn’t going to be enough money in the entire world to fix it all.
But don’t worry.
The “experts” are telling us that everything is fine.
Meanwhile, more of our largest corporations are planning layoffs. According to the Wall Street Journal, this even includes PepsiCo…
PepsiCo is reported laying off headquarter workers, The Wall Street Journal reports.
A person familiar with the matter told the Journal that hundreds of jobs are being cut in the head office of the North American snacks and beverages divisions.
Employees in Purchase, N.Y., Chicago, Ill. and Plano, Tex. are said to be impacted.
I thought that PepsiCo was doing well.
I guess not.
But don’t worry.
The “experts” are telling us that everything is fine.
This week some of the biggest names in the mainstream media have also announced layoffs…
Hundreds of media industry staffers were laid off this week during a brutal period that saw Warner Bros. Discovery, Gannett and others slash headcount as economic uncertainty plagues news organizations.
Gannett, a newspaper juggernaut that owns dozens of local media outlets along with USA Today, began its latest round of layoffs on Thursday. The cost-cutting effort impacted roughly 6% of the company’s news workforce of about 3,440 employees.
I can’t remember ever seeing such a wave of layoffs at our largest media companies.
But don’t worry.
The “experts” are telling us that everything is fine.
Of course the truth is that everything is not fine.
Economic conditions are deteriorating all around us, and the ripple effects are being felt everywhere.
According to Fox Business, even Las Vegas is feeling the pain…
Inflation is taking its toll on Sin City as fewer tourists are visiting the gambling Mecca, and those who do spend less than usual, according to a new report.
The University of Las Vegas business school released a report forecasting the city’s economic outlook between 2022 and 2024 and noted that its economy turned grim in June of this year, according to Fox 5.
“Interest rates have gone up. And we know that we know that prices are going up as well. And that’s what the Fed is trying to get their hands around and solve. So it may be that the Fed’s policies is having an effect not only nationally, but it’s also affecting our economy locally,” one of the study’s authors, Professor Stephen Miller, told the outlet.
2008 and 2009 were incredibly difficult years for Las Vegas.
Now those that run businesses in Sin City are bracing for another extended downturn.
In all my years of writing, I have never been more concerned about the short-term economic outlook them I am right now. It is very likely that 2023 will be a really hard year for the U.S. economy, and of course this comes at a time when the entire globe is being hit by crisis after crisis.
For ages we have been warned that a day of reckoning would eventually be coming, and now it appears that day of reckoning has already arrived.
There is certainly nothing wrong with hoping for the best. But there is also wisdom in getting prepared for the worst.
***It is finally here! Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.***
About the Author: My name is Michael and my brand new book entitled “End Times” is now available on Amazon.com. In addition to my new book I have written six other books that are available on Amazon.com including “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”. (#CommissionsEarned) When you purchase any of these books you help to support the work that I am doing, and one way that you can really help is by sending copies as gifts to family and friends. Time is short, and I need help getting these warnings into the hands of as many people as possible.
I have published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.
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Article cross-posted from The Economic Collapse Blog.
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
I am 77 years old. I have been waiting for this greedy insane system to fail ever since I was 25 years old. What? It’s over 50 years and it has taken this long to fail. Sorry, I don’t buy it. The dishonesty and corruption is at an all time high and though we have a bit of friction I still don’t see any sparks. It’ll probably take another 50 years to finally hit the side of the mountain. This is just an old buzzards opinion …