What precipitated the financial crisis that still affects the world was a severe cash shortage on the part of the major banks. This article will try to shed some light on what actually happened, as opposed to what the mainstream media is telling us.

The lending frenzy of recent years culminated in large sums of money being loaned by banks and mortgages to people who were hopeless and had no chance of repaying the money. Part of the reason they did this may be due to political pressure from politicians who saw this as an opportunity to increase their own popularity with voters at the bottom and outside.

Another reason may be that the original lenders made some initial profit on each deal and then sold the toxic debts as part of a “bundle” of debts that included some that were not so toxic. They sold them to all kinds of financial institutions, including foreign banks, hedge funds, and pension funds. Therefore, the scandal could continue for much longer than if the original lenders had to deal with the toxic nature of the loans and face the consequences.

Due to this mix of thousands upon thousands of mortgage accounts, the fact that the vast majority of them were falling further and further behind on monthly payments was missed as the focus was maintained on the perceived value of each bespoke package. that was traded from one. financial institution to another.

By the time the extent and severity of the problem became apparent, it was too late. Finance houses and banks had continued to lend their play money, based on the assumed value of these supposed assets, and thus made the problem worse ten or twenty times. Don’t forget that Merrill Lynch has slowed its total capital base in toxic loans more than 30 times. That doesn’t count the loans that weren’t toxic. This was undoubtedly because the more loan packages they bought, somehow the greater their capital base and the more they could continue to lend. “Every loan creates a deposit”, right?

Thus, it was only a matter of time before the inverted pyramid collapsed. When it did, the problem was global. But it was not just the United States that had slow-to-delinquent debtors. The same had been happening in the UK and many other Western countries (although it’s nice to be able to blame the “subprime market in America” ​​for the crisis). As we all know by now, the entire international banking system had to be bailed out with loans and acquisitions totaling at least $ 1 trillion ($ 750 billion in the US and $ 250 billion in the UK alone). .

Has this ransom helped people get their repossessed homes back? Has it helped eliminate the threat of recovery for millions of families? Obviously not. In the UK, half a million families face the threat of being evicted from their homes at the rate of 120 a day. Given that home prices will fall from their peak of 20 percent in December 2009, this means that the majority of foreclosed homes will be sold by the mortgagee at a loss. The rescue package is to ensure that these banks can claim the deficit from the government, that is, from the taxpayer.

So ordinary people have to pay for the greed and stupidity of the banks by putting their jobs and businesses on the line, their home in danger of being taken away, and having to pay higher taxes to protect the banks’ profits.

That’s about where all this extra money is going to go. But there is another question that must be answered: where did all this extra money come from?

The controlled media will simply tell us that it comes from the taxpayer, or even future generations of taxpayers. In a way, they’re here, as present and future taxpayers will certainly pay for all this craziness, but that answer doesn’t address the actual mechanics of how money is created in the first place.

Saying it was created by government loans is only half the story. Who is the government borrowing this money from? From your central bank, the Federal Reserve or the Bank of England, or the central bank of the country in question, or the international money market. So who is lending this money? Did it exist before this crisis? Where was it kept? How long has it been around?

That’s where the whole racket falls. Money is created out of thin air by the international banking system and is slow for governments to lend it to banks. It is certainly a new twist on the old system. And it gives even more power to the dark figures, the “Superclass”, who pull the levers of world politics and decide the fate of millions.