By Bob Chapman
TheInternationalForecaster.com

Debt repayment is a subject few want to discuss, or that few understand. We know most of the largest banks in the world are broke along with at least 6-euro zone nations. There are many others, but the most concerning are the debts of major nations, which are supposedly solvent. Needless to say the US is deeply indebted and the Super-Congress Enabling Committee couldn’t even lay politics aside to cut spending increases.

A bill has been entered into Congress to prohibit US funds being used via the IMF to bail out European banks and governments. We see a scant chance of passage because of the elitist control of both Houses. On the other hand it makes little difference, because the Fed has opened the swap floodgates and other avenues of secret funding to “recapitalize,” bailout, European banks of all sizes and depths of default.

As we end 2011 it is all quiet on the Western Front. Behind the scenes unbeknownst to almost all the elitists are plotting and planning on how to extricate themselves from the morass they have gotten themselves into. How do they put the crisis on the back burner and extend the timeline? The vaunted 6 nations on the edge of default await aid, but one might ask from whom? That solution hasn’t even been sorted out as yet, and we now find France facing a possible two level lowering of debt ratings, but even Germany is not as solvent as they were thought to be. Could it be that France and Germany might not be able to repay their debts? Now you can understand why the money machine, known as the Fed, says nothing about their bailout of Europe. 95% of the population of the world doesn’t even know what a swap is. Even if they did understand they are never going to get the truth from the Fed. We saw that in court and GAO revelations recently.

The European Central Bank, ECB, does not have the Fed’s ability to continue to create money and credit. That means that the taxpayers in each nation must foot the bill, unless the Fed prints money for them. Thus, we see a central bank, which really is not a central bank. Germany is still not allowing the ECB to emulate the Bank of England and Federal Reserve. Germans still vividly remember the Weimar Republic and the resultant rise of National Socialism and Adolph Hitler. Even if such possibilities do not exist today they still see rampant inflation as a result of endless funding. Northern Europeans, in spite of participating in the EU and the euro zone, understand the frailties and cultural differences of their neighbors in the south. Europe has pursed the wrong path for more than two years. There simply isn’t anyway to bail out the six. They have to allow them to default and leave the euro.

The short-term cost is $6 trillion just to go sideways for a year or two. After that the underlying problem will still exist, and it will be worse. Professionals in part recognize the problems and as a result interest rates have risen and the entire European system is under pressure, including their stock markets. We know that “The President’s Working Group on Financial Markets” has been active in markets worldwide, but because it is secret, we do no know the extent of market manipulation in keeping world markets up when they should be down. When Ron Paul becomes President of the United States and the reign of the bankers ends we will then be able to see what these criminals have been up too. A good part of the world is headed into recession and depression. Europe’s plunge into recession is underway and that condition is just going to exacerbate the situation. What we have is a European standoff and the possibility that Germany may go its own way, becomes more plausible with every passing day.

They could leave the euro, let the six nations go under and take their losses and leave the EU as well. Remember, Germany overwhelmingly did not want either but were forced into the situation or order to regain Western Germany. The cost of that effort was outrageous. They were forced to exchange a Deutschmark for a Reich mark, one-for-one. It should be between 30 to 1. Germany is sick and tired of getting the short end of the stick and we believe 65% or more of the German people want out and that may very well happen though few see that possibility. The recent exchange with the British over City of London taxation could well have been a ruse to expedite the German exit from the euro and the EU. This is why we are always thinking outside the box.

In order to circumvent the rules the elitists have formed and funded a new bailout program via the IMF, something the IMF was not created for. That is to bail out Europe. Bailing out singular nations is one thing, but bailing out a whole continent is another. What we should say is the job of the IMF was and is to bailing out countries, so they can pay the interest on their debt to keep the banks solvent.

The big ultimate question is, who will bail out the US? The answer is no one and that is why ultimately there will be a meeting of all nations, which will revalue and devalue all currencies against one another and have a multinational default and debt settlement. That means everyone gets to pay some of the losses, except of course those who own gold and silver related assets. All the elitists know that they can monetize money and credit only for so long before hyperinflation takes place. Thus, there will be an end game.

We will never know whether several weeks ago the German bond auction was for real. Did the government only sell half its bond auction or was it a ruse? From a logical point of view it was a disaster, but everything is not always the way it seems to be. If it were bona fide it would have been an effort to try to force Germany into quantitative easing.

There is no question that the creation of money and credit known as QE has been instrumental in the monetization of debt that has then caused inflation. Professionals and investors are fortunately catching on, but they have no clue how bad this really is and is going to be.

Students of economic history, whether Keynesian or Austrian, knows there is no way of avoiding the collapse of an unlimited credit expansion. The only solution is abandonment of the expansion of money and credit and a purging of the excesses of malinvestment in the system. As we have pointed out regularly over time the elitists who control the world-banking establishment are not going to let that happen if they can help it. They control most governments and as a results most militaries. That is why internment camps have been set up across America to incarcerate Americans as terrorists who disagree with government or more nearly disagree with the elitists. It is a fact that military that are completing their tours are being offered placement at FEMA camps, TSA and other secret operations. Blackwater professionals are now as well being offered positions as well. The internment of average American citizens without charges, who may never be seen again, tortured and murdered on orders from our President will go into action in just two weeks. Our Senators and House representatives voted these conditions for you two weeks ago, overwhelmingly. Needless to say, the yes votes should be thrown out of office. This is the sad state we have come to as we predicted in the early 1960s.

The Illuminists who are attempting to implement world government are not without greed and they push the Keynesian system by creating ever-larger amounts of money and credit that they can profit from. That we have seen for years and today it is totally manifest in the US and world economies. This extension of money and credit allows these malefactors to stay in power and to control our lives by dictatorial power and internment, torture and death if necessary. In addition, the system of taxation, which drains off almost half the profits of industry and individuals, goes into non-production, but more importantly into the hands of politicians, who are directly controlled by elitists, who then use those funds to control the masses.

This game has been going on for centuries, but most citizens wouldn’t know it, because they know little or nothing of history, including many writers We are again in this condition because few wanted to pay attention or were uninterested because they were uninterested or took their freedom and liberty for granted. Those in power know the public will act when it is too late. They will become concerned but never enough to implement real austerity. The public wants to feel no pain, so they demand more money printing taking the easy way out. Keynesianism is a giant corporate fascist welfare system where those at the top continually loot those at the middle and bottom. We have some 40 million people on food stamps.

What does that tell you? The system cannot now function without government handouts. The same is true of Medicaid and extended unemployment and many other government programs. When these programs are ended and they will be ended, people will be totally dependent on government and will do whatever they are told to do. It is time for citizens of America, Britain and Europe to wake up and take your governments back. Doesn’t the setting up of internment camps and staffing them tell you something? All you have to do is open your mouth and off you go to the slammer. Your President is dancing you around with the same promises you heard three years ago. When are Americans going to smarten up? The first victims of internment will be Muslims. Then after the November elections they’ll concentrate on those who are outspoken and militia types. Then they’ll come after us, and other writers and communicators.

The only way we can legally stop these criminals is to elect Ron Paul president and those that think the way he does and understand the problems. If you do not do that we are all doomed. There will be no way back except via revolution and you don’t want to experience that.

In preparation each family should have dehydrated and freeze-dried food, a water filter and a method of protecting their families. All of their residual funds for investment should be in gold and silver shares, coins and bullion. The percentages depend on what is suitable for you. Remember, that with each passing day your dollar or your currency buys less and less. These are long-term investments so treat them as such. Governments and those who control them, bankers, are trying to relieve you of your last penny and at the same time render you dependent. The only way you can preserve your wealth is via gold and silver related assets.

What observers seem to miss is that the leverage in US banks, some 8,100, is about 13 to one. That includes the major banks, which are about 40 to one. In Europe the overall leverage is 25 to 1, which is dangerous territory, because a drop of 4% in asset values will dissipate their total capita. Generally speaking debt as a percentage of GDP for financial institutions in Europe is more than 100 to one and close to 148% to one. These numbers are outrageous and demonstrate how vulnerable the entire financial structure of Europe really is. There is more debt than GDP.

The catalyst to tip Europe over the edge is probably going to be Greece once they have an election and default. In the meantime French, Irish, German, Spanish and Italian banks have to roll over 1/3rd to ½ of their debt. This is going to be a staggering refunding considering Germany could not recently sell half of its Treasury bonds. 2012 will be very eventful, as 8 major European countries have to roll 19% of their entire debt on average. These numbers do not include unfunded liabilities. European countries cannot raise this kind of money and so we expect to see perhaps as many as six countries leave the euro, and the euro zone just may be history. In fact in chain reaction all Europe could financially collapse. For those of you who do not know it, China is Europe’s biggest trading partners and the US accounts for 21% of its exports with Europe. If this happens, and it probably will, the economies of Europe, China and the US will be in freefall.

As we predicted when the euro was $1.38 we said it could easily fall to $1.18 and then to one to one. We could see higher interest rates, lower sovereign ratings for France and maybe even Germany. We could easily see the euros value back at 199 levels. There is not only tremendous stress on the financial system, but also on the physical economies. The disease is not being treated. In addition, interest rates are rising and that presents a whole new set of problems.