Today, our financial system is so broken that casinos have much
more integrity in their business dealings than banks.
Casinos Actually Have More Cash on Hand
The largest casinos in Vegas and Macau have much more cash on
hand on a daily basis than most branches of the largest banks in
the world. Whereas banks typically only have a minute percentage of
their clients' cash on hand and are really a digital business,
casinos are a cash business. This is precisely why large casinos in
Vegas or Macau possess security systems unrivaled by any commercial
bank in the world.
Nearly every single person that wins at a casino on any given
day can take their chips to the cashier's window and cash out their
winnings. However, if a bank's entire client list came to a bank on
any given day and demanded their deposits to be returned, the bank
would likely run out of cash after returning 5% or less of their
Most of the cash that people believe is sitting in a bank ready
for withdrawal at their disposal at any time are just digital bytes
that exist on a bank computer somewhere in the world. Most of the
money in this world does not exist in cash form and exists merely
in digital form, including the billions of "money" that is "wired"
into bank accounts every day from real estate transactions. Most
people have never even heard of
(the Clearinghouse Interbank Payments System) though CHIPS should
be commonly known to every man and woman, given its role in our
fraudulent monetary system. CHIPS clears more than $1 trillion a
day, executing more than a quarter of a million interbank wires and
payments. Do you really think that this is real cash that moves
around the global monetary system daily?
This is why Alan Greenspan said more than forty years ago that
the monetary system was a system which created "
more claims outstanding than real assets
The only difference between now and forty years ago is the fact
that today there are FAR more claims outstanding than real assets.
The claims we all have in our bank accounts are represented mostly
by digital bytes and very little cash. As far as claims to real
cash inside the vaults of banks, multiple clients of every bank
have the same claim to every dollar, yen, euro or pound sterling in
that bank's cash vault.
When we state that Central Banks print money out of thin air,
even this statement is somewhat misleading. The majority of the
time, Central Banks use the fraudulent system they have set up to
merely transfer digital bytes that represent money into the global
monetary system. The fact that there are "more claims outstanding
than real assets," as has been the case for at least a century now,
is the reason why every bank in the world would be bankrupt within
hours if all of their clients demanded that their money be returned
on the same day.
However, let's compare how a bank operates to how a casino
operates. If you win $150,000 at craps in Las Vegas and another
gambler wins $80,000 at black jack and you both show up at the
cashier's window simultaneously, the cashier will not place
$100,000 on the counter and say, "that's all I have, so the two of
you, settle this score on your own." But if two separate clients
arrived at their local bank branch on the same day unannounced and
respectively asked for $150,000 and $80,000 of their own money that
they originally deposited, I guarantee you that many banks would
have a serious problem producing that money on the spot.
If banks actually used a sound monetary system and had gold and
silver backing their money, then perhaps their security system
would be as elaborate as a casino's because they would actually
have something real to protect. Instead, money as it exists today
in our fraudulent system is not only digital, but it is a digital
bunch of IOUs! Given the aforementioned hypothetical scenario, the
bank teller would likely tell the person to return in a couple of
days to gather his cash. In other words, "I owe you, so come back
when we can produce your cash because we don't have it right
Casinos are More Transparent in their Client Business
Casinos are also far more transparent than banks in the manner
in which they operate. Since casinos are essentially a cash
business and banks are not, if you look at a casino's financial
statements, the picture of cash flow through their business is
simple and upfront. One knows how much cash is flowing in and out
of the business every day and it is easy to tell if the casino is
profitable or hemorrhaging. However, look at a bank's financial
statements today and you better have a forensic accountant by your
side if you want to know the truth.
Take a look at the financial statements of any large global
banking institution today and you would have no idea what is
fiction and what is fantasy without doing a lot of digging. Entire
commercial real estate portfolios, among other derivate products
such as CDOs and MBSs, are held on banks' balance sheets at fantasy
valuations because they are not marked to market. Many large
banking institutions would be bankrupt by the end of the month if
they had to liquidate their commercial real estate portfolios. They
are only financially "healthy" because many assets on their balance
sheets are not valued honestly. Of course, I'm not discounting the
fact that gangsters founded Las Vegas, but for the unaware, so was
our modern day banking system.
If we look at the history of bankers like Hank Paulson and the
Fannie Mae (
) and Freddie Mac (
) debacle, we have a blueprint for how dishonest bankers and their
On July 22, 2008, I released a special bulletin to my Platinum
subscribers in which I discussed the likely fate of Fannie Mae and
Freddie Mac at that time. In this bulletin, I stated:
"My belief is that in order to bailout Freddie Mac and
Fannie Mae (which at this point is almost guaranteed to
happen as both institutions are bankrupt as of today),
sticking the American public with their losses will not be
enough to bail them out. I believe that the U.S. Federal
Reserve is going to have to print more money out of "thin
air" just to bail these two institutions out. In doing so,
they will erode the value of all fiat currency all over the
world, whether the Euro, the Swiss Franc, the Japanese Yen,
the Brazilian Real or any other currency. The bailout of
Freddie Mac and Fannie Mae is almost certain to devalue all
currency in the world (paper currency)."
I further stated in that same bulletin:
"Fannie Mae and Freddie Mac hold $1.7 trillion of assets
that are backed by a mere $70 billion of capital.
Furthermore, they guarantee another $3.1 trillion of
mortgages, so in essence they have $70 billion that back
almost $5 trillion. That is not a misprint. These two
companies have $70 billion of assets backing $5 trillion [of
assets and guarantees]."
Based upon my assessment of Fannie Mae and Freddie Mac's true
health, not the disingenous lies told to us by the likes of Hank
Paulson and others, I told my subscribers that the likely final
bailout cost of Fannie Mae and Freddie Mac would be
"more than $2 trillion"
in the form of tax theft from taxpayers and theft through currency
devaluation. Furthermore, I stated that my price target for Fannie
Mae, then trading at $19, was $4 (an estimate that, by the way,
turned out to be far too generous).
In contrast, this is how the financial gangsters assessed the
situation. Former Goldman Sachs CEO and then US Treasury Secretary
Hank Paulson stated in July 2008:
"Their regulator [Fannie Mae's and Freddie Mac's] has made
clear that they are adequately capitalized."
The Congressional Budget Office [CBO] followed up with their own
lies in September 2008, publicly declaring that the final cost
estimate of the Fannie Mae and Freddie Mac bailout to taxpayers
would be $25 billion. Remember from the truth of the numbers, I was
estimating the final bailout cost to taxpayers to eventually exceed
This past Christmas, under the cover of a holiday, the Obama
administration quietly removed the collective $400 billion cap of
bailout money to Fannie Mae and Freddie Mac and raised their
bailout plan to an "unlimited" amount. So in a matter of a little
more than 1 year and four months, the taxpayer bailout for Fannie
Mae and Freddie Mac grew from no more than $25 billion to $400
billion to an "unlimited" amount. At the same time, it was reported
that, as a reward for their fine job, the CEOs of Fannie Mae and
Freddie Mac could each earn up to $6 million in compensation
annually in 2009 and 2010.
The history of lies that has surrounded the bailout of Fannie
Mae and Freddie Mac is very similar to the web of lies that banking
CEOs are weaving today in regard to the disclosure of the financial
health of their institutions. Many of the world's largest banks are
in the same proverbial creek without a paddle and are flat out
lying to the public about the dire circumstances of their financial
health just as Hank Paulson and the CBO lied to us about the
financial health of Fannie Mae and Freddie Mac in 2008 and their
successors continued to lie to us in 2009.
When it comes to transparency about their financial health, the
world's largest banks cannot hold a candle to the world's largest
casinos. In fact, the life-support health status of many of the
world's top banks is the very reason that
24 of the world's top central bankers have
congregated in Sydney, Australia
to hold very secretive talks. In fact, though Ben Bernanke is
almost certainly attending this meeting, this meeting has been so
secret, thus far, that journalists have not even been able to
confirm Mr. Bernanke's presence.
Consider that on March 24, 2008, an article on MarketWatch
originating out of San Francisco advocated in its headlines
"With Stocks Down, It's a Prime time to Increase
The article quoted Christine Benz, the director of personal finance
at Morningstar Inc, as stating:
"It's a practice that almost all the great investors
have used. They've taken advantage of short-term market
panics. It's a sensible strategy for smaller investors to
Sri Reddy, head of retirement strategies at ING, stated:
"If you can afford to contribute more, I would tell you
to increase it in any market. Participate as much as the
plan will allow."
In stark contrast, I wrote an article on my blog almost exactly
one month later, as markets were rising, titled,
"Will Markets Crash Now or Later?"
Eighteen business days after I wrote this article, the US market
started crashing and didn't let up until the S&P 500 had shed
about 50% of its valuation. Yesterday, economist Joseph Stiglitz
stated that in regard to the sovereign debt of the UK and the US,
"Yes, I do think they deserve to keep their triple A rating"
because "all we do is print money to pay it back." If this is the
case, then interest payments on the sovereign debt of the US and
the UK will become worthless and the real question should be, "Why
would anyone want worthless interest payments?" In fact, why even
maintain a rating system, if the rating system is meaningless and
only used to deceive people?
Casinos Offer a Win-Lose Matrix. Banks Only Offer a Lose-Lose
When it comes to customer education, casinos again win hands
down against banks in their transparency. Google the phrase "odds
of casino games" and this search will return 2,410,000 pages, many
of which reveal the odds of every major casino game from black jack
to craps to roulette. Casinos don't hide the fact that the odds are
with the house in every single game from their customers, but banks
routinely do. Of the major casino games, only the odds of winnings
from slot machines remain obscure.
Still, it is common knowledge that casinos earn their highest
profit margins from slot machines of any game their clients play.
For this reason, over the past decade, every casino has
significantly expanded the percentage of floor space that they
devote to slot machines. In fact, though far from an honorable
policy, casinos are even transparent enough to let you know of
their unspoken rule that limits your winnings. Again it is common
knowledge that if you win too much and too often, casinos have back
rooms and blackball lists to solve this "problem."
However, when it comes to the games banks play, these games are
executed in much more secrecy than the games casinos play. Banks
take their clients' deposits, invent shady derivative products
solely for their enrichment, and then leverage their clients'
deposits 20, 30, or even 40 times or more in an attempt to earn
massive profits for themselves. However, they never disclose these
activities to their clients when their clients make massive
deposits with them, and unlike in a casino, they never provide
their clients with a chance of winning alongside with them. If the
banking executives win in their gambles, they keep all their money.
Lose, and they call in favors to their bribed politicians to ensure
that they will get you, the taxpayer, to assume the entire burden
of their losses.
If you think this scenario has changed due to the financial
crisis that reared its ugly head in 2008, you are wrong. The same
shenanigans still take place today and many bankers continue to
gamble with their clients' deposits in an effort to pay themselves
with no concern for the financial health of their clients' monies.
Of course, not all bankers act in this fashion, as many small
community banks abstain from the same high-leverage, high-risk
games of their larger banking brethren.
The mentality of financial executives to transform their
financial institutions into giant hedge funds in search of the huge
payoff is what caused [[AIG]] to fail. Today and for quite some
time, Goldman Sachs (
), JP Morgan (
), Wells Fargo (
), Bank of America (
) and Citigroup (
) all operate as giant hedge funds as well. However, as a member of
the ruling oligarchy of countries, they operate with a certain
immunity not granted to casinos. The largest banks in the world
operate today with the mentality of "if we gamble with your money
and win, only we win. And if we gamble with your money and we lose,
only you lose." And this has been their modus operandi since as far
back as the Great Depression. In a casino, if you gamble with your
money and win, you, not the casino, keep the winnings. Furthermore,
in a casino, you, and not some executive you've never met before,
have the liberty to decide how you will gamble your money.
Casinos operate more like a republic than a bank because in a
casino, every one has the freedom to make significant sums of money
or to walk away and never risk serious financial losses. In other
words, every opinion counts in a casino. If you take a trip with
five friends to Macau and all five of your friends gamble, you can
still opt not to participate and not to risk any of your capital.
This is not an option with all large commercial banks. From the
minute you deposit your money in a large commercial bank, bank
executives are going to gamble with your money in an attempt to
earn huge profits and bonuses and you literally have no say in any
of the gambles bank executives take with your money.
Bankers have become the oligarchs and dictators of the world
economy. In past decades, the financial industry served as a lead
indicator of stock market behavior. If the financial sector rose,
then this usually portended a rise in broad stock market indexes,
and vice versa. Today, the financial sector
the stock market. In early 2007, Citigroup, Fannie Mae and Freddie
Mac comprised just 1% to 3% of the daily NYSE composite volume. In
August of 2009, for weeks on end, Citigroup, Fannie Mae, Freddie
Mac, and AIG (and sometimes Bank of America) comprised nearly 40%
of the daily NYSE composite volume.
Give me a choice today to be ruled under the modus operandi of a
casino or a bank, and I would choose the MO of a casino 1000 times
out of 1000. I'm not saying that casino owners are saints when
compared to owners of banks. Far from that. But I am saying that we
live in scary financial times when we can trust a casino to be
above board and honest to a much greater degree than a bank. At
least with a casino, I would have a chance of winning. And if I'm
losing, at least I can make a decision to walk away. With a bank, I
have neither of these two options.
With a casino, if I win too consistently in a very grandiose
manner, then at least they are upfront about banning me from ever
entering their casino again or the beating I would receive if I
didn't stop winning. With large banks, even if you profit from
their illicit activities because you own their bank shares, they
will continue to let you in the front door and urge you to buy
more, even when they know that the shares are ready to crash. In
the end, I will always have much more respect for an enemy that
confronts me face to face while I'm awake than for one that waits
until I'm asleep so he can stab me in the back. The former at least
has a modicum of integrity, while the latter will always remain a
coward until the day he dies.
As John Maynard Keynes stated,
"There is no subtler, no surer means of overturning the
existing basis of society than to debauch the currency. The process
engages all the hidden forces of economic law on the side of
destruction, and does it in a manner which not one man in a million
is able to diagnose."
All Keynesian solutions to economic crises always debauch the
currency. Just look at the solutions being executed by the Bank of
China, Bank of England, Bank of Japan, the European Central Bank
and the US Federal Reserve today. This is why bankers and their
shills always praise Keynesian economics to high heaven while
secretly meeting, as they are this week in Sydney, to assuredly
plan to debauch currencies even more. And this is why I will always
trust black jack dealers more than bankers. That's why it's so
ironic that most large commercial banks, as part of their "moral
code," do not allow private bankers to do business with casinos. It
appears today, that the bankers got that one entirely wrong.
Disclosure: No positions
Fortress Expands Into Traditional Money