This one is a doosy. So it will likely be as difficult to explain as it is to understand.
The basis of this post is --> this article.<-- Read it slowly and read it twice, especially the section titled "Capital Destruction". This is important yet difficult to understand. I had to read it three times myself. Here is my simplified explanation:
First, watch this two minute video from "Rich Dad", Robert Kiyosaki on assets and liabilities.
This is an income statement and balance sheet in it's most basic form. The bottom is the balance sheet, with assets and liabilities. This is the same whether you are an individual, a multi-national bank, the Federal Reserve, or even an entire country:
The situation the banks are in right now is that, thanks to fractional reserve banking, they have almost no real capital, but their balance sheets are loaded up with assets on one side that are liabilities on another bank's balance sheet. And vice versa. So as we see these behemoths merge, or consolidate as the Fed, the FDIC and the Treasury are orchestrating, these assets and liabilities CANCEL EACH OTHER OUT.
All that will be left in the final analysis is the liability to the depositors who provided the capital which was washed away by these games they played.
The banks MUST be recapitalized!
PROBLEM: What is being done to "rescue" our banks like Wamu and Wachovia, consolidation, is exactly what will destroy the whole worldwide banking system. We are watching an implosion, a self-destruction, happen right before our eyes. Just like what happens when matter and antimatter come in contact with each other.
SOLUTION: What is needed is a recapitalization of these banks, not an asset-destroying consolidation. And ONLY FreeGold has the available capital to make that happen. NOTHING ELSE. In fact I would challenge anyone to propose even a theory of some other way to recapitalize our system. It is impossible.
Antal Fekete is talking about FreeGold, and I'm not sure he even realizes it. He has formulated a solution, but the one missing ingredient is for gold to find it's true value which not only draws it out of hiding, but makes the world bulk of gold more than enough to start acting like a sponge.
Quotes from the above article:
What is needed is the mobilization of gold hoarded by the Treasury, as well as of gold hoarded by the private sector.
Mobilization of gold is the only way.
Save the pension funds!
This crisis is a warning, possibly the last one, that the recapitalization of banks with gold cannot be further postponed without risking the total collapse of the financial system.
Here is the dead canary in the coal mine: WaMu Employees' Pension Fate Unclear. Yes, they will lose their pensions. And so will many others. This is just the beginning.
Summary: The banks are broke. They have no capital, only debt related assets and the associated liabilities. What our leaders are doing will make the assets they DO have just disappear along with the related liabilities. But the liabilities to the depositors will remain. A vicious cycle has begun which will leave all banks insolvent and savers broke.
Printing new money for those savers will not recapitalize the banks. Only gold can do that. Only gold can go in an asset column and not be in the liability column of another bank.
The only way to mobilize the gold so it can serve this function is for it's price to float freely on the world stage.
This is the ONLY solution, and it will come to the world one way or another. Please try to convince me that I am wrong.