The Great Rehypothecation

Are derivatives *intended* to drive the world to bankruptcy and totalitarianism?

Hypothecation is defined as pledging something as surety for a loan; to pawn or mortgage. When most people buy a house they immediately pawn it. They take out a mortgage on it, they hypothecate it. But nobody hypothecates like banksters.

Ellen Brown explains Casino Capitalism:

“The shadow banking system’s lifeblood is collateral, and the issue is that market players re-use that same collateral over, and over, and over again, multiple times a day, to create credit. The process is called ‘rehypothecation.’ Multiple parties’ financial statements therefore report that they own the very same asset at the same time.”

“It is this reuse of the collateral to back multiple speculative bets that has facilitated the explosion of the derivatives bubble to ten times the GDP of the world.”

“Derivatives are basically just bets, which are sold as ‘insurance’ — protection against changes in interest rates or exchange rates, defaults on loans and the like. When one of the parties to the wager has a real economic interest to be protected – e.g. a farmer ensuring the value of his autumn crops against loss — the wager is considered socially valuable ‘hedging.’ But most derivative bets today are designed simply to make money from other traders, degenerating into what has been called ‘casino capitalism.’”

“Any major black swan could prick the massive derivatives bubble, which the Bank for International Settlements put at over one quadrillion (1,000 trillion) dollars as far back as 2008. With global GDP at only $100 trillion, there is not enough money in the world to satisfy all these derivative claims.”

“Under the rubric of ‘no more bailouts,’ the Dodd Frank Act of 2010 purported to fix the problem by giving derivatives special privileges. Most creditors are ‘stayed’ from enforcing their rights while a firm is in bankruptcy, but many derivative contracts are exempt from these stays. Counterparties owed collateral can grab it immediately without judicial review, before bankruptcy proceedings even begin. Depositors become ‘unsecured creditors’ who can recover their funds only after derivative, repo and other secured claims, assuming there is anything left to recover, which in the event of a major derivative crisis would be unlikely. We saw this ‘bail-in’ policy play out in Cyprus in 2013.”

The pathogenic plutocracy, aka the pathocracy, has hypothecated the world and built a mountain of derivatives which is *intended* to collapse the world economy and drive us to their Bankster's Dungeon, with social credit systems enforced by CBDCs, medical tyranny, and depopulation. Their dungeon stinks of a New Whirled Odor.

But the pathocracy is going to pay the piper. We the People are going to call the tune.

The only way to stop the tyranny is to begin at the local level, with things like Citizen Grand Juries and Nullification.