(Benjamin Fulford) The leaders of the Group of Seven Industrialized Nations or G7 are holding an emergency meeting in Germany in a futile attempt to avoid their inevitable bankruptcy. The leaders talk about Greece, the Ukraine, China, the Middle East and other matters as if somehow they are still in control. The leaders need to understand that there is a thing out there called reality and, no matter how long you try to avoid it, it has a way of catching up to you. The fact is that, with the exceptions of Canada, Japan and Germany, the G7 nations and their allied Western states have been running a deficit with the rest of the world for the past 40 years. The elephant in the room that nobody talks about is the fact the biggest debtor of all is the Corporate United States.
The rest of the world has made a collective decision to stop financing these Western governments until they stop their constant war-mongering and resource stealing. Since the rest of the world controls most of the real money (i.e. money connected to physical objects) they control the underlying reality. You can eat bread but you cannot eat derivatives or dollar bills. You can trade real things like cars or oil for rice or wheat but if you lose trust, nobody will trade your IOUs for real things. The G7 countries, especially the Corporate United States (as opposed to the Republic of the United States), have managed to postpone the inevitable with fraudulent economic data, offshore slush funds, and derivatives theoretically worth astronomical amounts.
However, no amount of zeroes added to astronomical numbers inside Western banks will make any difference so long as these zeroes have no connection to the real world.
The Chinese have insisted on payment in things, like gold, that actually exist. The American corporate government has, like a once rich junky fallen on hard times, pawned family heirlooms, borrowed from friends, stolen and lied so far to get its next fix of debt. They have stolen Iraqi oil, African gold, Japanese savings and everything else they could get their hands on. However, since real US GDP has shrunk by 21.4% since 2011, it is becoming impossible for the US Corporate government to keep paying its snowballing debts. The obvious answer is to declare bankruptcy.
The problem is that very few people are alive today who remember the last time a European country went bankrupt. No Anglo Saxon country has gone bankrupt for a thousand years so the Americans are even less familiar with what bankruptcy really entails.
Let us compare these two cases to what is happening to the G7 in order to predict the future.
In the case of Japan, the bubble burst in the years 1990-1992. The Japanese government knew as early as 1992 the bad debt total was 200 trillion yen (about $2 trillion). However, public announcements then put it at only 3 or 4 trillion yen. Company A would pass on its bad debt to company B who would pass it on to company C, each with a different accounting deadline. It was like an individual using their American Express card to pay their Visa bill and then using the Visa to pay for their MasterCard and then use their MasterCard to pay off American Express. This scam bought time.
Eventually though, a few of the worst companies were no longer able to hide their bankruptcy. I remember interviewing Kichinosuke Sasaki, president of the Togensha, one of those companies, in the late 1990’s. He was then the poorest man in the world with a net worth of minus 9 trillion yen (roughly minus $90 billion). He was wearing a silk suit that must have cost him tens of thousands of dollars when he originally bought it but it was pretty threadbare and shabby when I interviewed him. He told me he the bankers were keeping him half-alive on a miserable allowance. The bankers would not let him declare bankruptcy because that would have triggered a domino effect that would inevitably lead to the biggest Japanese banks.
In the case of Europe, Greece is playing the role of Togensha. If Greece is allowed to go bankrupt then big European banks will have to declare their Greek debt in default and thus be forced to admit they are also in default. No wonder the top managers of outfits like Deutschebank keep resigning. Nobody wants to be the captain of a sinking ship.
However, the Japanese experience with the bubble makes it very clear that postponing the inevitable just increases the total pain. The Greeks already know this because they are being forced to play the role of Mr. Sasaki, and be squeezed of everything they have so their bankers can pretend all is well. Average Greek income has fallen 40% in the past five years so that bankers can pretend they are solvent. It will only get worse until Greece declares bankruptcy.
It is much better to declare bankruptcy than to stay chained to an unpayable debt burden.
Bankruptcy need not be a bad thing. The first thing people need to understand is that finance is spiritual or psychological. If Greece goes bankrupt, people, buildings, factories, farms, beaches, houses etc. will not disappear. The only thing that will change is how people decide what to do in the future with these real world assets.
In the case of Argentina, as well as in the case of Iceland, declaring bankruptcy was a short sharp shock followed by a rapid rise in standards of living. The people were also freed from the clutches of parasitical bankers.
Of course, if Greece goes bankrupt eventually so will the rest of countries using the Euro.
Angela Merkel recently went to China and Japan to ask for money but returned empty handed.
Since there is no other source of money big enough to bail out the German backed Euro, the German financial system is thus also likely to become insolvent sooner rather than later.
The end result will be a return to the Deutschemark, the Drachma and other currencies tied to historical cultures.
Now here is something to ponder. The European Union Parliament building was deliberately built to resemble the tower of babel. You can see this visually at this link:
The story of the Tower of Babel was that it eventually collapsed and all the different peoples went their separate ways. The new tower of babel was completed in 1999. The question is, where there planners who knew way back then the EU project was destined to go the way of the tower of babel?
Benjamin Fulford has worked in Japan as a correspondent for Knight Ridder, the International Financing Review, the Nihon Keizai Shimbun English edition, and the South China Morning Post before moving to Forbes magazine, where he was the Asian Bureau chief from 1998 to 2005. His investigative reports pursued scandals in the Japanese government and business world. After leaving Forbes he wrote a series of books in Japanese some of which became best sellers, and began publishing on the internet.