|Dec 17, 2011, 07:59 PM|
2012 the year of the Hypothecation event bubble bursting making sub prime look small
Yes 2012 will be the year that the hypothecation bubble will burst onto the world and make the sub prime economic mess look like a walk in the park in comparison
Whao boy whoa what in gods name is hypothecation anyway ???
Well for those who don´t move in these economic circles it where the certain sectors of economic world can repeatedly borrow money against a known asset .
Typical examples are your friendly stock broker who sells and buy the shares for you on the stock market account who makes a account for you and others who buy and sell shares in the stocks market .
These accounts for example are not really the brokers they are your personnel accounts .However in a sort of legal loop hole way you personnel accounts are realy the brokers accounts .
Its starts when you made the account you signed over all rights to him if you checked the small print you would have seen this .
So if you deposit $1,000,000 in the account with the broker and said buy these certain stocks , and lets say your stocks rise and are worth now $2,000,000 at all times until you pull this money out of the account with the stock broker the stockbroker own all this money and stocks in its entirety .
Not a issue if your stock broker is super honest isn’t playing the stock market himself and acts as a charitable fund holder guarding your vital interests for a modest fee .
However the rules allow the stock broker to raise capital loans so he too can bet on the stocks using guess what , your cash or stocks as his assets for security
If the stock brokers bets don,t work out you lose all your money from your account .
This scam is called hypothecation eg using your money for the brokers interests . Worse it legal and even if you lose all your money to this broker bad bets you cant get him for fraud .Its totally legal for the stock broker to lose all your money any way he wishes to lose it.
In the USA Hypothecation activities for stock brokers is restricted to 140% of the total that exists in all the accounts he controls or owns .However in the UK there is no limit so infinity is possible with re-hypothecation of previous Hypothecation events .
So many USA broker houses use this loop hole and with their office in the UK London markets to circumvent the USA rules and using re-hypothecation they can use other USA hypothecation loans as the assets .
MF Globals recent crash exposed than more the 1 billion lost assets of their clients accounts was lost due to hypothecation
These re-hypothecation accounts in the UK now have often have more than 4 times than the original assets that acted as security if things go pear shaped.
Often these hypothecation assets are the joe soaps 401K and the stocks ownerships of many peoples who use the stock market as way to save their money for the future economic security .
Ball park its probably exceeds 25% of all stock shares owned in the stock market that have been through several iterations of re-hypothecation from the original 140% hypothecation event in the USA.
The result is this huge poncey scheme bubble has only one possibility in the long run to join the growing list of poncey schemes that failed costing investors some or often all of their saving
In case you still don’t get it, there is a link “Keiser Report_ Möbius Strip of Fraud (E223)”
This link is from from Max Kiaser a economic program anchor man .His creditials are as a Ex Wall Street broker who is now working for the Russian TV channel and he explains hypothecation by using cakes . Basically everyone else can eat your cake and everybody else´s cake for their profits often leaving you with the crumbs and losses or lower profits earning .
There is no belife by max Kiaser that the hypothecation can last pst 2012.
So when the hypothecation Bubble bursts in 2012 don´t say I didn’t tell you
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