The International Forecaster, Bob Chapman, exposes The Rotten Underpinnings Of Our Financial System:

“We have to chuckle when the world is concerned with financial events in Dubai, Iceland, Latvia, Lithuania, Estonia, Romania, Hungary, Austria, Spain, Ireland, Portugal and Italy, when all of Europe’s and America’s banks are insolvent. Who is kidding whom? We cannot leave out the brokerage houses and insurance companies. We must admit that the Fed and other central banks have done a good job covering up the mess they deliberately created by deceiving the public, as they prepare for stage 2 of the credit crisis. The only way these companies can continue to “survive” is to continue to keep two sets of books. Decisions by the FASB and the BIS have guaranteed that the charade will continue unbeknownst to the public and professionals alike. We are long past moral hazard and into criminal enterprise. They will operate in a one-world of in reality until they all simply collapse. Each and every day their underlying assets deteriorate. Next to fall over the years 2010 and 2011 will be the stock market and bond market. That should expose the rotten underpinnings and bring about the demise of our financial system. The only question is will we look like Weimar, Zimbabwe or Argentina?”

[emphasis added]

Mr. Chapman is right, in that we regularly hear stories about the problems with government debt in Eastern Europe and certain mid east countries. All the while, American and Western European banks are completely bankrupt, to the tune of trillions of dollas – if they weren’t, then there would have been no need for the TARP bailout. The illusionists at the banks are keeping our focus tuned to the left hand where we see green shoots and recovery, while the right hand continues to play the paper shuffle game, hiding toxic assets and keeping foreclosures from hitting the open market.

As Chapman has suggested, it is only a matter of time. The mathematics here are very clear, and the losses world-wide far outweigh the money central banks have been able to print. Eventually, there will need to be so much money printed just to bail out losses, that the whole system will either collapse because the CB’s realize they can’t save them, or the currencies involved hyperinflate to such a level that they completely collapse as viable monetary instruments.

On top of the risk to the global financial sector, consider the many geo-political scenarios that can play out in the world, including a strike on Iran, terror attacks on oil pipelines around Saudi Arabia or Yemen, or a breakdown of social order in Pakistan, and the probability of a negative impact event on the US Economy rises even higher.