The fractional reserve banking system has allowed the banks to lend more than ten times their capital base.
10% of these loans are bad or will become bad.
The banks have effectively lost all their capital to bad loans.
This happened in Japan in the 1990's and they would not write off the bad loans and become insolvent. Living the lie set Japan back 20 years.
It is happening here and now.
The financial sector has effectively destroyed itself.
Minerals and energy will be ok but avoid those with high debt.
why a global financial meltdown in unavoidable, page-21
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