ACCOUNTANTS CAN'T SAVE THE WORLD

I know accounting puts most people to sleep, including myself, and I have a BS in Accounting. But accountants have the power to obscure and hide reality with a journal entry. The accountants at the biggest banks in the world, with the encouragement of government officials, central banks, and largest accounting firms in the world, have been covering up reality since 2009. The loans on the books of the biggest banks in the world are only worth a fraction of what they are being valued at on the books. Everyone knows it. It is a the biggest widest fraud in the history of mankind. Banks pretend they will get repaid. Borrowers pretend to pay. Stock market gurus pretend these banks aren’t insolvent. And the world pretends that the whole thing isn’t about to collapse.

But it is. Extending and pretending does not pay off the bad debt. The only thing that can pay off debt is real cashflow. There is no cashflow to pay off the debt. The world economies are contracting. The politicians and central bankers are scrambing around like cockroaches in a frat house when you turn the lights on. Their solution is always the same. Print money out of thin air, debase the currency, and lie.

PR, misinformation and covering up the truth can work for awhile. But, not forever. As an accountant by training, I’d love to say we could save the world with a journal entry, but sadly we cannot.

Reality will win in the long run, and the reality of the worldwide economic system is dire. Happy Friday!!

European Bank Blowups Hidden With Shell Games: Jonathan Weil

By Jonathan Weil Sep 14, 2011 8:00 PM ET

The last time the world had a major banking crisis, fair-value accounting rules were near the top of the list of scapegoats most likely to be denounced by government and industry leaders. Not so this go-around. Today many of Europe’s largest financial institutions are seemingly on the brink again, driven by fears of pent-up losses stemming from the sovereign-debt debacle. Only you don’t hear much criticism of fair-value reporting anymore. That’s probably because the accounting mandarins gutted many of their fair-value rules in response to the financial system’s near-meltdown three years ago. This hasn’t made banks safer. It has given politicians and bankers one less culprit to blame, though. Fair-value accounting — or the notion that financial instruments should be recorded at market value on companies’ books rather than at historical cost — made for a popular whipping boy in 2008, both before and after the collapses of Fannie Mae, Freddie Mac, Lehman Brothers Holdings Inc. and American International Group Inc. More