Precious metals

Many banks already have “negative capital,” but hide it from the public. They disguise their balance sheet by inventing “fantasy securities.

Up until Lehman Brothers’ bankruptcy (2008), banks evaluated their assets depending on the day’s market value (mark to market). However, as toxic assets lost a great deal of their value, and even became unsellable, instead of admitting their losses, banks preferred to change accountancy rules. They now “estimate” in make-believe fashion (mark to fantasy) what particular papers might be worth if there were a buyer; or they take the initial purchase price as a benchmark, ignoring any depreciation which might have occurred in the meantime; or they overestimate a debt, because it is supposed to be worth more in the future.

 

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