We're broke. Stock up. NOW

From Matt over at Peak Oil: Life After the Oil Crash:

"If you've been reading LATOC or any other (reality-based) energy sites, then you are familiar with the concept of energy return on energy invested (EROEI). Once a closed system's EROEI falls below the break even point, the system is no longer viable."

"Well the financial world has something similar to EROEI which is the amount of GDP generated for each dollar of debt injected into the economy. For lack of a better term, I will refer to this as "MROMI". Not unlike the EROEI of U.S. oil fields, he MROMI of our financial system has been steadily declining for over 50 years. Worse still, here is a chart showing that the system has hit "zero hour"..."

"What does this mean - on a pragmatic level - for the typcial LATOC reader? Well pretty much the usual which is the system is going down and so you should be doing whatever you can realistically do to prepare for major breakdowns in globalized systems of finance and food. If you want to discuss the "monetary flat spin" that we've entered, check out the discussion going on about it right now at the LATOC Forum and the original one over at the Ticker Forum."

Source/Author: Matt at LATOC.

Financial headlines today:

Mike Ruppert: "Economic collapse is accelerating . . . you can expect major breakdowns in daily life likely within just a few months"

Bloomberg: Global Order at Risk as Financial System Cascades Into Crisis

International Tribune: Rapid Collapse of Mexico a Top Fear for U.S. Military

Washington Post: More and More U.S. Consumers Seen Hunkering Down

Are you hunkered down? I am. Start saving! Stop spending! Plant a garden! Stock up! When? NOW.

Humor on a gloomy day

Iceland, we hardly knew ye

Iceland's currency is evaporating and the country is melting down (economically)

"Yesterday, trading in the shares of six major financial institutions was suspended as the government sought to avert meltdown....Meanwhile, Icelandic interest rates have been catapulted to 15.5 per cent, peaks not seen in Britain since Black Wednesday, in an attempt to rein in inflation. The krona's freefall on the international currency markets is surpassed only by the catastrophic failure of Zimbabwean currency."

Only Zimbabwe's has surpassed it? That's pretty bad, man.

TEOTWAWKI "And I feel fine..."

Amish in ascendancy

The list of failed United States FDIC banks has grown from two to five in the last couple of weeks. Here is a list of insolvent banks. The latest world Big World Bank to teeter on the verge of insolvency is United Bank of Switzerland. Yes, it's true, a Swiss bank.

The current financial crisis is not one of liquidity, as the Federal Reserve says. It's really an issue of insolvency. Here is a list of insolvent banks, with their writedown, rundown, or losses in the millions or billions next to their name. UBS is United Bank of Switzerland. You will notice the first few sound familiar. After Bear Stearns went bankrupt, and the Fed opened up an emergency take-out window, Goldman Sachs and Lehman Bros took advantage of the fire sale. That resulted in a downgrading of their S&P rating. To negative.

Here is a good article from Bloomberg about the Swiss Bank situation

So what's this have to do with the Amish? Our country is in a deep crisis, with a current account deficit that cannot be sustained, a falling currency, and an energy crisis, all at once. Just before the Soviet Union fell, it was enduring the same. The US is now the world's largest debtor nation, and for a country with the world's largest economy, if (when) we default, the world economy comes with it. The cycle of things will stop. I don't know how to build a home, make a tool, grow some food, coordinate with my neighbors, create fire, or use a horse for transportation. But the Amish do.

Name - ($) writedowns so far (does not include loss reserve increases or remaining exposure). The list on the original page offers a hyperlink for each bank, so you can check it out for yourself.
Goldman Sachs - $5.4B
IKB - $2.71B + 10.2B
Morgan Stanley - $16.1B
Merrill Lynch - $22.5B
Lehman Brothers - $5.4B
Citigroup - $46.6B
Washington Mutual - $1.6B
DZ BANK AG - $2.1B
HSBC - $26.5B
UBS - $19.2B
ABN AMRO Group - $2.4B
Wachovia - $3.2B
The Royal Bank of Scotland Group PLC (RBS) - $3.6B
Mitsubishi UFJ Financial Group - $510M
HBOS PLC - $2.5B
Comerica Incorporated - $63M
Fifth Third Bancorp - $155M
US Bancorp - $690M
Royal Bank of Canada - $544M
Canadian Imperial Bank of Commerce - $3.2B
Bayerische Landesbank - $2.8B
Bank of Montreal (BMO) - $639M
Credit Suisse - $3.1B+$2.85B (est.)
Wells Fargo - $1.4B
Natixis-$1.8B
Mizuho Financial Group Inc - $3.2B
WestLB AG - ?
Barclays PLC - $3.1B?
Commerzbank - $855M
Deutsche Bank - $3.2B
JP Morgan Chase - $3.7B
SunTrust - $222M
Bank of America - $7.2B