NEW YORK (PNN) - August 5, 2013 - Will rapidly rising interest rates rip through the Fascist Police States of Amerika financial system like a giant lawnmower blade? Yes, the FPSA economy survived much higher interest rates in the past, but at that time there were not hundreds of trillions of dollars worth of interest rate derivatives hanging over our financial system like a Sword of Damocles. Now a Mexican billionaire has come forward with a similar warning.

Hugo Salinas Price was the founder of the Elektra retail chain down in Mexico, and he is extremely concerned that rising interest rates could burst the derivatives bubble and cause massive bankruptcies around the globe. Of course there are a whole lot of people out there that would be quite glad to see the “too big to fail” banks go bankrupt, but the truth is that if they go down our entire economy will go down with them. Our situation is similar to a patient with a very advanced stage of cancer. You can try to kill the cancer with drugs, but you will almost certainly kill the patient at the same time. That is essentially what our relationship with the big banks is like. Our entire economic system is based on credit, and just like we saw back in 2008, if the big banks start failing then credit freezes up and suddenly nobody can get any money for anything. When the next great credit crunch comes, every important number in our economy will rapidly start getting much worse.

The big banks are going to play a starring role in the next financial crash just like they did in the last one. Only this next crash may be quite a bit worse.

I think we are going to see a series of bankruptcies. I think the rise in interest rates is the fatal sign that is going to ignite a derivatives crisis. This is going to bring down both the derivatives system and financial system.

There are over one quadrillion dollars of derivatives and most of them are related to interest rates. The spiking of interest rates in the Fascist Police States of Amerika may set off that. Eventually we are going to come to a moment when there are going to be massive bankruptcies around the globe.

What is going to be left after the dust settles is gold, and some people are going to have it and some people are not. Then the problem is going to be to hold on to what you’ve got because it’s not going to be a very pleasant world.

Right now, there are about $441 trillion of interest rate derivatives sitting out there. If interest rates stay about where they are right now and don’t go much higher, we will be fine. But if they start going much higher, all bets will be off and we could see financial carnage on a scale that we have never before seen.