Death Bonds: Wall Street's Insidious Plan To Make Billions Off Of The Death Of Americans

Wall Street has come up with new financial instruments called "life settlements" that will pay money to investors when people die. Critics are calling these new life insurance instruments "death bonds", because the quicker the insured people die, the more money the investors make. To these critics, it seems very unsavory that a catastrophic event, such as a flu pandemic that kills millions of Americans, could suddenly put billions of dollars into the pockets of investors.

Financial analysts have blamed much of the financial meltdown of the past year on the failure of the exotic financial investments that Wall Street has dreamed up over the past decade. But that isn't stopping Wall Street from coming up with even more bizarre financial instruments.

So just how would Wall Street investors make billions off of the deaths of ordinary Americans? The New York Times recently described exactly how these new financial instruments will work.....

The bankers plan to buy “life settlements,” life insurance policies that ill and elderly people sell for cash — $400,000 for a $1 million policy, say, depending on the life expectancy of the insured person. Then they plan to “securitize” these policies, in Wall Street jargon, by packaging hundreds or thousands together into bonds. They will then resell those bonds to investors, like big pension funds, who will receive the payouts when people with the insurance die.

The frightening thing is that these financial instruments give investors an incentive to see the policyholders die as quickly as possible. The New York Times described it this way.....

The earlier the policyholder dies, the bigger the return — though if people live longer than expected, investors could get poor returns or even lose money.

Do you understand what this is saying?

It can basically be boiled down to this statement:

The faster people die, the more money that the investors will make.

Do you find that disturbing at all?

These kind of financial instruments set up a very disturbing scenario. If millions of Americans were to suddenly die from the swine flu or from the bird flu or for some other reason, that could result in billions of dollars in profit for Wall Street investors.

Are you starting to get the picture?

That is why these financial instruments are being called "death bonds".

What kind of sick investors would hope for the early death of Americans so that they can make a huge profit?

Some are criticizing the timing of these new financial instruments considering the fact that public health authorities keep on declaring that we are on the edge of a major swine flu pandemic.

Would these "death bonds" give Wall Street investors the desire to see the swine flu take as many lives as possible?

The truth is that this kind of financial instrument should be made illegal. Nobody should be making huge profits off of the premature deaths of Americans.

But these days it seems as though some on Wall Street are willing to make a buck any way they can. Even if it means that people have to die prematurely in order for that to happen.

Why It Was Incredibly Stupid Not To Listen To Ron Paul

As unemployment skyrockets, government debt soars and a record number of U.S. banks fail, many are now starting to realize that it was incredibly stupid not to listen to Ron Paul. You see, for decades Americans have been enjoying the fruits of the biggest debt party in history, but now the day of reckoning has come, and the foolishness of having a constantly inflating currency backed up by absolutely nothing is becoming crystal clear.

The devastating economic crisis of the past year caught many Americans by complete surprise, but the truth is that sound money conservatives such as Ron Paul have been warning that this disaster would come for decades. Just as it is true that an individual cannot borrow increasing amounts of money indefinitely without getting into very serious trouble, the reality is that the U.S. government cannot borrow larger and larger amounts of money indefinitely without it causing a complete economic disaster.

Just consider the U.S. national debt chart below. It shows the rapid growth of the U.S. national debt over the decades. But what it does not show is what has happened this past year. Because of the economic collapse and all of the bailouts, the national debt of the U.S. federal government has absolutely exploded. The U.S. government has been spending money so fast and in so many different ways that nobody is quite sure exactly what the national debt is at now. The more conservative estimates place it around 11 trillion dollars, while other estimates place it much, much higher than that.

So what is the answer that the Obama administration has given us to this massive debt problem?

Borrow and spend more money of course!

The Obama administration insists that this injection of money into the economy has fixed it.

That is kind of like going out and maxing out all of your credit cards and having to go ask your uncle for a loan, and then saying that you are rich because he loaned you some money!

Nobody ever fixed their credit card problems by putting more money on their credit cards. Indeed, it only makes the problem worse.

In the same way, by borrowing money even more rapidly, the U.S. government may have put off economic problems for a time, but by doing this they are making the ultimate day of reckoning even worse.

The truth is that all of this government borrowing and spending is going to wreck the U.S. dollar.

It is impossible to flood the money supply with liquidity without causing rampant inflation, but that is exactly what is in the process of happening.

Take a look at the chart below. It is a chart of the growth of the U.S. money supply. Since the 80s the money supply has been moving upward rapidly, but pay particular attention to the very end of the chart. That is this year. The money supply is absolutely skyrocketing.....

So what happens when you have much more money for the same amount of goods and services?

Inflation.

Now it hasn't quite kicked in big time yet. Many Americans are noticing that prices have gone up here and there, but eventually the type of inflation that is going to kick in is going to be mind blowing.

And it will affect everyone. You see, inflation is like a tax on everyone and everything. When you go to the store and a loaf of bread costs ten dollars, will you be able to buy as much?

No, of course not.

Your money will be worth less.

All of the hard work you put in to scrape together some money will have been devalued.

Your "wealth" will not be worth as much as it was before.

But even in the midst of all of this government spending and the rapid expansion of the money supply, hundreds of thousands of Americans are still losing their jobs every month, and U.S. banks are failing at a record clip. The chart below shows U.S. bank failures during the past few years.....


So what about 2009?

Well, CNN is reporting that 89 banks have failed so far in 2009.

We still have about a third of the year to go.

So just imagine what the chart above will look like at the end of this year.

This is a total economic meltdown folks.

We should have listened to Ron Paul.

But instead the American people were stupid and kept electing politicians who piled up a debt that their children and grandchildren would never, ever be able to repay.

The "wealthiest nation on earth" has now become the biggest debtor on the face of the earth.

It didn't have to be this way.

We could have listened to Ron Paul.

But we didn't.