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The Global Financial System is on the verge of a meltdown despite all the trillions of dollars of intervention this month to save the global financial markets. The US government and Federal Reserve alone has funded over 4 trillion dollars this year in vain on getting the credit markets to function properly. At the root of this problem are the accounting procedures of the financial institutions.

Most of the large institutions have off-balance-sheet vehicles where they tend to put more non-performing assets. They also categorize many of their assets as Level 3 or mark-to-model. As weaker financial institutions have gone bankrupt or into receivership during the credit market crises of the past year its been well-demonstrated that these accounting practices are overly optimstic.

Financial institutions have very sophisticated information systems to track all their assets, liabilities, cash flow, income and expenses in real time. This makes it possible for their leaders to be able to quickly get access to their numbers on Level 3 assets and off-balance-sheet holdings. However the general public is not able to accurately analyze these numbers due to the various regulatory standards that the banks' lobbyists have gotten passed over the years that allow the banks to have their own set of books for internal reporting and the public set of books that have proven to be way over-optimistic.

The fiat money systems of the global markets has had trust as its foundation. But the accounting rules on public reporting have made possible for the complete erosion of this trust. As a result the financial institutions don't trust each others numbers. And this is precisely why the credit markets are basically frozen. The LIBOR rates continue to spike. Anything else the governments and central banks around the world try to do to unfreeze the market is not working and will not work.

The world has a choice to make this weekend. Either have the central banks cut off funding to the banks that don't immediately start telling the truth. Or the credit markets will continue to stay frozen. If the current credit market dislocation is not resolved quickly then we'll see in the USA the same type of actions next week that Iceland is facing today. The number of business closing up and unemployment will skyrocket immediately and continue to do so until the credit markets are shut down for good once the last inkling of trust has evaporated.

Today the global markets are dropping by about 10%. I'm a believer in free markets. Its a shame that Bush & Co. have decided they'd rather see the whole world fall apart than risk letting their Wall Street buddies risk going under by being honest about the skeletons in their off-balance-sheet or mark-to-model closets. Without the honest truth ... the market isn't really free .... its just a vehicle for manipulating the world in enriching a few while screwing over the rest.

Now is the time to tell our Congresspeople and the President .... QUIT THE ACCOUNTING GAMES. IT'S DESTROYING OUR REPUBLIC RIGHT NOW. JUST TELL THE BANKS TO TELL THE TRUTH AND THAT MEANS GETTING RID OF MARK TO MODEL ACCOUNTING AND ALL OFF-SHEET-BALANCE TRANSACTIONS RIGHT NOW!!!!!