Following the loss of the US’s triple-A credit score which sparked sell-offs on global markets, a new war using financial derivatives has been waged, which by no means can bear the name of WWIII, financial analyst Max Keiser told RT.
Investors however remain unconvinced the country's finances are solid enough. Problems in the Eurozone will be up for discussion by the French and German leaders next week.
Max Keiser, financial analyst and host of the Keiser Report on RT, said French banks are now loaded with toxic derivatives that were sold to them by US investment banks.
“The US investment banks and the rating agencies are now attacking these French banks. They know where the bodies are buried, and they are using the weapons they sold them to attack them,” he said. “The rating will be downgraded again. This is part of a new era on Wall Street – they go after sovereign debt. Wall Street and rating agencies are working together to destabilize the sovereign debt of these countries,” he added.
With the markets swinging back and forth, it looks like traders are panicking. And as Max Keiser believes, it does not look likely to settle any time soon.
“The volatility was the goal; by downgrading the rating you create volatility,” he explained. “The derivatives’ volume this week is exploding higher than any week in history. That is making many people on Wall Street and in the City of London very rich. So they will continue to downgrade and to milk the system to extract wealth,” Keiser stated.
As austerity measures are forced on people in Europe and the US, they are inevitably going to hit the most vulnerable members of society like those dependent on Medicare and Medicaid in the US, said Keiser. But there are also fears these cuts could slow growth and bring about a new wave of recession.
“This is WW III, a new war using financial derivatives. The objective is to preserve the speculative rates given to the Wall Street bankers of zero per cent,” he concluded.