Behind the closed doors of private boardrooms in the tallest skyscrapers in New York City, London, Frankfurt and elsewhere, economic history is being made.

By private invitation, some of the most respected financial analysts and bankers in the world have repeatedly assembled for secret economic summits.

Why?

Some of the reasons you already know. The U.S. dollar—long thought of as the most stable and important global currency—has been devalued. Exchange rates are in chaos: The opec dollar pegs are buckling, and now other currencies like the euro may be threatening to do the same. Gold has broken the $1,000-per-ounce barrier, a sign that faith in the fiat economic system is wavering. Meanwhile, oil prices hit $140 per barrel before plummeting back to $110, and gas prices are crimping consumer spending. Food staples have shot up by multiples, and rationing is occurring in many parts of the world. Consumer confidence is down to all-time lows. These are very scary, very real problems.

But the agenda for the world’s banking giants is much more specific: how to save their own skins and end the global credit crunch before the international economy breaks down. No easy solution has yet been found, and financial institutions continue to fail.

But it is not the fact that a couple of banks have failed that is causing the worry.

“There’s a serious banking crisis somewhere in the world approximately once every 10 years,” writes Jeremy Warner for the New Zealand Herald. Then, “every 30 or 40 years” there is a really big one like the Great Depression, or the stock market crash of 1973-74, which saw the Dow plunge 45 percent.

The worry this time is that what is occurring is far bigger—a once-in-an-80-or-100-years-type event—or worse.

For example, economist and university professor Nouriel Roubini—a man Barron’s once compared to the Prophet Jeremiah, whose warnings to ancient Israel went unheeded—is again warning that the worst is still ahead.

Roubini’s prescient words carry more weight today than they did just over a year ago, before the banking sector began its meltdown, but he is still largely ignored by the public. According to Roubini, the ensuing recession is about to help kill off hundreds of banks. Looking at America’s “medium-sized regional banks, a good third are in distress,” and half of the group could go bankrupt, he recently toldBarron’s. He also warned that big banks were facing collapse too, although the U.S. government might intervene to try and prop them up, he says.

The losses keep piling up as the damage spreads.

At first, the banking problems were “contained” to risky subprime mortgages and wouldn’t spread into the economy, the public was assured. Maybe, at a maximum, there would be a couple hundred billion in losses, it was estimated.

Then catastrophe struck the investment banking sector. The Federal Reserve in conjunction with JP Morgan Chase announced a hastily constructed backdoor takeover of investment bank Bear Stearns. According to analysts, if Bear Stearns had failed, the whole banking system could have come tumbling down with it. System-wide damage estimates leaped to the $500 billion range.

Just months later, another bank bit the dust. Pasadena-based IndyMac bank failed, burning up approximately 15 percent of the Federal Deposit Insurance Corporation’s reserves in one fell swoop. Days later, it was announced that Fannie Mae and Freddie Mac, the two gigantic lenders, which hold approximately half of all U.S. mortgages, were in need of government assistance to keep functioning.

It is evident the damage was not contained after all. Now, the losses are spreading up the financial food chain. This is no longer just a “subprime” crisis, “this is the crisis of an entire subprime financial system,”says Roubini.

So far, total system-wide losses admitted to have reached at least $480 billion. But this number may be a fraction of what is coming.

Almost a half-trillion worth of prime adjustable-rate mortgages (arms) will reset this year, vastly exceeding subprimes, notes analyst Jim Willie, editor of the Hat Trick Letter. Many of these loans came with low teaser rates, or with clauses that let the home owners only pay the interest on the loan as long as they maintained a certain amount of equity in the home. But now many of these loans are resetting, often with monthly rates 50 percent higher than previous levels. In comparison to the subprime loans, which set off the banking crisis in the first place, the volume of prime arms is over five times larger.

More mortgage delinquencies are on the way.

Then there are all the commercial real-estate loans, home equity loans, credit cards, student loans, auto loans and industrial loans that are showing signs of increasing delinquency. The impact on balance sheets could be severe.

It is these future unannounced write-downs—now projected to be at least in the 1-to-2-trillion-dollar range—that are keeping industry insiders up at night. It is no wonder that the banking sector remains frozen, with banks, desperately trying to raise reserves and largely unwilling to lend out money to each other, in fear of who could be next to fall.

And don’t forget Fannie and Freddie, which, according to an article by Don A. Rich at the Ludwig Von Mises Institute, will most likely end up costing taxpayers another $1.3 trillion—10 percent of America’s gross domestic product!

The U.S. banking crisis could now be nearing critical mass: where the credit crunch starts feeding on itself. Bankers are losing the ability to stop it. Bank failures have led to reduced credit available to individuals and corporations, which means even healthy businesses don’t have the access to money they have come to rely on. Thus, more loan defaults will occur, and consequently, more pressure will be exerted on bank finances. Wash, rinse, and repeat.

And unlike previous bank crises, today’s global financial institutions are bigger and more intertwined than ever. That means the rest of the world is in trouble too.

“On the world stage, a tragedy has become apparent in recent weeks,” says Willie. “The entire Anglosphere bank and economic systems are imploding.”

“The United States, the United Kingdom (England), Ireland, Australia and New Zealand are suffering from critically wounded banking systems, led by housing markets,” he says. Canada is not much better off.

But the basic cause of the current crisis is quite readily discernible to any student of history—and so is the inevitable result. Even though each banking crisis in history has been different in nature, they all share one common element: greed.

When the good times roll, there is a collapse in lending standards. Everyone is getting rich, and lending and borrowing money is the perceived ticket to easy street.

The result is a big debt overhang that cannot be sustained and must either be written off, as is now occurring with vigor in the Anglosphere economies, or inflated away.

The bank write-downs are only beginning, and failures will become commonplace: “It will be one domino, then another until you think it has gone on for a century,” says investor Bob Moriarty. “We have entered the Domino Depression ….”

Like it or not, we are entering uncharted territory. The world’s brightest financial minds have failed to fix the system. America’s and much of the Anglosphere’s banks are collapsing.

The outlook is grim—but there is hope. A new economy will emerge once all the greed, speculation, and unsupportable debt have been wiped out. For a glimpse at that future, read The Wonderful World Tomorrow—What It Will Be Like.