For over a decade, central banks and the Federal Reserve suppressed interest rates to zero. This policy pushed investors, corporations, and governments to stretch farther and farther out on the risk spectrum. The result is a fragile financial system riddled with debt, weak protections, and a crisis that is now erupting beneath the surface. Lynette Zang calls it what it is: creditor-on-creditor violence.
Lynette Zang, founder and CEO of Zang Enterprises, has been warning about this unfolding disaster for years. In her latest breakdown, she reveals how the consequences of years of free money are now manifesting as financial cannibalism with devastating implications for your wealth.
The Rise of Credit Cannibalism
The problem began with what Lynette calls “covenant-light loans.” These are debt agreements stripped of protections for investors. Since interest rates were forced to zero after the 2008 financial crisis, these loans have exploded. By 2014, legal safeguards for buyers of corporate debt had dropped below the threshold considered the “weakest level” by Moody’s.
Now, a new and alarming trend is taking shape. Newer creditors are using legal loopholes to push older lenders down the repayment ladder. Barclays recently released a report calling this “creditor-on-creditor violence,” signaling that this kind of financial cannibalization is becoming normalized across markets.
Why This Affects You Directly
You might think this is just a Wall Street issue. Lynette warns that everyday investors are already entangled in this mess. Here's where the danger lies:
- Mutual funds
- Insurance companies (life, property, and casualty)
- Hedge funds
- Broker-dealers
- Banks and credit unions
These institutions often hold or sell securities tied to these vulnerable loans. Your money—whether in a 401(k), savings account, or life insurance policy—is at risk. The contracts you sign are only as strong as the claims-paying ability of the institutions behind them. When that fails, your protection disappears.
Legal Maneuvers That Leave You Exposed
Two major tactics are driving this creditor-on-creditor war:
- Dropdowns
Corporations create new subsidiaries and transfer valuable assets into them. This shields those assets from existing lenders and allows them to be used as collateral for new loans. Existing creditors are left with whatever low-value assetsremain. - Uptiering
Companies restructure debt to prioritize new lenders. This pushes earlier creditors further down the repayment order, especially in bankruptcy. Investors who originally funded these companieslose out, even though they came in first.
These maneuvers are perfectly legal and embedded in fine print. Most people never read these contracts. The ones who write them are not looking out for you.
Deceptive Stability: The Calm Before the Collapse
Lynette highlights Del Monte as a real-world example. Despite its long-standing reputation as a household name, Del Monte faced serious liquidity troubles. Moody’s even issued a downgrade with a negative outlook. For a credit rating agency to do that, especially when they are paid by the corporations they rate, the situation must be dire.
Del Monte’s response was to shuffle its creditor hierarchy. In a restructuring deal, it offered $240 million in new funding, but only for new creditors. Existing creditors who did not agree to the restructuring were pushed to the bottom of the payout order.
This is not just one company. There is a growing list of firms engaging in similar practices. The goal is to extend the life of troubled companies long enough to give the illusion of stability. In reality, the system is rotting from the inside out.
The One Asset With No Counterparty Risk
Amid all this chaos, Lynette urges one solution that offers real protection: physical gold held in your possession. Not ETFs. Not paper gold. Real, tangible gold.
According to the Bank for International Settlements, physical gold is the only financial asset with zero counterparty risk. It does not depend on a company's ability to pay. It cannot be devalued by contract loopholes or financial engineering.
Lynette also recommends collectible gold coins, which sit in a unique legal and tax category, offering even more protection.
Gold is for wealth preservation. Silver is for barter. Together, they are your best financial defense.
The Signs Are Everywhere
Gold ETF flows and spot prices typically move together. Recently, they have decoupled. This signals that Wall Street and central banks are losing control of the physical gold market. A rising gold price reflects a failing currency, and the signs of system failure are increasing by the day.
Debt restructuring and asset transfers are surging in 2024. Central banks will likely be forced to cut interest rates soon just to keep the system afloat a little longer. But this will not fix the problem. It only delays the inevitable collapse.
Get Out of the Henhouse
Wall Street wants you in paper assets. They want you tied to digital accounts and contracts loaded with risk. But Lynette offers a different path.
Take control of your financial future with real, sound money strategies:
- Hold physical gold and silver
- Build local and global community support systems
- Diversify into tangible assets
- Focus on wealth preservation and economic collapse preparation
As Lynette says, “If you don’t hold it, you don’t own it.” Do not wait until the last second. By then, it will be too late to get into position.
Protect your wealth before the system unravels. Schedule a strategy session with one of our experts at Zang Enterprises to create your personalized sound money strategy. Learn how to safeguard your financial freedom with physical gold and silver, food, water, and security.
