Thursday, August 6, 2020

👉The Truth About The 2.5 Quadrillion Derivatives Bubble

👉The Truth About The 2.5 Quadrillion Derivatives Bubble

The next financial crisis will be bigger than the last one and will wipe out a lot of wealth across the board. There is a 35 Trillion Pentagon accounting black hole. That was announced quietly. 35 Trillion, I kid you not!! Barely made the print. And let's not forget the mother of all bubbles, that is, the derivatives market, which is a ticking time bomb that no one seems to be talking about. The Derivatives are the Unregulated Global Casino for Banks. The top U.S. banks had derivatives with a notional value of about $147.1 trillion backed by interest rates. Bank of America has a derivative exposure of $50.135 Trillion . Bank of America is sticking the tax-payers with a MASSIVE bill by moving derivatives to accounts insured by the federal government at a total of $53.7 trillion. Bank of America also received a SECRET $1.344 trillion bailout from the Federal Reserve. Citibank has a derivative exposure of 52.102 Trillion dollars. Goldman Sachs has a derivative exposure of 44.192 Trillion dollars. JP Morgan Chase has a derivative exposure of 70.151 Trillion dollars. $70 Trillion is roughly the size of the entire world's economy. For ten years, the Central Banks have maintained the illusion that all is well. Meanwhile, global leverage has exploded to record highs, with the bond bubble now a staggering $147 trillion in size. I can’t stress this enough; interest-rate derivatives are making a case for a financial crisis being ahead. Derivatives are dangerous, and they turn into a problem very quickly. For example, the 2008–2009 financial crisis escalated because of derivatives. And now Derivatives, thanks to Dodd-Frank, are in line ahead of depositors of checking and savings accounts. Yes, your checking account is FDIC insured. However, only about 10% of that can be covered by the FDIC. All FDIC insurance is not enough to cover even 1% of the derivatives that will claim it ahead of you. This time around, there are more derivatives in the financial system. It’s not just the American banks that hold so many derivatives. Others around the world own a lot of them too. The Derivative Market is screaming, Financial Crisis Ahead. Also, Consumer debt as a percentage of GDP is now at a record HIGH. We now are at 19% consumer debt to GDP. We were only around 17-18% prior to the last meltdown! The debt doom loop continues. In the case of a financial crisis, you could bet that asset prices will tumble across the board. So, it may not be a bad idea for investors to have some protection for their portfolios. Gold does a great job of storing wealth and could be a great hedge against a financial crisis. This situation is like the Titanic, holed below the waterline; the water keeps pouring in quicker than the water can be extracted out. Eventually, the volume of the water pouring will bring the entire ship down. The Titanic is sinking in an ocean of financial debt, yet the orchestra keeps on playing, everything is OK, don't worry folks; this ship is too big to sink. This is Crazy. The Federal Reserve just announced that it will now extend its REPO operation until at least the end of February. Remember, they had said their REPO operation would end MID-February. Well, so much for that! My viewers ALREADY KNEW it would not. This is a QE more than ever. The Markets on crack again; nothing will stop these markets. If the markets keep going up on such continued rising stimulus of $80 billion a month on average, these markets on crack scenario will continue to accelerate. The virus is the black swan now. , forget about a black swan, get ready for a flock. We make nothing in America, Ford already scrambling to find parts for production, Wallmart will stay open until they run out of stock same with Amazon. Amazon has a supply line problem in 3 or 4 weeks. Could the Government also be planning to say at some point that the debt is so great, it cannot support Medicaid or Medicare or Social Security payment anymore? Or, perhaps say they have to limit payment of any or all of them because of the debt? This will be the point when the sheep wake up. The long-held, steadfast promises of the government will come to the surface as the lies they have always been. A government that lives by secrecy, and corruption will eventually be outed and destroyed. Audit, expose and end the Federal Reserve. For the moment, the financial markets continue to remain completely disconnected from the hard economic data, but as we saw in 2008, the markets can plunge very rapidly once they start catching up with the real economy. Warren Buffet has 140 billion dollars stacked up, ready for the next crash. Welcome back to The Atlantis Report. You are here for your daily dose of the truth, the whole truth, and nothing but the truth. Please take a second to smash that like button. And as You know friends, I rely totally on your donations to keep this channel functional, as you know, it takes a crazy amount of research and time to bring you this content on a daily basis, so I hope you consider helping with whatever donation you can afford. Thank You. The stock market is in a sucker's rally now, as the smart money already got out and is buying gold. I suspect a major crash this year of 90% or more, primarily caused by worthless currencies but in no small measure by the demise of Chinese manufacturing. I've been anticipating a stock market crash. Now, the Fed is throwing everything at it, including the kitchen sink, to prop it up. I have come to the conclusion that they will do absolutely ANYTHING to prevent this from happening. Now I think that we will see a currency crisis on a global scale. We are currently living through a GLOBAL CURRENCY RESET that includes gold, silver, and the cryptos. Everything else paper-based is a complete ILLUSION. At this point, it is 100% gambling. Longs gambling that fed will elevate this market, shorts gambling the market will come back to reality. It's such a silly game, but it also affects our livelihood. The entire system is a scam, almost like the Casino odds are rigged to favor the Casino, and those smart enough to count cards are Not allowed to play. The system is actually a detriment to the masses, and helping a few do well, falls far short of helping the masses. We need to take control of this Republic...eliminate the FED system that allows the elite to control the money supply to their benefit and use a science or resource sourced system to be more in harmony with nature and the planet. To make absolutely certain that the Fed becomes the lender and buyer of last resort, a MULTI-DECADE Plan- a deliberate act, budgets are pricing in an EPIC debt expansion. NOTHING could make the Federal Reserve happier... My dear viewers, this is your quarterly warning that Uncle Sam is not a good steward of your money. The total amount now for the global Derivatives market is Over 2.4 Quadrillion dollars and counting. Yeah, just think about that number for a minute. Quadrillion dollars. Derivatives fall into many categories from futures, options, credit default swaps, and any complex combinations of these. They can also be used to wager, bet, and spectate on a market move or direction. The general risk is simple. If you start seeing defaults (particularly credit events), these derivatives have to start paying out. Then the derivatives of the derivatives involved in the defaults will also have to start paying out. See the snowball effect? These defaults are sometimes taken to court to determine the wording of what to call them because of the derivatives behind the default. i.e., is it a credit event or not. Currently, defaults are generally low, so these derivative payouts are nothing more than bankster games in the shadows. This is one of the reasons you see The Atlantis Report always harp on subprime problems because that is where the most money is currently made involving derivatives, but it is the most dangerous to the markets we know as 2008 showed. Subprime is the canary in the coal mine. That's where it will likely originate if it implodes, again. The worst-case scenario is that the payouts will exceed the total available liquidity. It would be immediate panic leading to depression because of the liquidity crunch. The cash market available, your production market available, and the investment market available. Clearly isn't enough to cover the possible implosion of the derivatives market. The rub is that if the derivatives blow up, then the money is gone. Remember that debt paid or defaulted means the money that it represented is gone. So all the money that savers have would be useful in helping to rebuild the markets and businesses, but the FED will loan money out for cheap to the gamblers that broke the system so the saver's money will also be cheap. If you have savings, you lose. Here is the best way to think about it: A derivative is like some of the crazy side bets you see take place in sporting events. But because everyone knows these are very wild bets, you have to provide collateral. In the derivative industry, you can use other derivatives you are carrying as collateral - this is why there can be so many magnitudes of Collateralized Derivatives even though there isn't that much collateral in the entire solar system. So back to the original illustration. Would your bookie accept as collateral other bets you have on? Nope - cause he ain't stupid. But the Fed is that stupid and is backing all of this mess by throwing billions daily into the repo and treasury market. At some point, the bets will be wrong and come due - there is no collateral that is not also pledged a hundred times over. So someone defaults and doesn't pay their bet. That's when the wheels come off because that will cascade through the entire system. This is why the fed will not publish who are the bad banks that are sucking on their repo window. Because what will happen is people will realize that bank is in trouble, and they are counterparty to a hell of a lot of our derivatives. We need to close those trades now. The next financial crisis will be bigger than the last one and wipe out a lot of wealth across the board. 1) No one really knows exactly when a crash will occur, but there are cycles we can get rough ideas from. 2), be ready with research and cash so that you can buy companies on sale when there is a recession. We are run by the elite criminals worse than any mafia. There is no government in the world that has this kind of money. This is roughly three times the entire world economy. The unregulated market presents a massive financial risk. The corruption and immorality of the banks make the situation worse. If you don't want to bank with these banks, but want to have access to free ATMs anywhere-- most Credit Unions in the USA are in the CO-OP ATM network, where all ATM's are free to any COOP CU member and most support depositing checks. Credit Unions are like banks, but invest all their profits in giving members lower rates and better service. They don't have shareholders to worry about or have derivatives to purchase and sell. This was The Atlantis Report. Please Like. Share. Leave me a comment. Subscribe. And please take some time to subscribe to my back up channels, I do upload videos there too. You'll find the links in the description box. You will also find a PayPal link if you want to make a donation. Thank you wholeheartedly to all those of you who have already donated. Stay safe and healthy friends!

Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

No comments:

Related Posts Plugin for WordPress, Blogger...