p>The derivatives market is worth more than $516 trillion, roughly 10 times the value of the entire world’s output: it’s been called the “ticking time-bomb”. Unsurprisingly, this news comes to us from Britain; the U.S. media is not going to mention it.
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p>The complex and opaque derivatives markets, land of hedge funds and complex financial instruments, has been dubbed the world’s biggest black hole. It operates outside of the grasp of governments, tax inspectors and regulators, in a parallel, shadow world to the rest of the banking system. They are private contracts between two companies or institutions which can’t be controlled or properly assessed. In themselves derivative contracts are not dangerous, but they can have an enormous domino effect on the rest of the financial world.
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p>Most markets have something backing them up. But derivatives don’t have anything, because they are not real money, but paper money. It is also impossible to establish their worth; the $516 trillion number is actually only a notional one.
p>Anything that carries a price can spawn a derivatives market. They are financial contracts sold to pass on risk to others. At the core of this market is the credit derivative swap, effectively an insurance policy against the default in the interest payment on a corporate bond — although you don’t even need to own the bond itself. It’s like buying an insurance policy on someone else’s house and pocketing the full value if it burns down.
p>Many experts that I personally respect, and that have studied this issue for decades, believe that the U.S. financial crisis is an intentionally designed scenario of a Problem-Reaction-Solution. Create a problem covertly and blame someone or something else for what you have secretly done; tell the people through an unquestioning mainstream media the version of the problem you want the masses to believe; then openly offer, through changes in society, the ’solution’ to the problem you have yourself created. This ’solution’ is always the installation of more centralized control.
p>
p>Take these simple coordinates and apply them to the events of the last few days and weeks and everything morphs into focus.
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p>The banking ‘crash’ has been coldly designed to create the ‘problem’ that can lead to the ’solution’ — a massive centralization of power in the ‘private’ and ‘government’ banking systems, both of which are owned and controlled by the same network of families.
p>The ‘World Central Bank’, plays a major roles in this area and wants to impose and control the entire global financial system. As a result of the economic turmoil, we are now seeing this being proposed to ’solve the problem’ of the banking chaos and to ‘make sure it never happens again’. br>/p>p>You can see the very clear directon in this area as the a href=”http://www.nytimes.com/2008/10/15/business/economy/15bailout.html?th&emc=th”>US government bought $250 billion in shares of the nine largest banks in the US this week./a>br>/p>img src=”wild>/aggbug.aspx?PostID=71197″ width=”1″ height=”1″>br>a runat=”server” href=’/blogs/public_blog/Why-the-U-S–Economy-is-Going-to-Get-Much-Worse-71197.aspx#comments’> img runat=”server” border=”0″ alt=wild> /img><

This entry was posted on Thursday, October 30th, 2008 at 8:44 am and is filed under History. You can follow any responses to this entry through the RSS 2.0 feed. Comments and pings are closed.

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