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Samnospam
Advisor

wrap your head around this

Google "collateral transformation derivatives". A bunch of new and old stuff out there, tells an interesting story.   The numbers are mind boggling.

5 Replies
gough whitlam
Senior Contributor

Re: wrap your head around this


@Samnospam wrote:

Google "collateral transformation derivatives". A bunch of new and old stuff out there, tells an interesting story.   The numbers are mind boggling.


Political power grows out of a gun BHO.  I think you will find it was Moa Tse Dang who first said " all power comes out of the barrell of a gun".  But I might be wrong. 

I would hate to think you were just being your mongrel paranoid self again eh?

BA Deere
Honored Advisor

Re: wrap your head around this

What is it, about $1 quadrillion in outstanding derivatives?   Takes alot of fingers and toes just to count to these numbers anymore.  Of course all "they" have to do is press a reset button on the computer and "Blip" it all goes away, all it will cost us is a little bit of freedom.

Samnospam
Advisor

Re: wrap your head around this

If you've read much about it you'll realize that the new regulations maybe have made the system MORE unstable, the spirit is certainly being circumvented.  If there was any doubt that letting the MF's fail was the best plan that can be laid aside.  Failure is the best regulator.

 

I've got conflicting ideas about what it means in the immediate future.  Long term it will crash and burn no doubt, but in the nearer it still seems deflationary to me, with so much cash equivalents tied up as collateral on derivatives trades I don't see how you get an excess of cash into the peoples hands.   It also seems to me that it doesn't bode well for building a productive economy with so much wheel spiinning going on.

 

Your thoughts?

Samnospam
Advisor

Re: wrap your head around this

When the book value of the derivates are multiples of world gdp, you have to say WTF?

bruce MN
Advisor

Re: wrap your head around this

I've put this up here a half dozen times or so over the past couple of years.  No idea if you or hardly anybody else has read it as there has been essentially no response.  I think that Nebr, Farmer did last titme I did.  I've taken to carrying it around like a Baptist lay preacher would his New Testament:

 

http://www.macrobusiness.com.au/2011/05/overruled/

 

Seems you are suddenly interested in the topic. Are the Austrian idea Gods going there now, seeing as they haven't been able to initiate hyperinflation by the "think method".

 

They'll be dissapointed (and shown up) this time too, though. It's all of that new meta mony that keeps that from happening.  Not the policies, or in spite of the policies as one may want to see it, of the Fed or the other Central Banks.