Comparing Today’s Gold Market to the 1970′s: Is the Gold Rush Over? I Don’t Think So!

• Comparing Today’s Gold Market to the 1970′s: Is the Gold Rush Over? 
  by Greg Hunter’s USAWatchdog.com  
  Lots of people are comparing today’s gold market to the 1970’s.  Gold shot up to nearly $200 per ounce and crashed 9 months later to near $100 an ounce.  Of course, gold had an historic rise to $850 per ounce after that wicked pull-back.  Some, such as economist Nouriel Roubini, say “the gold rush is over,” and the seventies are not going to repeat.  The debt of today is greater by orders of magnitude from the 1970’s, and there is no end in sight.  That means gold has only one way to go (in the long term) and that’s up.
  -
  We had a national debt of less than $1 trillion when Jimmy Carter left office.  Today, it is nearly $17 trillion, and the so-called debt ceiling is going to need to be raised–again.  Debt in the U.S government is exploding.  So is debt in the rest of the Western World, just look at Europe and Japan.
  -
  Derivatives were virtually nonexistent back the 1970’s.  Today, the official total of these debt bets is around $700 trillion, and some say it’s more than twice that much.  Pensions didn’t have funding problems back then.  Today, they are at least $1 trillion dollars in the red.  You can say the same thing for student debt—also $1 trillion in the hole.
  -
  There are more than $12 trillion paper dollar assets (stocks, bonds and cash) held by foreigners outside the U.S.  Meaning, you couldn’t control the selling in a panic.  In the 1970’s, the U.S. was a creditor nation.  Today, it is the world’s biggest debtor.  The U.S. credit was stellar in the 1970’s.  Today, it has already suffered its first ever downgrade, and ratings agencies are threatening more. 
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Lindsey Williams: The Coming Chaos! (Revelation News Radio 29 April 2013)

• Lindsey Williams: The Coming Chaos! (Revelation News Radio 29 April 2013) 
  by Revelation News Radio ,
  http://www.lindseywilliams.net/
  
  “A few minutes ago I was on the phone with my elite friend. I must tell you what he said. The survival of your family may depend on it. You and your family do not need to suffer. Many people made great fortunes during the Great Depression in 1929. You can prosper during the days ahead if you heed what my Elite friend is advising me.
  -
  I contacted a second Elite friend to confirm what the first had said. This DVD is made to tell what I was told.”
  -
  - Cyprus – The startling Real Story
  - The American Dollar – How long?????
  - Healthcare – A trap
  - America – The world’s only hope
  - Saudi Arabia – Look out
  - Iran – Sabre rattling?
  - Derivatives – Collapse being discussed
  - Global Collapse of all fiat currencies planned
  - VP Joe Biden:
     – New World Order ie. World Government
     – New Financial System ie. One World Currency, Global Supra-National Central Bank.
     – New Global Rules: New One World Consitution!
  -
  NEW DVD: “New Signs of the Elite, Just Given to Me”
  
  http://www.prophecyclubresources.com/NEW-SIGNS-OF-THE-ELITE-LINDSEY-WILLIAMS/productinfo/LW-NSO01/
  

Click on image for article!

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Jim Sinclair: The US Will Be Cyprused & We Will See $50,000 Gold !

Remember the Golden Rule: He who has the gold makes the rules!

• Sinclair – The US Will Be Cyprused & We Will See $50,000 Gold! 
  by www.kingworldnews.com
  Today Jim Sinclair spoke with King World News about the ongoing chaos and told KWN the world is witnessing something that has never been seen in history.  Sinclair also warned that “the US is going to get Cyprused.”   Below is what Sinclair, who was once called on by former Fed Chairman Paul Volcker to assist during a Wall Street crisis, had to say in this remarkable and exclusive interview.
  -
  Eric King:  “This was from Fed Governor Jeremy Stein’s speech, “If systemically important financial institution or SIFI, does fail, the losses would fall on its shareholders and creditors, and taxpayers would have no exposure … Perhaps more to the point for TBTF (too big to fail), if SIFI does fail, I have little doubt that private investors will, in fact, bear the losses — even if this leads to an outcome that is messier and more costly to society than we would ideally like.”
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  Sinclair:  “What he is saying is that the potential losses are so large, and he is referring to the more than one quadrillion dollars in legacy over-the-counter market for derivatives, that nobody could create that much money.
  -
  So what’s pending now is so large, and these statements from Stein are confirmation that Cyprus is in fact the blueprint in the United States for coming financial failures….
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Source: http://www.jsmineset.com/

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The Wall Street Ticking Time Bomb That Could Blow Up Your Bank Account !

The financial derivatives bomb will explode! It is a question of when?

• The Wall Street Ticking Time Bomb That Could Blow Up Your Bank Account! 
  By Ellen Brown, Web of Debt blog, via
  http://www.alternet.org/
   
  Derivatives turn the financial system into a casino. And the House always wins.
  -
  Cyprus-style confiscation of depositor funds has been called the “new normal.”  Bail-in policies are appearing in multiple countries directing failing TBTF banks to convert the funds of “unsecured creditors” into capital; and those creditors, it turns out, include ordinary depositors. Even “secured” creditors, including state and local governments, may be at risk.  Derivatives have “super-priority” status in bankruptcy, and Dodd Frank precludes further taxpayer bailouts. In a big derivatives bust, there may be no collateral left for the creditors who are next in line.
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  Shock waves went around the world when the IMF, the EU, and the ECB not only approved but mandated the confiscation of depositor funds to “bail in” two bankrupt banks in Cyprus. A “bail in” is a quantum leap beyond a “bail out.” When governments are no longer willing to use taxpayer money to bail out banks that have gambled away their capital, the banks are now being instructed to “recapitalize” themselves by confiscating the funds of their creditors, turning debt into equity, or stock; and the “creditors”  include the depositors who put their money in the bank thinking it was a secure place to store their savings.
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  The Cyprus bail-in was not a one-off emergency measure but was consistent with similar policies already in the works for the US, UK, EU, Canada, New Zealand, and Australia, as detailed in my earlier articles  here and  here.  “Too big to fail” now trumps all.  Rather than banks being put into bankruptcy to salvage the deposits of their customers, the customers will be put into bankruptcy to save the banks.
  -
  Why Derivatives Threaten Your Bank Account
  The big risk behind all this is the massive $230 trillion derivatives boondoggle managed by US banks. Derivatives are sold as a kind of insurance for managing profits and risk; but as Satyajit Das points out in  Extreme Money, they actually increase risk to the system as a whole.
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  In the US after the Glass-Steagall Act was implemented in 1933, a bank could not gamble with depositor funds for its own account; but in 1999, that barrier was removed. Recent congressional investigations have revealed that in the biggest derivative banks,  JPMorgan and  Bank of America, massive commingling has occurred between their depository arms and their unregulated and highly vulnerable derivatives arms. Under both the Dodd Frank Act and the 2005 Bankruptcy Act,  derivative claims have super-priority over all other claims, secured and unsecured, insured and uninsured. In a major derivatives fiasco, derivative claimants could well grab all the collateral, leaving other claimants, public and private, holding the bag.
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Bob Moriarty: The First Crack In The Bond Market Is A Fact !

• The First Crack In The Bond Market Is A Fact! 
  by
  http://goldsilverworlds.com/
   
  This article is the result of an interview with Bob Moriarty (editor and founder of 321gold.com) and reflects his thoughts on the Cypriot case.
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  There are two main issues in the Cypriot banking crisis. The first one is related to the general principle of loans: it is axiomatic that all loans get paid either by the borrower or by the lender. This is the fundamental relationship that anyone has with the bank. When you deposit money into the bank, in your mind it is your money. In the bank’s mind, and from a legal point of view, it is a loan to the bank. If the bank makes foolish investments and loses money [including (y)ours], someone has to pay it.
  -
  “Cyprus made us clear that our money on the bank is not our money, it is the bank’s money.”
  -
  In the case of Cyprus, the losses of the banks were first attributed to the shareholders, then the bondholders, finally the people who had loaned money to the bank. Which foolish investments did the Cypriot banks make? Simple, they were in Greek bonds. As we all know Greek bonds have lost 90% of their value (despite sky high interest rates). Here it gets really interesting. The shareholders and the bondholders of insolvent banks never lost a cent because governments have bailed them out. For the very first time now, they have been wiped out. That is a catastrophic moment for the banking system. Bank A loans money to bank B in the form of a bond, bank B loans money to bank A in the form of a bond. That is the keystone of the whole banking system. It is a zero sum game until one of the counterparties is not able to meet its obligations. It’s no longer an interest rate risk, it is now a counter-party risk.
  -
  In Cyprus, for the very first time counterparties have been wiped out. Once this gets rolling, it is able to start an avalanche. When people will look back to history there will be two moments that mark the big financial and banking collapse. The first one is late June of 2007 when two Bear Stearns hedge funds collapsed. The second one will be March of 2013 when Cypriot banks closed in an unprecedented bank holiday, and for the first time counterparties have been wiped out. It is almost a sure thing that the latter will cause a cascading effect because all banks are linked to each other via bonds. As the banking system has become so complex lately (to the extent that it is almost not possible to understand it anymore), the cascade will hit pretty hard and fast.
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  There could be bank runs in other countries because Cyprus has shown the world that money at the bank is at risk. But that is not the key risk we are facing. The main risk is the unsecured money. In the US there is $10.9 trillion of debt which is insured by an FDAC fund of $32 billion. This is ludicrous. The insolvency of the whole debt based system is the main risk right now. That means that for every $100 on deposit under FDIC insurance, only $.30 is there to back it in case of a bank failure.
  -
  “There is more debt in the world than there are assets to pay, so somebody has to pay for the debts.”
  -
  We are back at June 2007
  After 2008, the banks have accumulated more debt. Going back to the first point (all loans get paid, either by the borrower either by the lender) it implies that someone will turn up for this excessive debt. The day of reckoning can be delayed, but it cannot be avoided.
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  When Bear Stearns hedge funds went under, because of subprime mortgages, nobody could pretend that there was no problem. Similarly, the bankruptcy in Cyprus is the first crack and maybe the most important one. Nobody can ignore the debt problem as from now on. In that respect, Japan is a story that is much worse. Governments have a vested interest in lying to the public. For the public to understand, they need to look at all the information that is laying out there. The highest level piece of information is that there are $648 trillion dollars in derivatives out there in a $64 trillion dollar global economy. What does it tell you? Take a moment to reflect this.
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Jim Sinclair: Something Has Western Central Banks Terrified !

Source: http://www.jsmineset.com/

• Sinclair – Something Has Western Central Banks Terrified! 
  by www.kingworldnews.com
  Today Jim Sinclair warned King World News that something clearly has Western central banks terrified right now.  Below is what Sinclair, who was once called on by former Fed Chairman Paul Volcker to assist during a Wall Street crisis, had to say.
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  Eric King:  “Jim, Bloomberg had a story headlining on their site over the weekend claiming that depositors may lose as much as 60% on deposits in Cyprus.”
  -
  Sinclair:  “This is all because of the one quadrillion dollars in derivatives that are in the financial system.  Six years ago the Bank for International Settlements (BIS) at that time reported that the amount of derivatives already outstanding exceeded one quadrillion dollars.  This number is unimaginable to most human beings.
  -
  But that is the actual number (over one quadrillion dollars).  They never should have released that number because it created a bit of panic.  Central planners immediately changed the accounting method for derivatives and this appeared to bring the total amount down to under $700 trillion.  So through the use of an accounting gimmick the total was reduced, but it hasn’t changed the frightening reality of what the world is facing….
  ….
  There’s absolutely no question that when it’s confirmed that the depositors’ loss of money is not a tax, not a new way of making things whole, but in fact the actual disaster that the global banking system is currently in, you will have a move toward physical gold greater than anyone on this planet now believes is possible.  We will also witness the beginning of a level of fear and panic not seen in this world since 1929.”
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Swirling financial derivatives black hole to destroy global financial system!

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Ex Asst. Treasury Secretary: Dr Paul Craig Roberts – US Financial System To Collapse!

Swirling financial derivatives black hole to destroy global financial system!

• Ex Asst. Treasury Secretary: Dr Paul Craig Roberts – US Financial System To Collapse!! 
  by www.kingworldnews.com
  Today a former Assistant Secretary of the US Treasury warned King World News, “This type of situation is extremely dangerous.  The world has never seen it before.”  Former Assistant of the US Treasury, Dr. Paul Craig Roberts, also told King World News that JP Morgan now threatens the stability of the entire global financial system.  And if the Fed loses control and we collapse, “Nothing and no one would be safe anywhere.” 
  -
  Here is what Dr. Roberts had to say in the second and final part of this extraordinary interview:  “I can point out three giant bubbles that threaten the remains of the American economy … When these bubbles pop, the consequence is obvious:  The wipeout of the remaining wealth from bond and stock collapses, and a very strong domestic inflation from the rise in the import prices.”
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  The United States is now an import dependent country.  It doesn’t produce its own manufactured products, clothes, shoes.  These import items dwarf the import of oil or energy.  So what is the potential for happening when these bubbles burst is widespread unemployment, and a rapid increase in inflation, before which the economic policy has no known solution. 
  -
  … It is frightening, and it shows the extent to which the economic policy of the United States is misused in support of four or five big banks that are ‘too big to fail’ … We now have one bank, JP Morgan, which has derivative exposure equal to the (entire) world’s GDP….
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Keiser Report: Wicked Debt Web (E404) !

• Published on Feb  9, 2013
  In this episode of the Keiser Report, Max Keiser and Stacy Herbert discuss the wicked web that has been weaved when banksters first set out to deceive, the first law of thermo-derivatives which states that risk cannot be destroyed and the hot tub of fraud in which the taxpayer owned Royal Bank of Scotland weaves their web of deception. In the second half of the show, Max Keiser talks to Mitch Feierstein, author of Planet Ponzi, who shows us what the Fed’s $3 trillion balance sheet would look like in a briefcase and the Central Banking bag of tricks that include: divert and deflect, delay and pray and extend and pretend. Finally they ponder whether we face a global reset or sovereign failures?

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The Financial Derivatives & Shadow Banking System Nightmare!

Source: http://www.jsmineset.com/

1000x Systemic Leverage: $600 Trillion In Gross Derivatives “Backed” By $600 Billion In Collateral !

These derivatives are largely worthless when Marked to Market!

• The financial derivatives figure is probably closer to US$1.5 Quadrillion ie. US$1,500 Trillion than US$600 Trillion!
  -
  1000x Systemic Leverage: $600 Trillion In Gross Derivatives “Backed” By $600 Billion In Collateral ! 
  by Tyler Durden,
  http://www.zerohedge.com/
   
  There is much debate whether when it comes to the total notional size of outstanding derivatives, it is the gross notional that matters (roughly $600 trillion), or the amount which takes out biletaral netting and other offsetting positions (much lower). We explained previously how gross is irrelevant… until it is, i.e. until there is a breach in the counterparty chain and suddenly all net becomes gross (as in the case of the Lehman bankruptcy), such as during a financial crisis, i.e., the only time when gross derivative exposure becomes material (er, by definition).
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  But a bigger question is what is the actual collateral backing this gargantuan market which is about 10 times greater than the world’s combined GDP, because as the “derivative” name implies all this exposure is backed on some dedicated, real assets, somewhere. Luckily, the IMF recently released a discussion note titled “Shadow Banking: Economics and Policy” where quietly hidden in one of the appendices it answers precisely this critical question. The bottom line: $600 trillion in gross notional derivatives backed by a tiny $600 billion in real assets: a whopping 0.1% margin requirement! Surely nothing can possibly go wrong with this amount of unprecedented 1000x systemic leverage.
  -
  From the IMF:
  -
  Over-the-counter (OTC) derivatives markets straddle regulated systemically important financial institutions and the shadow banking world. Recent regulatory efforts focus on moving OTC derivatives contracts to central counterparties (CCPs). A CCP will be collecting collateral and netting bilateral positions. While CCPs do not have explicit taxpayer backing, they may be supported in times of stress. For example, the U.S. Dodd-Frank Act allows the Federal Reserve to lend to key financial market infrastructures during times of crises. Incentives to move OTC contracts could come from increasing bank capital charges on OTC positions that are not moved to CCP (BCBS, 2012).
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  The notional value of OTC contracts is about $600 trillion, but while much cited, that number overstates the still very sizable risks. A better estimate may be based on adding “in-the-money” (or gross positive value) and “out-of-the money” (or gross negative value) derivative positions (to obtain total exposures), further reduced by the “netting” of related positions. Once these are taken into account, the resulting exposures are currently about $3 trillion, down from $5 trillion (see table below; see also BIS, 2012, and Singh, 2010).
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The “Fiscal Cliff” Is A Diversion: The Derivatives Tsunami and the Dollar Bubble!

• The “Fiscal Cliff” Is A Diversion:  The Derivatives Tsunami and the Dollar Bubble! 
  by Dr. Paul Craig Roberts,
  http://www.globalresearch.ca/
   
  The “fiscal cliff” is another hoax designed to shift the attention of policymakers, the media, and the attentive public, if any, from huge problems to small ones.
  -
  The fiscal cliff is automatic spending cuts and tax increases in order to reduce the deficit by an insignificant amount over ten years if Congress takes no action itself to cut spending and to raise taxes.  In other words, the “fiscal cliff” is going to happen either way.
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  The problem from the standpoint of conventional economics with the fiscal cliff is that it amounts to a double-barrel dose of austerity delivered to a faltering and recessionary economy.  Ever since John Maynard Keynes, most economists have understood that austerity is not the answer to recession or depression.
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  Regardless, the fiscal cliff is about small numbers compared to the Derivatives Tsunami or to bond market and dollar market bubbles. The fiscal cliff requires that the federal government cut spending by $1.3 trillion over ten years. The Guardian reports that means the federal deficit has to be reduced about $109 billion per year or 3 percent of the current budget.  More simply, just divide $1.3 trillion by ten and it comes to $130 billion per year. This can be done by simply taking a three month vacation each year from Washington’s wars.
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  The Derivatives Tsunami and the bond and dollar bubbles are of a different magnitude. Last June 5 in “Collapse At Hand”   I pointed out that according to the Office of the Comptroller of the Currency’s fourth quarter report for 2011, about 95% of the $230 trillion in US derivative exposure was held by four US financial institutions: JP Morgan Chase Bank, Bank of America, Citibank, and Goldman Sachs.
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  Prior to financial deregulation, essentially the repeal of the Glass-Steagall Act and the non-regulation of derivatives–a joint achievement of the Clinton administration and the Republican Party–Chase, Bank of America, and Citibank were commercial banks that took depositors’ deposits and made loans to businesses and consumers and purchased Treasury bonds with any extra reserves.
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  With the repeal of Glass-Steagall these honest commercial banks became gambling casinos, like the investment bank, Goldman Sachs, betting not only their own money but also depositors money on uncovered bets on interest rates, currency exchange rates, mortgages, and prices of commodities and equities.
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  These bets soon exceeded many times not only US GDP but world GDP.  Indeed, the gambling bets of JP Morgan Chase Bank alone are equal to world Gross Domestic Product.
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  According to the first quarter 2012 report from the Comptroller of the Currency, total derivative exposure of US banks has fallen insignificantly from the previous quarter to $227 trillion. The exposure of the 4 US banks accounts for almost of all of the exposure and is many multiples of their assets or of their risk capital.
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  The Derivatives Tsunami is the result of the handful of fools and corrupt public officials who deregulated the US financial system. Today merely four US banks have derivative exposure equal to 3.3 times world Gross Domestic Product.  When I was a US Treasury official, such a possibility would have been considered beyond science fiction.
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  Hopefully, much of the derivative exposure somehow nets out so that the net exposure, while still larger than many countries’ GDPs, is not in the hundreds of trillions of dollars. Still, the situation is so worrying to the Federal Reserve that after announcing a third round of quantitative easing, that is, printing money to buy bonds–both US Treasuries and the banks’ bad assets–the Fed has just announced that it is doubling its QE 3 purchases.
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  In other words, the entire economic policy of the United States is dedicated to saving four banks that are too large to fail. The banks are too large to fail only because deregulation permitted financial concentration, as if the Anti-Trust Act did not exist.
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Bob English on Geithner Leaving Derivatives Backdoor Open as he Walks Out the Front !

• Welcome to Capital Account. In Washington, not all deadlines are as pressing as the Fiscal Cliff. The date for the final draft of the Volcker Rule has been pushed back, from end of this year to possibly the first quarter of 2013, according to CNBC. Does this simply leave more time for bank lobbying wins like the one scored from the Treasury over foreign exchange swaps?
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  According to Bloomberg, big banks, including UBS and Deutsche Bank, lobbied for the regulatory exemption of foreign exchange swaps from Dodd-Frank. This effort comes as no surprise since foreign exchange contracts were the second largest source of derivatives trading revenue for US bank holding companies in Q2 of 2012. Moreover, foreign exchange swaps and forwards are part of a 4 trillion dollar global daily foreign exchange market. But is that all? Might there be a way through some tricky maneuvering to use foreign exchange swaps as a simulation of interest rate swaps? If so, this would also exempt the 379 trillion dollar interest rate swap derivatives market from Dodd-Frank. Our guest, Bob English, contributing editor for Zerohedge and guest contributing editor for EconomicPolicyJournal.com, tells us how Geithner exempted 410.8 trillion dollars (or 64%) of OTC Derivative Swaps from Dodd-Frank with the stroke of a pen.
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  Plus, third quarter GDP growth was revised to 2.7 percent, up from the 2 percent gain previously reported by the Commerce Department. There are many reports that this gain could reverse, but more importantly should we put stock in GDP as a measure of the economy’s health at all? Lauren breaks it down in today’s Reality Check.
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  Also, earlier this week we asked financial commentator Peter Schiff about his call for hyperinflation and the interview received attention from a certain NY Times economist. Paul Krugman to be exact. Lauren and Demetri discuss Paul Krugman’s post in today’s Loose Change, along with some interesting privacy news from google.

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Bob Moriarty on Derivatives, Depression and Gold ! The Piper Must Be Paid !

• The Piper Must Be Paid! 
  by Kevin Michael Grace,
  http://resourceswire.com/
   
  Bob Moriarty on Derivatives, Depression and Gold
  Kevin Michael Grace spoke with Bob Moriarty, founder and President of 321Gold.com November 14.
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  RW: What do you think of the prospects for the US economy after the re-election of Obama?
  BM: I don’t think the election has anything to do with anything. I think the 800-pound gorilla in the room is the debt situation, and certainly the US is one of the worst. We’re an economy powered by debt, and it’s a fractional reserve system, so there’s always more debt than money. Sooner or later you have to pay the piper. This concept that you can somehow spend your way to prosperity is like trying to drink yourself sober.
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  RW: But that’s the course the US has been on at least since 2007, and there seems to be no end in sight.
  BM: Absolutely correct. How can we have a recovery with a real debt of $7 trillion dollars? I mean it’s going to blow sky high. I’m not saying this as doom and gloom or anything else. The real deficit of the US is $7 trillion a year in an economy of $14 trillion. That’s not sustainable.
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  RW: The Keynesians, who dominate economics, say that debt isn’t a problem because sovereign governments such as the United States can simply print as much money and buy as much of their own money as they choose. And then one day, for reasons that have never been explained to me properly, the economy is going to come roaring back.
  BM: That’s one of those theories. It’s like the theory of Communism. It really sounds wonderful, but I think that everybody would agree by now that Communism failed, and it’s a bad philosophy. I don’t think there are that many serious people who believe that Keynesian economics works. I know the people in government do, but these guys are out of touch with reality. You can look at what is going on in Europe; they just came out with a report in Greece of 58% unemployment among the young people. That is an accident waiting to happen.
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  RW: Since the dot.com bust and the decision by the Fed then not to allow what should have been a recession, we have had over a decade of this kind of economics, and the portents become darker and darker. Yet there seems to be no alternative on the horizon. Doesn’t this surprise you?
  BM: It surprises me only in its duration. I believe to this day—and I’ll never change my mind on this—that we should have let the economy go into a depression in September/October of 2008. We should have let the banks collapse.
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  Let me give you an analogy. I just came back from Albania a week ago. I thought of Albania as some Third World shithole, that I’m going to be in a $20-a-room hotel, and they’ll be driving around in rickshaws. I was really amazed that it’s a booming economy. Those guys are absolutely going gangbusters. Now, in 1997, their economy literally was a lottery, a Ponzi scheme, and it blew up. So every bad thing that could happen to an economy since 1945 happened to the Albanians, and they’re growing like crazy now.
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  Two months ago I was in Turkey, and they’re not in the Euro. Greece is going under financially, and Turkey is booming. We need to let the economy reset and let all these financial pressures blow up and let the debt default, as we know it’s going to. Who in their right mind would buy a 30-year bond now?
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Financial Derivatives Meltdown and Dollar Collapse!

• Derivative Meltdown and Dollar Collapse! 
  by James Hall,
  http://batr.org/
   
  The frightening prospects from a derivative meltdown, well known for years, seem to deepen with every measure to prop up a failing international financial system. The essay Greed is Good, but Derivatives are Better, characterizes the gamble game in this fashion:
  -
  “The elegance of derivatives is that the rules that defy nature are not involved in intangible swaps. The basic value in the payment from the risk is always dumped on the back of the taxpayer. Ponzi schemes are legal when government croupiers spin loaded balls on their fudged roulette tables.”
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  Under conventional international trading settlement, the world reserve currency is the Dollar. The loss of confidence in the Federal Reserve System causes a corresponding decline in value in U. S Treasury obligations. Add into this risk equation, derivative instruments that are deadly threats that can well destroy national currencies. One such response to this unchecked danger can be found in a Bloomberg Businessweek perceptive article, A Shortage of Bonds to Back Derivatives Bets, makes a stark forecast.
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  “Starting next year, new rules will force banks, hedge funds, and other traders to back up more of their bets in the $648 trillion derivatives market by posting collateral. While the rules are designed to prevent another financial meltdown, a shortage of Treasury bonds and other top-rated debt to use as collateral may undermine the effort to make the system safer.”
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  However, what happens when buyers of Treasury notes abandon the reoccurring cycle of rollover debt and stop buying new T-Bonds? Take the Chinese example as a template for things to come. China’s yuan hits record high amid US pressure, “The Yuan touched an intraday high of nearly 6.2640 to $1.0, according to the China Foreign Exchange Trade System, marking the highest level since 1994 when the country launched its modern foreign exchange market.”
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  While it is old news that the Dollar consistently drops in purchasing power, the circumvention of typical trade agreements, that by-pass transitions using the Dollar as the currency of exchange, is relatively recent. The next report forewarns of a major departure from the post Bretton Woods global trade environment.
  -
  China And Japan Move Away From Dollar, Will Conduct Bilateral Trade Using Own Currencies, is one method to avoid the direct consequences of a derivative meltdown.
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  “The China Foreign Exchange Trade System, the division of the People’s Bank of China which manages currency trading, said that the country will set a daily trading rate based on a weighted average of prices given by market makers. The People’s Bank said on Tuesday that an initial trading rate would be set at 7.9480 Yuan for every 100 Yen at market in Shanghai. Unlike yuan-dollar trading, which only allows for a daily fluctuation of 1 percent in Yuan trading value, Yuan trading with the Yen will be able to move within a 3 percent range.”
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Tom Fyler, Financial Insider Exposes Derivatives Fraud and The Agenda to Destabilize America and The Middle East !