The Horrific Derivatives Bubble That Could One Day Destroy The Entire World Financial System
The derivatives market is almost entirely unregulated and in recent years it has ballooned to such enormous proportions that it is almost hard to believe. Today, the worldwide derivatives market is approximately 20 times the size of the entire global economy.
Because derivatives are so unregulated, nobody knows for certain exactly what the total value of all the derivatives worldwide is, but low estimates put it around 600 trillion dollars and high estimates put it at around 1.5 quadrillion dollars.
Do you know how large one quadrillion is?
Counting at one dollar per second, it would take 32 million years to count to one quadrillion.
If you want to attempt it, you might want to get started right now.
To put that in perspective, the gross domestic product of the United States is only about 14 trillion dollars.
In fact, the total market cap of all major global stock markets is only about 30 trillion dollars.
So when you are talking about 1.5 quadrillion dollars, you are talking about an amount of money that is almost inconceivable.
So what is going to happen when this insanely large derivatives bubble pops?
Well, the truth is that the danger that we face from derivatives is so great that Warren Buffet has called them "financial weapons of mass destruction".
Unfortunately, he is not exaggerating.
It would be hard to understate the financial devastation that we could potentially be facing.
A number of years back, French President Jacques Chirac referred to derivatives as "financial AIDS".
The reality is that when this bubble pops there won't be enough money in the entire world to fix it.
Link:
http://theeconomiccollapseblog.com/archives/the-horrific-derivatives-bubble-that-could-one-day-destroy-the-entire-world-financial-system
No comments:
Post a Comment