0 votes

700 TRILLION..that is what the estimate is for global derivatives!! WERE DOOMED!

hope you all read this and understand what this is.. very important!

http://www.dailyreckoning.com/Writers/Mogambo/DREssays/MG042...




Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

This doesn't mean gold isn't

This doesn't mean gold isn't a great investment, since in an evironment of deflation against the dollar, some items will fall faster than others. Houses for example may fall since there are too many on the market and a family can always consolidate and share a house with grandparents, children and grandchildren sharing one home. But the bankers if they play their cards right strip away a lot of wealth as long as the law of the land requires that taxes be paid in dollars and contracts be paid in dollars. I guess this makes it even more important for Ron Paul to get into office so that we can have an alternative competing currency.
grant

Gary North

He had an interesting view on why Gold was dropping, He also laid out an argument on why he thinks the Fed is NOT increasing the money supply as much as people think

and Gary North thought that

and Gary North thought that the world was going to end at midnight 1999... he was the biggest y2k doomer and gloomer... not to say I think what he said wasn't right with the evidence! but Ron Paul seems to think differently...

as for me and my home, we shall worship the LORD

I only have one question, if

I only have one question, if there are so many dollars out there, why can't people get enough of them to pay off their mortgages? We should be tripping over them on the street, shouldn't we? If dollars aren't spent they have no value. And if all the money is spent on foriegn products then the dollars are being held somewhere aren't they? I know there are trillions of dollars worth of derivatives out there, but isn't that just speculated value that can evaporate? Like the cost of a persons house, if there are few dollars out there exchanging hands for people to buy homes the price of the house goes down, it still has the same value, ie a place to sleep, keep the rain off ect... but if you need to sell to pay off a debt or you can't manage the mortgage, you sell for what you are able to get. It seems to me that if world central bankers are able to keep "actual" dollars off the market (not imaginary credit notations) that the dollar will increase in value. Leading to what some Ron Paul people suggest that bankers would first cause inflation and then deflation to get property away from people. Wasn't this the same thing that happened during the great depression? Hadn't bankers lent out more gold in the form of credit than they actually had?
grant

I think Sinclair said it was

I think Sinclair said it was $1.14 quadrillion.

yep your right! the mogabo

yep your right! the mogabo was off a little!

as for me and my home, we shall worship the LORD

Sinclair, just another Alex

Sinclair, just another Alex Jones type fear monger. The guy is well versed in his knowledge, but his whole approach is just a big put off....unless you are a loud mouthed douche that refuses to accept well laid out counter opinions, as some of the folks in this very thread are. I think the ship is tanking for sure, but I don't tell jzneff he's an @sshole or call him smart guy. He's not being rude to anyone, he just doesn't agree, and he lays out why he doesn't agree. I don't agree with him, but he has every right to be here saying what he thinks without people calling him names and being beligerent just to be that way. THAT makes me hesitant to listen to people who act that way because it's irrational, reactionary and overall, pretty lame.

in regards to Sinclaire I

in regards to Sinclaire I think your wrong.. the guy is an expert in this field.. look at his resume... look at the business's he's owned or has.. he deals directly with this stuff.. he is the one I trust more than anyone else..
its just not "his opinions".. he knows how the market works!

I have a different take on both of those men

Many people have questioned AJ's motives, but in my gut I feel he is a patriot. Jim Sinclair is not a fearmonger, he is an angel. You, NeoConned, have never impressed me as anything other than a somewhat well-read but misguided egomaniac. As long as we're slinging opinions around. ; )

exactly......these are my

exactly......these are my opinions.........you have every right not to agree with them. Sorry you feel im a well-read but misguided egomaniac. Perhaps I am SGP in disguise.....or Sandra???

Hey, you brought it up

but no, I don't think you're SGP. Your grammar, syntax and spelling are way too good.

oh, and ironically enough, I

oh, and ironically enough, I feel the same way about Sinclair as you do about me ;) A well read but misguided egomaniac.

My calculations

I blame the digital calculator invention. When they first came out (I had a sinclaire and it cost £200 in c1975) they had seven LED's. Mind you the abacus I had before that had 12 beads on a string.

'I always think of all you canvassors and precinct leaders and delegates at the front line and caucuses.
Good luck out there &Thank you. You're a gift.

'I always thank of all you canvassors and precinct leaders and delegates who were at the front line and caucuses.
Good luck out there &Thank you. You're a gift.

ahhh yes another good read

ahhh yes another good read on derivatives...
http://jsmineset.com/

as for me and my home, we shall worship the LORD

For What It Is Worth...

I am very glad that jzneff has had the patience to stick it out on this forum. While I do not always agree with him, his intelligent and reasoned arguments are welcome as they facilitate a good discussion. You do not want to surround yourself with people who always agree with you, or you might wake up to find yourself out in the deep woods. Jzneff is helping to keep us all honest, and by challenging our positions in a reasoned and (mostly) respectful tone, he forces us to sharpen our arguments and consider where we might be wrong.

Jzneff, your argument regarding the 70's being considered the "end of the world" is a very good one, and one that has been lurking in the back of my mind for some time. Nearly every generation probably has thought that the end was at hand, and so far, they have been proven wrong every time.

However, there are still a few points for the side of impending doom. First, there is the undeniable fact that every empire has its end. Whether it happens this year or 100 years from now, we all agree that someday, the empire of the United States will cease to be. It may be gradual; it may be sudden. But it will come. (I know... doesn't sound like a point for "impending doom".... yet...)

Second, our financial and structural situation is very different today from what it was in the 70's. Our manufacturing capacity is far less than it was in the 70's, and the personal debt is also far greater. The national debt is also much, much larger with not one but two expensive wars with a third currently being pursued (Iran).

Third, our character is weaker than it once was. We have become a society addicted to entertainment. Our education system is a shambles, and our people are divided and intellectually weak. We have become a relativistic society, so it is becoming virtually impossible to rally to a common foundation upon which we can agree (hopefully I am overstating this). This makes me concerned about how our citizens would handle a second great depression once it starts. Do we have the fortitude and integrity to help each other through it?

Fourth, there is a movement toward a North American Union (documented and verifiable) that has their target date set for 2010 to implement a new community plan between Mexico, Canada, and the United States. This plan is already well underway, and a financial crisis would serve them well in tearing down resistance and ushering in the new currency. Such financial manipulations have happened many times in the past, so it is not far fetched to think that someone could "push us over the edge", so to speak. Our economy has been teetering on the edge for a while now, and it would not take much to plunge us into a depression.

Jzneff, I am curious to hear your thoughts on these issues.

khomar... you don't keep up

khomar... you don't keep up with current events! read and study for yourself.. not what anyone on this forum says! when you do that you will see where some are full of it!

as for me and my home, we shall worship the LORD

Excuse me?

Why do you say that I do not keep up with current events, and what makes you think that I do not read and study for myself? I have already seen the articles that you have been posting, and have read much of the evidence that you yourself are looking at. I am daily scanning many different news and opinion sites to try to understand what is going on.

I ask jzneff's opinion because it differs from my own, and I want to understand why to see what merit, if any, lies in his ideas. It never hurts to consider another point of view, and I have found many of his statements to have merit. He may be flat out wrong about our near term future, but can anyone say with absolute certainty what will transpire? Could you and I not also be dead wrong in our understanding?

Only through open, honest, and reasoned discussion can we avoid pitfalls and move ever closer to the truth -- and that is all that matters here. It is not about who is right and who is wrong. It is not about my ego or my opinion. It is about providing for my wife and four little boys. It is about preparing for the future, and knowing how to lead and instruct my boys so that they can survive in and hopefully change the world in which they will emerge. It is about looking for solutions and answers to the problems that face us.

I mostly agree with you: the picture is very bleak, and I think we could be facing an imminent collapse... but I could be wrong. I have been wrong before, and I know I will be wrong again. "In the presence of many counselors, there is safety."

We must examine the motives

for defending our positions, especially the prognostications for gloom/doom and it's all good. I suspect there is an unhealthy dose of ego in play. You know I always appreciate your contributions Khomar, keep on keeping it real.

I always have time for you Khomar

1) Yup...empires collapse without an exception, so far. I will never argue that we are on a path that will prevent that from happening...far from it. I believe that empires slowly grind away everything that made them great, and it's a slow death process. We're well into beginning that process, and I think it might not take a generation to get to that point. I weap for the future, but I'll fight to see that this does not happen on my watch. I believe that Keynesian system, fiat, and supply side crap are not the reason we're on this path...I do believe that welfare, socialized medicine, and ever expanding budgets and national debt will be the death of us. Keynesian economics is simply a tool to hide the slow death march from us.

2) You're correct...but exporting real manufactured goods has been (somewhat) replaced by the export of intellectual property and mind power. We design the microchips, they make them in Taiwan, and sell them around the world. We design the soccer balls, make them in Bangladesh, and sell them to England. They don't manufacture very much in Manhattan, but the minds are there, and the money goes there. It's an economy where blue collar button pushers are never going to make $40 an hour again, but through maintaining our intellectual superiority, we can still make it work. We lost a lot of our production base in the early 1980's, but still managed to keep on chugging.

3) Don't I know. Intellectual weakness is our biggest problem in the US. We're a group of millions of lazy slobs who need things spoon fed to us and then complain about the lack of $50 an hour janitor jobs. It's a tough world out there, and we're raising generation after generation of kids who are ill prepared. I'll never defend the intelligence of the average American...it's something i've hated since the day I was born. I've been kicked and shunned by more people than I can count, and I have to often dumb myself down just to fit in with a crowd. It's sickening to the pit of my stomach...it makes me cry when the most intelligent conversations i've ever had in my life have been with foreign nationals...you can't find much in the states anymore.

4) I don't think they'll manage to get there any time soon. If nothing, America still has a very strong sense of national pride...once this comes closer to fruition, it will stir up every "love it or get the hell out" redneck in this country and it will fall on its face. They may be able to form a US/Canadian union in the near future...but I hate to say there are too many racists to allow Mexico to join. This may very well be a red herring to divert our attention, because I don't see it as likely to occur.

I don't see a depression as very likely...more likely we'll have 3-4 years of recession turning into stagflation...then we'll finally take our medicine and shut the printing press down like in the 1980's. The next decade might be very painful, but only on the level of the 1980's pain. Keynesian econ has one more boom to produce before the final bust.

Here's the problem

Consider your answer to point #2:

It's an economy where blue collar button pushers are never going to make $40 an hour again, but through maintaining our intellectual superiority, we can still make it work.

But then just a couple lines later, you say "Intellectual weakness is our biggest problem in the US." This is what probably scares me the most: we have built our economy around the idea of intellectual superiority -- ideas, concepts, strategies. However, there are several problems here (getting off-topic, I know, but indulge me):

  • We are losing our edge intellectually.
  • The next generation is not being groomed and prepared to take the place of the retiring baby-boom generation.
  • We now rely heavily on other nations to actually produce our products.
  • We are in the process of alienating the rest of world through our foreign policy.
  • Our heyday of using inflation to tax the world is coming to an end as they are starting to leave the dollar.

The rest of the world is catching up fast, and we are rapidly losing our advantages. It is the last point that also makes me wonder if we may be reaching an end sooner than we think. If Iran is successful in offering an alternative to selling oil outside of the dollar, our currency could collapse in a very short period of time.

You said that the"Keynesian econ has one more boom to produce before the final bust." Why do you believe that there is one more boom to go?

Yup

Like I said...I weap for the future. We have given away our edge through educational laziness and "no child left behind" mentality.

The reason I think we have at least another boom left to produce, is we still have at least one more generation before the real fools take over.

I think the next boom will be in biotechs...the Asians have not caught up in that market yet and I think we have the minds to drive a real explosion in that industry. Hopefully...we'll make the next one sustainable rather than drive it into the ground like the dot.com's

I hope you are right

I am not sure how much longer our house of cards can stay standing. While biotech may help segments of our economy, the drag of welfare from the decaying underbelly and the rise of social security costs from retiring baby boomers will put a tremendous strain on our economy, and we are near breaking point already. Time will tell.

In the meantime, I will continue to try to prepare for the worst and pray for the best.

The Asians may surpass us in biotech

due to the regulatory atmosphere here.

now this for your reading

now this for your reading entertainment! the derivatives market is unwinding.. ok JZ tell me how this man who is privy to inside information is a liar!

http://georgewashington2.blogspot.com/2008/06/derivatives-ma...

as for me and my home, we shall worship the LORD

Transition vs Destruction of Wealth

I think one of the points that jzneff is trying to make is that the wealth will not just disappear. Instead, it will transition from one party to another. From your linked article:

Well, it turns out that the reason that Bear Stearns was about to go belly-up before JP Morgan bought it is that it had held trillions of dollars in derivatives, which were about to go south. (The reason that JP Morgan was so eager to buy Bear Stearns is that it was on the other side of these derivative contracts -- if Bear Stearns had gone under, JP Morgan would have taken a huge hit...) (emphasis added)

As the derivatives collapsed for Bear Stearns, it transitioned their wealth to JP Morgan (and their Federal Reserve cronies). What we are likely to see is a massive power grab using the inflated derivative system to bury the competition. Now, I think it is far worse the jzneff (if I understand him correctly) because a great deal of wealth may find itself in the hands of the very few -- even worse than it is today. This is probably the greatest danger from the derivatives market. Just a thought.

Just so you know...

back in 2003 Warren Buffett called derivatives "financial weapons of mass destruction"

back in 1993, Rep. Henry Gonzalez, the Chairman of the House Banking and Currency committee, called derivatives a "ponzi scheme"

yet Greenspan was a servant of the NY banks, did nothing and let this market get out of hand

derivatives are responsible for 50% of the earnings of these banks

Just so you know

Warren Buffett doesn't pretend to understand the derivative market fully.

In 2008, Buffett was commenting on reading a bank's annual 10-K report, and said "After a couple of hours," he said, "I had about 25 pages marked with big question marks that I couldn't answer."

Not pretending to ever know more about economics than Buffett...he has forgotten more than I could ever hope to know...but the massive explosion in derivatives happened only in the last decade, and Buffett is an old school investor.

Follow his advice, for it's always good, but also know where he's the alpha guru and where he is an admitted novice.

read it and weep smart

read it and weep smart guy!

http://www.jsmineset.com/ARhome.asp?VAfg=1&RQ=EDL,1&AR_T=1&G...

as for me and my home, we shall worship the LORD

Read it, didn't weap

Jim Sinclair...interesting character. Gold bug, and especially interested in pushing your money into gold. Gold goes up as jitters about inflation and financial ruin go up...so you could say he has a vested interest in panicking you.

9/5/2007 - "I see the mountain of over-the-counter derivatives that, including all types, exceeds $30 trillion." Jim Sinclair

6/9/2008 - "The OTC derivatives are shown as $596 trillion notional value, as of December 2007" Jim Sinclair

Trust him? I don't

I trust him

He, Monty and Dan Norcini have been instrumental in helping people protect themselves from what's coming. The derivatives are still being created, even to this day. There is a reason for sierra being in your face, Khomar is a true gentleman and I am civil. But when sierra detects BS, he is in your face. I don't blame him a bit. I trust Jim Sinclair, the fact that you don't makes me very wary of you.