Why Derivatives Are "Weapons of Financial Mass Destruction'

When I managed national real estate and construction for the then ‘Tiffany’ of investment firms I learned from the CEO that should the 1932 Glass Steagall Banking Act ever be rescinded-it was certain that speculators would game the system and cause another Great Depression.

Wanting to know more I became licensed on all exchanges-and started paying close attention when derivatives were de-regulated in 1992. Gold at the time was $300. Today it’s over $1,000 with China, Russia, France and the UN calling for the USD to be removed as the reserve currency, a status that has long shored up our economy.

In 2003, Warren Buffet termed derivatives ‘financial weapons of mass destruction created by mad men’. At that time their ‘value’ stood at $9 trillion. Today, that number has reached $1.4 quadrillion and continues to expand geometrically.

Can you picture even $3 trillion? In stacked-up dollar bills it would reach from Earth to the Moon 238K miles away. If you’d spent a million dollars each day for 2,000 years ago–even that would ‘only’ amount to three-quarters of a trillion dollars!

A quadrillion is a thousand trillion. A trillion is a thousand billion. A billion is a thousand million. The relative scale of the world’s financial engines in relation to those $1.4 quadrillion derivatives follows in U.S. dollars:

1. The U.S. GDP is $14 trillion.
2. The Global GDP is $45 trillion.
3.Global real estate value is $65 trillion.
4. Global stock and bond markets are $74 trillion.
5. Global derivatives exceed all combined global wealth by 31 times.
6. The global population is 6.8 billion people. The derivatives market is equal to $206,000 USD per every person on the planet.

‘When I Ruled the World’:

The public is right to be angry at the US Big Banks that caused the meltdown: Citi, BofA, JP Morgan, Chase, Wells Fargo–and both sides of Congress that are in their pockets. The banks are still using customer deposits protected by FDIC insurance to speculate in derivatives, instead of lending to small business. They’ve not paid back taxpayer bailouts, and have rewarded themselves with billions in bonuses while raising customer fees.

It’s up to the people to stop feeding the monster banks. Check out the ‘Move Your Money’ online movement. Find out how to determine which local banks and credit unions are well managed, and stop supporting the big banks that are endangering us all, and are turning America into the Coldplay lyric ‘When I Ruled the World.’