DiscussWorldIssues - Socio-Economic Religion and Political Uncensored Debate - View Single Post - Derivatives: The $600 Trillion Time Bomb That's Set to Explode

**traithJah** · 10-14-2011, 01:53 PM

'time bomb' & 'explode' make for a better headline than "banks will fail in cascading series involving counterparty risk."

we all saw what counterparty risk means in 2007-2008. banks write insurance contracts they can't back, confident that the US gov. will bail them out.

and when they write the contracts, they make the obvious mistake of assuming that all of the insurance could not come due at once. in the mean-time, they are happy to collect premiums on the insurance - it's an advanced form of usury.

then there's the obvious implication - if the US gov is going to bail them out without increasing the deficit faster than Congress can raise the debt ceiling, they will HAVE to print money.

both those terms, "counterparty risk" and "Print Money" - you would think they would make people appreciate PM's more. PM's are getting more popular but i don't see them getting widely popular.

makes me wonder if US agribiz is putting fluoride in the milk - and the beer - and the orange juice. 280+ million saw 2007/8 go down, but many of them have managed to convince themselves that the economy is better because the stock market is 'up'.

meanwhile, half of America is living paycheck to paycheck or welfare check to welfare check, and doesn't have the FRN's with which to buy PM's.

since we can see some of what's going on, i wonder what will be different tomorrow or in a few weeks when the House of Cards falls again. we get of taste of it with Belgium nationalizing Dexia and the EU & EFSF creating a bail-out fund somewhere between 400 billion & 3 trillion Euro's. seems like Europe is just doing what the US did - print money to bail out the children who run the banks (no offense to children, at least they're innocent).

10-14-2011, 01:53 PM	#5
traithJah Join Date Oct 2005 Posts 611 Senior Member	'time bomb' & 'explode' make for a better headline than "banks will fail in cascading series involving counterparty risk." we all saw what counterparty risk means in 2007-2008. banks write insurance contracts they can't back, confident that the US gov. will bail them out. and when they write the contracts, they make the obvious mistake of assuming that all of the insurance could not come due at once. in the mean-time, they are happy to collect premiums on the insurance - it's an advanced form of usury. then there's the obvious implication - if the US gov is going to bail them out without increasing the deficit faster than Congress can raise the debt ceiling, they will HAVE to print money. both those terms, "counterparty risk" and "Print Money" - you would think they would make people appreciate PM's more. PM's are getting more popular but i don't see them getting widely popular. makes me wonder if US agribiz is putting fluoride in the milk - and the beer - and the orange juice. 280+ million saw 2007/8 go down, but many of them have managed to convince themselves that the economy is better because the stock market is 'up'. meanwhile, half of America is living paycheck to paycheck or welfare check to welfare check, and doesn't have the FRN's with which to buy PM's. since we can see some of what's going on, i wonder what will be different tomorrow or in a few weeks when the House of Cards falls again. we get of taste of it with Belgium nationalizing Dexia and the EU & EFSF creating a bail-out fund somewhere between 400 billion & 3 trillion Euro's. seems like Europe is just doing what the US did - print money to bail out the children who run the banks (no offense to children, at least they're innocent).
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