Derivatives Contraction Is Leading Cause Of Bank Deflation And Credit Crunch: Economists Ignore This Fact

Derivatives monster ate capital not debt

Here is a typical example of how the huge Derivatives Beast is ignored by economists pretending to understand what is going on in the world.  I have explained for years how the derivatives game suddenly appeared during the years banks were deregulated and offshored.  This game meant NO CAPITAL was needed for lending and bankers lent money they didn’t have to all and sundry with wild abandon.  Then, when debt deals went bankrupt, there was no capital base to cover losses and the entire system suddenly collapsed in 2008.

Saudi Royals Double Dealing Coup In Egypt: Oil Prices Shoot Up, Making Kleptocrats In SA Richer

 

The ridiculous Huffington Post front page tonight which celebrates illegal military overthrow of an elected government.

Nothing happens in a vacuum.  Gold and oil prices have been generally falling.  And one particular country hates this fact: Saudi Arabia.  Bin Laden’s #1 target for destruction and overthrow wasn’t the US government but Saudi royals.  The US protects these very vicious dictators not that bin Laden was going to be any nicer than they…but to weaken the Saudi royals, his plan was to lure the US into war with Afghanistan and thus, have the US go bankrupt like Russia.  A plan, incidentally, which is working all too well.  But the real issue of the coup in Egypt is why the Saudis want a dictatorship there again.  The answer is many fold and I will start with oil prices.

Global Commodity, Stock And Bond Markets All Fall As Debt Buying By Big Central Banks Falters

Global markets plunge as Fed pulls plug on QE -Global stock, bond and commodities markets slump as investors take flight as Fed signals end to QE3 and China’s cash crisis deepens.  This news doesn’t surprise me all that much.  The Chinese said last year they would limit the growth of credit and they did.  Japan greatly expanded credit but mainly only for export international corporate purposes.  The Fed Reserve announced they, too, were going to reduce lending to rich bankers who, in turn, must take into account real inflation, something they don’t want to do right now.  So, the value of gold hoards is also falling.  Commodities of all sorts are falling.  Ditto, stocks.  Etc.  

The Derivatives Beast Begins Growing Again! OTC Trades Resume

Japan’s Nikkei continues to self-destruct as China buys US corporations left and right while the US Wall Street con artists and gangstas revive the dreaded Derivatives Beast playing wild Ponzi gambling games using no capital base and waiting for the Fed to bail them all out again and again and again.  Time to snarl and snap about all this!  And we seem helpless to stop them.  Instead, we are debating sex, abortion, guns and other matters such as the need for FEMA.  Oh, by the way, a tornado passed to the north of my home last night.  We need FEMA functional.

Stupid Computer Trades By Goldman Sachs And JPMorgan Drove Stocks Off Cliff During AP Hack By Syrian Computer Geeks

 

Fake Tweet Erasing $136 Billion Shows Markets Need Humans:  No kidding!  The computers used by the big banks like Goldman Sachs and JPMorgan all are now hooked into the AP feed where these programs are set to ‘see’ bad news and instantly sell stocks with no human intervention.  These computer programs have repeatedly crashed the stock market with zero warning and are a huge hazard to the fair markets for the average investor.

Krugman Doesn’t Understand How Government Debt Flows Into Offshore Banks

Paul Krugman is the leading ‘expert’ (sic) for wild money printing and wild government spending as a cure for a huge credit bubble breaking.  Both the left and the right are wrong about what ails the world economic system.  We are drowning in a flood of red ink and money printing since the winners of world trade manufacturing exporting are those who destroy their home base currency making exports cheaper.  And the money produced by this flood of ZIRP lending by central banks flows instantly to offshore banks.  So far, $34 trillion sits there, outside of the economies the liberals want to grow via government debt.  This debt=more money in offshore accounts, less money at home.

Ellen Brown Doesn’t Understand How Banks Work: Deposit Insurance In US Different From Europe

The US is seeing huge inflation in food, fuel and medical care while near-ZIRP loans are being used to induce people to buy manufactured items, especially made overseas by cheaper labor.  Ellen Brown is VERY popular with people because she alternately gets hysterical about meaningless things or demands more money be printed and handed out like candy because this will ‘fix’ the bubble mess we are in.  People dislike it when I go after popular ‘alternative’ pundits but they are hazardous to our fiscal survival just like the NRA is pushing us off a cliff over guns.  One has to show some minimum sense!  And the history of banking is crystal clear: you cannot print money to fix a burst bubble, this only makes things worse.