Derivatives will bring financial Armageddon

The real horror story in world economic system is derivatives. It is a monetary gambling scheme using IOU’s backed by almost nothing. Those who buy derivatives are gambling and they use this phony paper wealth to create investment bubbles all over the worlds. Right now they are driving up commodities. When the derivative bubble bursts no government has anywhere near the resources to keep it from spiraling into financial Armageddon. it will bring the end of the world economic system. It is this bubble that keeps all the Federal bankers up nights. At some point this house of cards will crash the whole system.

Financial Armageddon: Not Plain Vanilla

In short, despite Buffett’s clear warnings, a massive new derivatives bubble is driving the domestic and global economies, a bubble that continues growing today parallel with the subprime-credit meltdown triggering a bear-recession.Data on the five-fold growth of derivatives to $516 trillion in five years comes from the most recent survey by the Bank of International Settlements, the world’s clearinghouse for central banks in Basel, Switzerland. The BIS is like the cashier’s window at a racetrack or casino, where you’d place a bet or cash in chips, except on a massive scale: BIS is where the U.S. settles trade imbalances with Saudi Arabia for all that oil we guzzle and gives China IOUs for the tainted drugs and lead-based toys we buy.