The 441 TRILLION-Dollar Interest-Rate-Derivatives Time Bomb

:skidrow: What's a few trillion between friends.

The following is how Investopedia defines interest rate derivatives...

A financial instrument based on an underlying financial security whose value is affected by changes in interest rates. Interest-rate derivatives are hedges used by institutional investors such as banks to combat the changes in market interest rates. Individual investors are more likely to use interest-rate derivatives as a speculative tool - they hope to profit from their guesses about which direction market interest rates will move.

[link to www.investopedia.com]

Ok -- So I have a company matching 401K with a small nest egg after 13 years of work. What kind of funds should I move it to to make it safe? Please don't say cash it in as that's not an option as long as I'm working. I HAVE to leave it somewhere and right now it's balanced everywhere but more heavily in foreign stocks and REIT's.

Do you want to know the primary reason why rapidly rising interest rates could take down the entire global financial system?

Most people might think that it would be because the U.S. government would have to pay much more interest on the national debt.

And yes, if the average rate of interest on U.S. government debt rose to just 6 percent (and it has actually been much higher in the past), the federal government would be paying out about a trillion dollars a year just in interest on the national debt.

But that isn't it. Nor does the primary reason have to do with the fact that rapidly rising interest rates would impose massive losses on bond investors.

At this point, it is being projected that if U.S. bond yields rise by an average of 3 percentage points, it will cause investors to lose a trillion dollars.

Yes, that is a 1 with 12 zeroes after it ($1,000,000,000,000).

But that is not the number one danger posed by rapidly rising interest rates either.

Rather, the number one reason why rapidly rising interest rates could cause the entire global financial system to crash is because there are more than 441 TRILLION dollars worth of interest rate derivatives sitting out there.

This number comes directly from the Bank for International Settlements- the central bank of central banks.

In other words, more than $441,000,000,000,000 has been bet on the movement of interest rates.

Normally these bets do not cause a major problem because rates tend to move very slowly and the system stays balanced.

But now rates are starting to skyrocket, and the sophisticated financial models used by derivatives traders do not account for this kind of movement.

So what does all of this mean?

It means that the global financial system is potentially heading for massive amounts of trouble if interest rates continue to soar.

[link to www.blacklistednews.com]

Do you know how stupid this is? Not you, Gobias, but them!

They are willing to make a bet using someone else's money in such a way that it could bring an end to economics as we know it.

Who the fuck thinks like this????

money addicts & sociopaths

I certainly wouldn't count on it... This is a global heist - in progress.

You can hope for the best, but you'd be wise the prepare for the worst.

BUSTED: Bankers Caught On Tape, Joking About Bailout, And How They’d Never Pay It Back

[link to www.businessinsider.com]

They had us put in writing THAT ...... Should the USA default on the dollar or debt, THEY could collect by TAKING all US Government lands to satisfy same, and THAT MEANS about one third of all the USA ! PLUS, the government buildings.

Do you think people will go after real moneychangers this time or AGAIN...burn down poor jew family from the house next to "you"..."me".

If you see "money as debt", then as of October 14, 2011, the
total money in the world is more than $50,945,530,000,000.
[link to www.economist.com]

If you consider the Gross World Product then it would exceed
US$84.97 trillion as of 2012. [link to www.indexmundi.com]

So, in a nutshell, US$441 trillion exceeds all the money in
the world! It is inevitable of global economic collapse.
It is not a matter of IF, but WHEN...

All these figures exist in thin air they are an illusion. Derivatives are an illusion they aren't real.

And who might the "real moneychangers" be, eh?

Bump for someone actually being on point about the real underlying financial problems the current system is built upon.

The rest of the noise are mere symptoms of the disease.