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Financial Weapons Of Mass Destruction: The Top 25 U.S. Banks Have 222 Trillion Dollars Of Exposure To Derivatives

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The recklessness of the “too big to fail” banks almost doomed them the last time around, but apparently they still haven’t learned from their past mistakes.  Today, the top 25 U.S. banks have 222 trillion dollars of exposure to derivatives.  In other words, the exposure that these banks have to derivatives contracts is approximately equivalent to the gross domestic product of the United States times twelve.  As long as stock prices continue to rise and the U.S. economy stays fairly stable, these extremely risky financial weapons of mass destruction will probably not take down our entire financial system.  But someday another major crisis will inevitably happen, and when that day arrives the devastation that these financial instruments will cause will be absolutely unprecedented.

During the great financial crisis of 2008, derivatives played a starring role, and U.S. taxpayers were forced to step in and bail out companies such as AIG that were on the verge of collapse because the risks that they took were just too great.

But now it is happening again, and nobody is really talking very much about it.  In a desperate search for higher profits, all of the “too big to fail” banks are gambling like crazy, and at some point a lot of these bets are going to go really bad.  The following numbers regarding exposure to derivatives contracts come directly from the OCC’s most recent quarterly report (see Table 2), and as you can see the level of recklessness that we are currently witnessing is more than just a little bit alarming…


Total Assets: $1,792,077,000,000 (slightly less than 1.8 trillion dollars)

Total Exposure To Derivatives: $47,092,584,000,000 (more than 47 trillion dollars)

JPMorgan Chase

Total Assets: $2,490,972,000,000 (just under 2.5 trillion dollars)

Total Exposure To Derivatives: $46,992,293,000,000 (nearly 47 trillion dollars)

Goldman Sachs

Total Assets: $860,185,000,000 (less than a trillion dollars)

Total Exposure To Derivatives: $41,227,878,000,000 (more than 41 trillion dollars)

Bank Of America

Total Assets: $2,189,266,000,000 (a little bit more than 2.1 trillion dollars)

Total Exposure To Derivatives: $33,132,582,000,000 (more than 33 trillion dollars)

Morgan Stanley

Total Assets: $814,949,000,000 (less than a trillion dollars)

Total Exposure To Derivatives: $28,569,553,000,000 (more than 28 trillion dollars)

Wells Fargo

Total Assets: $1,930,115,000,000 (more than 1.9 trillion dollars)

Total Exposure To Derivatives: $7,098,952,000,000 (more than 7 trillion dollars)

Collectively, the top 25 banks have a total of 222 trillion dollars of exposure to derivatives.

If you are new to all of this, you might be wondering what a “derivative” actually is.

When you buy a stock you are purchasing an ownership interest in a company, and when you buy a bond you are purchasing the debt of a company.  But when you buy a derivative, you are not actually getting anything tangible.  Instead, you are simply making a side bet about whether something will or will not happen in the future.  These side bets can be extraordinarily complex, but at their core they are basically just wagers.  The following is a pretty good definition of derivatives that comes from Investopedia

A derivative is a security with a price that is dependent upon or derived from one or more underlying assets. The derivative itself is a contract between two or more parties based upon the asset or assets. Its value is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes.

Those that trade derivatives are essentially engaged in a form of legalized gambling, and some of the brightest names in the financial world have been warning about the potentially destructive nature of these financial instruments for a very long time.

In a letter that he wrote to shareholders of Berkshire Hathaway in 2003, Warren Buffett actually referred to derivatives as “financial weapons of mass destruction”…

The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. Central banks and governments have so far found no effective way to control, or even monitor, the risks posed by these contracts. In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.

Warren Buffett was right on the money when he made that statement, and of course the derivatives bubble is far larger today than it was back then.

In fact, the total notional value of derivatives contracts globally is in excess of 500 trillion dollars.

This is a disaster that is just waiting to happen, and investors such as Buffett are quietly positioning themselves to take advantage of the giant crash that is inevitably coming.

According to financial expert Jim Rickards, Buffett’s Berkshire Hathaway Inc. is hoarding 86 billion dollars in cash because he is likely anticipating a major stock market downturn…

Far from a bullish sign, Buffett’s cash hoard could mean he’s preparing for a market crash. When the crash comes, Buffett can walk through the wreckage with his checkbook open and buy great companies for a fraction of their current value.

That’s the real Buffett style, but you won’t hear that from your broker or wealth manager. If Buffett has a huge cash allocation, shouldn’t you?

He knows what’s coming. Now you do too.

Warren Buffett didn’t become one of the wealthiest men in the entire world by being stupid.  He knows that stocks are ridiculously overvalued at this point, and he is poised to make his move after the pendulum swings in the other direction.

And he might not have too long to wait.  In recent weeks I have been writing about many of the signs that the U.S. economy is slowing down substantially, and today we received even more bad news

Despite high levels of economic confidence expressed by business owners and consumers, one key indicator shows that it has not translated into much action yet.

Loan issuance declined in the first quarter from the previous three-month period, the first time that has happened in four years, according to an SNL Financial analysis of bank earnings reports filed for the period. The total of recorded loans and leases fell to $9.297 trillion from $9.305 trillion in the fourth quarter of 2016.

This is precisely what we would expect to see if a new economic downturn was beginning.  Our economy is very highly dependent on the flow of credit, and when that flow begins to diminish that is a very bad sign.

For the moment, financial markets continue to remain completely disconnected from the hard economic data, but as we saw in 2008 the markets can plunge very rapidly once they start catching up with the real economy.

Warren Buffett is clearly getting prepared for the crisis that is ahead.

Are you?

  • aldownunder

    Cash is King at times like these

    • socalbeachdude

      100% correct, and the US dollar is the KING OF KINGS.

      • aldownunder

        Correct……for the time being


        10,000 worth of bitcoin back in 2010 is now worth 200 million usd….so glad I got on board. Cash is what? lol

        • socalbeachdude

          BitCON is the equivalent of Dutch Tulip Bulbs in 2017 and is headed for the BIGGEST CRASH OF ANY COMMODITY in the very near future.

          • whatelseisnew

            I’m amazed it’s even considered a commodity.

          • natxlaw

            WRONG. A Dutch tulip bulb can be replicated into more bulbs, a Bitcoin is one of 21,000,000 that will ever exist. Bitcoin is money, nothing else. It is money that a government cannot easily touch. Most importantly, it is money that can be used without paying the “financial services” sector a 5% cut for .01% of the population to enjoy, which is what you get with every major fiat currency right now.

          • moneywise

            Actually, they can and do partition single bitcoins. It is digital currency dependent on a digital infrastructure. As with all technological infrastructures, there are vulnerabilities. All it would take is another Mt. Gox scenario or power outage. The power grid is extremely vulnerably to attack. I wouldn’t trust my wealth to such a fragile system.

          • natxlaw

            so you do not have any bank accounts then? That is just numbers in the banking system. It would be bad for the price of bitcoin if a major exchange went down, but the coin itself is independent of any exchange. I could have the entire blockchain record on my computer if I wanted to give up 100GB of my space for it. If the bank goes down do you have a reccord of every transaction they have ever done in your computer?

          • socalbeachdude

            Laughably false. BitCON is nothing other than a PONZI SCHEME SCAM and the US government has declared it is NOT A CURRENCY AT ALL but rather a COMMODITY and any profits on it are therefore taxable at the 28% tax rate in the USA. Most importantly, nearly all of the use of BitCON is for speculative gambling and illegal transactions and the entire SCAM SHOULD BE SHUT DOWN.


            Im rich though 🙂

        • JC Teecher

          How much food can you buy with bitcoin?
          How many municipalities accept bitcoin for tax payments..aka property taxes?

          These are two things that are a must to comfortable survival. Shelter and food.
          If a person does not pay property taxes on real estate, it will not be long before the “eviction” notices hit the ole front door.

          • Paul Anders

            It doesn’t matter. It’s all about riding the wave and selling high.

          • socalbeachdude


          • JC Teecher

            Who and where, is anyone paying cash for bitcoin? So, you just accumulate more digital currency, of which the only way to sell higher is to digitally transfer for something of non-tangible value?
            I’m just asking, because I haven’t actually talked with anyone that is dealing in bitcoins.
            But, I sure hear a lot of people talking positive about it.
            Maybe it is like the persona that many people have that they are intelligent, but is actually just built around hype?

          • Paul Anders

            What have you got to lose by investing in them at this point?

          • Paul Anders

            Bitcoin and other crypto currencies (there are many) are traded just like stocks. Go to a broker, set up an account, and buy or sell what you want, when you want. It’s still early in the game for these and I’m sure most will drop out of the race but the big names like Bitcoin and Ethereum will more than likely stay around. People are not going to trust the governments after sheet hits the fan this time. I suggest you wait a bit and let them go down before jumping in because they’ve had a good run up lately but I can tell you 2 things. 1) Socalbitchdude is a pro government troll.
            2) Even if you put $1000 in and lose it all, what has the fed done to your money lately that’s any different? I suggest you make a leap of faith on this one and go long… (5 years or so). I don’t think you’ll be disappointed.

          • JC Teecher

            The fed hasn’t done anything to my money for the past 8 years. I sold real estate, not some digital fake wealth like bitcoin, just before the crash in the markets. I paid off all debts, and have lifetime free checking, of which I only use as a tool for keeping records of transactions. No savings accounts, and no stock portfolio.
            All my stock is in tangible assets and prepping goodies. I am prepared to live a full life of the grid like my grandparents had to do in their early lives.

            Bitcoin smichtcoin. the beast system will collapse all that digital crap when they pull the plug on the world economy and cause the collapse that brings about the full on beast one world system.
            Shelter, food, security will rule supreme, and the further out away from populated areas the better.
            You Paul, are speaking to a realist and a Christian that knows what is to come, I don’t have to speculate on my future existence.

          • Paul Anders

            Makes no difference to me what you do. The Fed systematically destroys currency…like it or not, your currency

          • socalbeachdude

            Absolutely false.

          • socalbeachdude

            Are you really that ignorant, dude?

            Bitcoin plunges $200 after cyber attackers demand ransom


          • ebliever

            Do you live in the boondocks somewhere? Even in my small town people are buying bitcoin. People see the value and are willing to try it out – maybe with a little discount at worst.

            Your great-grandfather bought gold and silver, your grandfather bought stocks, your father bought mutual funds, you are maybe buying ETFs. Your kids will invest in cryptocurrency. Indeed, markets of securities are already taking shape within cryptocurrency and ICOs are replacing IPOs.

          • JC Teecher

            Where I live, and how I grew up, has no influence on how, or what I invest.

            My priority is investing in the soon to come Kingdom Of God, that is eternal.
            First; just before that Kingdom fully comes to Earth via the return of Jesus Christ, there will be a system in place, that is being systematically built right now.
            That system is referred to by our Heavenly Father as the One World Beast System. It will be largely initiated, and operated via the United Nations, with a handful of shadow gov leaders calling the shots.
            What you and others do not realize, is there will only be one currency, be it digital, or what, but it will be cashless, which means even gold and silver will not be accepted as forms of trade.

            Small pockets of groups, or rural tribes/communities, will possibly barter with some silver and or gold, and maybe even with ammo, but all other forms will have no value.
            The Beast system of gov is all about control, and you or anyone else that participates in that system, and pledges allegiance to the ruling head, which will ultimately be the Antichrist, will submit any and all control to it.

            So ebeliever, you may accumulate tons of digital currencies and trading options of kind, but in the near future that will only be worth what the powers that be, say it will be worth.
            That worth, as you see it now, may become “worthless” when this system becomes a way of life for the najority of people.
            Why? Because the powers will see to it, that there are no more options available to the majority.
            Our little pockets of resistance, will be so obscure and unnoticeable, that we will go undetected for the short period of it’s existence.
            Without someone in these pockets having enough food supplies to maintain livelihood, it could not continue.
            Bitcoins, and digital currency not ordained by the Beast System, will not be allowed for payment of any kind.
            If you believe in your bitcoin, you can keep your bitcoin, but remember, to be effective; it has to have a functioning internet to work. One EMP, and the internet can be disabled for months and years, possibly a decade. What do you use for currency then?


            Buy low sell high… talking big money here

        • LIZ THE SHIZ

          Bitcoin can be hacked and brought down to zero , hope you can sleep at night

    • D.R.Phantom

      What a nonsense. At the beginning of 30s of the 20th century in Weimar Republic (Germany) paper notes (nominated to billions of Marks) were much cheaper than wall paper. The same could happen to US Dollar overnight.

      • socalbeachdude

        Laughably false and utter nonsense.

        • D.R.Phantom

          Ahem … Wait a bit.

      • aldownunder

        I think it will happen to the USD eventually but in reality the USD is the best of a bad lot and will be the last to fall

  • Duh Doi

    Comment Thread Hijacked By Socalbeachtard in 10…..9……8…….7……6…….5…….4…….3…….2……1………………………………………………………………………………………………..

    • Unfortunately, the SocalBeachTard doesn’t understand a thing about what he’s writing. I doubt that he has much of any kind of financial experience of any kind.

      The problem isn’t the derivatives. The problem is the repeal of Glass-Steagall, that allowed banks to mingle their banking business with their investment business.

      Derivatives have ALWAYS had a necessary and important place in our financial structure. Otherwise, farmers and commodity suppliers would find it harder to survive.

      But, the SocalBeachTard is having too much fun, waving his arms and running around with his hair on fire.

      Vaya con dios, everybody.

      John Little

      • socalbeachdude

        Laughably false.

  • socalbeachdude

    The “New” Financial Weapons of Mass Destruction

    According to Goldman, a mere 10 stocks — 10 stocks — account for almost half the S&P’s gains for the year.

    Forty-six percent, to be precise.

    This year’s bull’s-eye stocks are the so-called FAANGs — Facebook, Amazon, Apple, Netflix and Google.

    Rounding out the top 10 are Visa… Philip Morris… Oracle… Home Depot… and Broadcom.

    Most other stocks are zeroes — or worse.

    David Stockman in yesterday’s reckoning:

    “During the last 70 days, the FAANGs have gained $260 billion in value, while the other 495 companies in the S&P 500 have lost an identical amount… Other than the five FAANG stocks, the market has been silently collapsing since March 1.”

    Meanwhile, recent data from Fundstrat Global Advisors reveal that just 40 stocks out of 500 — 8%, that is — account for some 85% of the S&P’s gains this year.

  • socalbeachdude

    Derivatives involve less than 1% of their notional (face amount) in actual premiums paid for them and are nothing other than GAMBLING BETS and can all be voided. Derivatives are NOT DEBT of any sort at all and have nothing whatsoever to do with the $67 trillion of total debt outstanding in the US of which $20 trillion is federal government debt.

    Derivatives are essentially gambling bets against the public interest and as such can all simply be VOIDED OUT when push comes to shove.

    • srknox

      How? How can they be voided out and original premiums returned when push comes to shove what? Derivatives are weapons of mass destruction . You describe them as a megal mean of acquiring and managing. There’s a differing contractual new world finance order coming that has nothing to do with financial academia or economics. Move forward in thinking.

      • socalbeachdude

        A push comes to shove situation would arise in the event of HUGE LOSSES for which an issuer wanted a bailout (like with AIG) at which time the ONLY APPROPRIATE RESPONSE FROM THE US GOVERNMENT SHOULD BE TO VOID OUT THE DERIVATIVES CONTRACTS as they are a violation of the public interest and are nothing but gambling bets.

  • Guest

    “Warren Buffett is clearly getting prepared for the crisis that is ahead.

    Are you?

    How? None of your readers have even a fraction of the wealth that Buffett has. We are all paupers compared to men like Buffett, Bezos, Gates, Ellison, et. al.

    • socalbeachdude

      Nearly all of those folks so-called “wealth” comes entirely from ABSURDLY ELEVATED STOCK VALUATIONS and when the stock markets crash they will have massive losses.

      • Guest

        Uh, did you even read the article? Buffett is sitting on over 80 billion in cash?

        Come on, man.

        • socalbeachdude


          As a general rule these days corporations have FIVE TIMES AS MUCH DEBT AS THEY HAVE IN THE WAY OF CASH. Are you somehow not aware of that fact?

          • explain please

            Who cares about the debt? Obviously not them. The banks that had mega debt just got bailed out with more debt. How is it not the same thing with the independently wealthy?

          • socalbeachdude

            You must have zero comprehension of full general ledger accounting. All accounting is classified into 5 accounts:

            1) Assets
            2) Liabilities
            3) Capital / Equity
            4) Income
            5) Expenses

            If your liabilities including debt exceed your assets then you become INSOLVENT. Debt is a major component of liabilities.

            No banks got “bailed out with more debt” at all and there was NO NET COST AT ALL FOR THE SHORT TERM LOANS MADE BY THE US government during the 2008-2009 period and banks were NEVER “GIVEN” ANY MONEY at all, but rather HIGH INTEREST LOANS WERE FORCED ON THEM and those were repaid as soon as financial concerns were allowed to repay them.

          • Followthemoney

            Then America as a nation is insolvent, including all central banks. With what capital was the debt paid off? I swear, every time I make a deposit at the bank they offer me a business loan. The want to create more money to introduce into the market. Financial institutions hide liabilities by repackaging debts and then trade the debts and liabilities, in essence creating money from nothing. It’s like playing hot potato, except the potato gets bigger and hotter as time passes.

          • socalbeachdude

            Yes, the USA government is indeed INSOLVENT with debt liabilities of more than $20 trillion alone and assets of less than $4 trillion. Way beyond insolvent! Vastly worse than Puerto Rico. The markets do not appear to realize this rather inconvenient fact quite yet…

          • scarytruth

            I think some realize it but have all their eggs in the world stock market basket. There really is no way to avoid exposure to the consequence that that would arise from a failure of the world stock market. Fear is what is motivating growth right now. If people pulled out it would be an instant collapse. Only the first few high-frequency traders would make it out with anything, then there would be a bank holiday and everybody could kiss their retirements goodbye.

          • socalbeachdude

            Yep, and that has really been the case ever since March 2009 and yet HOPIUM AND FALSE PERCEPTIONS have ruled the day and the markets ever since then, haven’t they?

          • TrueTrueTrue

            Of course, the show must go on. The music is still playing on the Titanic. But make no mistake, this ship is going down as soon as there is some sort of black swan iceberg event. Hopium….I like that…

    • socalbeachdude

      World’s 500 Richest People Lose $35 Billion From Trump Turmoil

      The world’s richest people lost $35 billion Wednesday when global equity markets were rocked by political turmoil in the U.S., according to the Bloomberg Billionaires Index.

      Bill Gates, the world’s richest person with $86.8 billion, lost $1 billion as shares of Microsoft Corp., his largest holding, tumbled 2.8 percent, the most in almost a year. Inc. co-founder Jeff Bezos, who came within $4 billion of taking the top spot from Gates earlier this week, dropped to No. 3 after losing $1.7 billion as shares of the online retailer slid 2.2 percent. Spanish retailing tycoon Amancio Ortega lost $355 million to end the day in the second position with $83.2 billion.

  • socalbeachdude

    Derivatives are largely an unregulated SWAMP and are supposed to be a ZERO SUM GAME. All forms of derivatives are SPECULATIVE GAMBLING BETS and the total nominal (face) amount is now around $1 QUADRILLION but the actual amount of money involved is about 1% of that in actual fact as that 1% accounts fully for the ACTUAL PREMIUMS PAID (similar to insurance) to place those speculative bets.

    The single largest concentrated derivatives exposure is held by JPMC (JP Morgan Chase) with a nominal value of around $75 trillion. JPMC is the largest bank in the US with assets and liabilities of around $2.4 trillion, and there is substantial reason for concern in any bank having derivative face value holdings far in excess of its assets / liabilities.

    In my opinion, ALL DERIVATIVES SHOULD BE STRICTLY REGULATED and should not be allowed to be held by any commercial retail banks, but that is not the way it presently is in the world of derivatives.

    • srknox

      With all due respect how can weapons of mass destruction be regulated when they can push the button

      • srknox

        Dude we’re sunk, game set, match, over. If you’d like to school everyone in the law as being, yah but naw, really truly try being enlightened. TPTB don’t give damn about your understanding of what they’re doing evilly wrong. In fact your ignorance helps them get away with their collapse agenda You just exposed THEIR evil game. Now you want the jus us league to correct it? Like you figure out what’s wrong and expect them or you or I or anyone else to stop it? When there’s a flood, there’s a risk, when the water reaches your throat do you have a desire to report about the hazard or do you f in run for you and yours lives? Your feet are wet. Get a clue. Report back when you’ve made it to high ground. And then let’s hear your report.

        • socalbeachdude


    • srknox

      Well I do appreciate your intellect and your caring for explaining how the game was rigged.

  • JC Teecher

    Icebergs grow before they have a meltdown.
    These big bank derivatives are growing and growing because there is “seemingly”, unlimited gamblers willing to wager on all sorts of so-called “securities”.

    Stocks, bonds,commodities, and currencies are risky enough, but; when one throws interest rates and market indexes onto the pile, whe-yuuu, does it get top heavy, and vulnerable.

    Just take a look at Deutsche Bank: (from a June 2015 srticle)

    “Deutsche Bank is the second largest investment bank in the world. Cumulatively its assets are worth 2 trillion EUR and deposits peak over 570 billion EUR.

    The real problem of Deutsche Bank is its exposure on derivative market. The sum of just under 55 trillion EUR is 20 times bigger than the GDP of Germany. Majority – 70% – of all derivatives are interest rate derivatives and they are secured with government bonds.”

    Although they peaked at nearly 75 trillion in derivatives, and have “shrunk” (a very relative word), to around 47 trillion or less????

    Jim Willie says….”if Deutsche Bank goes down, it will be Lehman TIMES FIVE:”
    ” If it fails, it will take along with it 3,4,5,6 or 10, or 15 other banks! ”

    In a recent report by Tyler Durden dated April 30th, 2017:

    “…. according to the latest update from Deutsche Bank, Japan’s revulsion to fixed income products has accelerated, and the Pacific island was a net seller of foreign bonds again in the past week, divesting another $12bn worth of securities. It was not only the third straight week of selling out of Japan, according to MOF data, but more remarkably, the the year-to-date divestment of $66bn in foreign bonds YTD is the biggest since 2002, the first full year of such data is available.”

    I stated in an article that I posted a couple years ago, (another site), that I had a gut feeling that a trigger for financial institutions collapse, and possibly a lead up, to worldwide economic depression and possibly collapse, would be triggered by Japan. Could it be possible that the current sell off of securities will continue and lead to a further weakening of Deutsche bank, and then failure????

    Time will tell, but time is something non-preppers don’t have a whole heck of a lot of.

    • JC Teecher

      Just to add, from a recent article from Dave Hodges:

      “We, the United States people, owe the bankers through the bail outs due to the failed credit swap derivatives debt, $1.5 quadrillion.
      The interest alone on the bail-outs is $505 trillion dollars per year.”

      • PocoPete

        Wouldn’t that be inflationary?

        • fleecedtoolong

          It is. It’s hidden. I keep hearing about no inflation but I see it in rising food prices, shrinking sizes of packaged goods, plastification of products(everything being made with cheaper material), cutting production costs by shipping labor overseas, and cutting labor force(unemployment).

          • socalbeachdude

            Food prices have FALLEN dramatically last year and this year as have energy prices.

            As to DEFLATION, Rex Nutting at MarketWatch recently noted:

            Energy and food prices are down in the past year. Many manufactured goods are cheaper now than a year ago.

            Here are some specifics:

            Beef down 6% from Feb. 2015 to Feb. 2016.
            Pork down 7.3%.
            Chicken down 4%.
            Milk down 5%.
            Coffee down 1.5%.
            Gasoline down 20.7%
            Fuel oil down 32.1%
            Electricity down 3%
            Natural gas down 10.3%
            Household furnishings down 1.0%, appliances down 5.7%, Furniture down 0.6%
            Car parts down 0.4%
            Televisions down 15%
            Toys down 7%
            Computers down 7.9%
            Phones down 16.2%
            Air fares down 1.8%
            Wireless phone services down 0.3%
            Internet access down 0.7%.


          • peaceout

            I can’t believe you trust those statistics. You’re smarter than that. I am speaking from experience, I don’t need statistics to know that the price of everything has been going up. Main Stream Media is created for propaganda. Follow the money, find out who owns the major news corporations of the world, then you’ll find the truth. Love you bro

          • socalbeachdude

            Those statistics are ALL CORRECT just as stated and both food and energy prices have fallen significantly over the past 2 years throughout the US.

          • PocoPete

            The government has a vested interest in underestimating inflation. The way that the government calculates inflation has changed more than 20 times since 1978. The government is constantly looking for ways that it can make inflation appear to be even lower. If inflation was measured the same way that it was back in 1990, the inflation rate would be about 6 percent right now. If inflation was measured the same way that it was back in 1980, the inflation rate would be about 10 percent right now. But instead, we are expected to believe that the inflation rate is hovering around 2 percent (CPI-U according to the Bureau of Labor Statistics).

          • socalbeachdude

            What does that have to do with the fact that ENERGY COSTS HAVE PLUNGED DOWNWARDS by around 50% over the past 3 years and food costs are also down significantly as stated above with specific prices given for that?

          • PocoPete

            If you strip out volatile food and energy prices, inflation only rose at a rate of 1.6%. Housing expenses and medical care costs pushed higher.

          • socalbeachdude

            Then those prices all PLUMMETED and are much lower today one year later as the GLOBAL DEFLATIONARY SPIRAL continues to rapidly intensify.

          • PocoPete

            According to the United States Department of Agriculture website,

            “This page provides the following information for April 2017:

            Consumer Price Index (CPI) for Food (not seasonally adjusted)

            Producer Price Index (PPI) for Food (not seasonally adjusted)

            Consumer Price Index (CPI) for Food (not seasonally adjusted)

            The all-items Consumer Price Index (CPI), a measure of economy-wide inflation, was up 0.3 percent from March to April 2017 and is 2.2 percent above the April 2016 level. The CPI for all food rose 0.2 percent from March to April, and food prices were 0.5 percent higher compared with the April 2016 level. The degree of food price inflation varies depending on whether the food was purchased for consumption away from home or at home.

            The food-away-from-home (restaurant purchases) CPI was up 0.2 percent in April and is 2.3 percent higher than April 2016; and

            The food-at-home (grocery store or supermarket food items) CPI rose 0.2 percent from March to April but is still 0.8 percent lower than last April.

            Food-at-home prices declined overall in 2016, falling 1.3 percent below 2015 levels. This marks the first annual decline in supermarket prices since 1967. Looking at specific retail food categories, prices declined 21.1 percent for eggs, 6.3 percent for beef and veal, 4.1 percent for pork, and 2.3 percent for dairy and related products. However, not all foods declined in price—fresh fruit prices rose 2.2 percent and other foods rose 0.3 percent compared with 2015 prices.

            The overall decline in retail food prices was due to several factors: increased production for many commodities, lower transportation costs as a result of deflated oil prices, and a strong U.S. dollar. A strong dollar affects domestic prices as it makes U.S. goods less desirable to foreign markets, leaving more potential exports on the domestic market.

            While food-at-home prices declined in 2016, prices for food away from home increased 2.6 percent. Restaurant prices have been rising consistently month-over-month due, in part, to differences in the cost structure of restaurants versus supermarkets or grocery stores. Restaurant prices primarily comprise labor and rental costs with only a small portion going toward food. For this reason, decreasing farm-level and wholesale food prices have had less of an impact on restaurant menu prices.

            ERS revises its food price forecasts if the conditions (such as the feed grain crop outlook or weather-related crop conditions) on which they are based change significantly.

            Looking ahead to 2017, supermarket prices are expected to rise between 0.0 and 1.0 percent. Despite declining prices in 2016, poultry, fish and seafood, and dairy prices are expected to rise in 2017. These forecasts are based on an assumption of normal weather conditions throughout the remainder of the year; however, severe weather or other unforeseen events could potentially drive up food prices beyond the current forecasts. In particular, drought conditions throughout the U.S. could have large and lasting effects on fruit, vegetable, dairy, and egg prices. Also, a stronger U.S. dollar could continue to make the sale of domestic food products overseas more difficult. This would increase the supply of foods on the domestic market, placing downward pressure on retail food prices.

            Changes to Food Category CPI Forecasts

            The food-at-home CPI is an average of individual food CPIs, weighted by their relative importance or share of consumer expenditures.

            Prices for poultry fell 0.3 percent from March to April and are 0.9 percent lower than last year. Retail chicken price inflation has remained relatively low in 2017 partly due to an increase in broiler production. Furthermore, a strong U.S. dollar contributed to more chicken broilers remaining in the U.S. market which, in turn, places downward pressure on retail chicken prices. However, as the industry recovers from lower 2016 retail prices, ERS predicts prices to rise between 0.5 and 1.5 percent in 2017.

            Egg prices increased 0.3 percent from March to April but are 15.8 percent below April 2016 levels. Retail egg prices are among the most volatile retail food prices, as they can be affected by seasonal demand. There was an upswing in 2015 that was primarily due to the Highly Pathogenic Avian Influenza (HPAI) outbreak, which decreased the table-egg-laying flocks by 36 million egg layers in the second quarter of 2015. In the first quarter of 2016, egg production was down due to smaller flock sizes and lower egg-laying rates per bird. As the industry recovered from this outbreak, with production close to pre-flu levels, egg prices fell 21.1 percent in 2016. ERS expects egg prices to decrease an additional 5.0 to 4.0 percent in 2017.

            See Changes in Food Price Indexes, 2015 through 2017.

            Key Month-Over-Month Changes in the Food CPI

            Beef and veal prices increased 0.5 percent from March to April but are still 4.2 percent lower than this time last year. The increased pace of cattle slaughter, especially during the second half of 2016, coupled with increased carcass weights, has resulted in higher year-over-year beef production. This higher production and the large supplies of beef held in cold storage have resulted in downward pressure on prices throughout the cattle and beef complex. Prices of both feeder and fed cattle trended lower for most of 2016. These lower prices started to spill into the retail market around August 2016, continuing their downward spiral since then. Prices are expected to continue to decline in the near future. ERS predicts beef and veal prices to decrease an additional 2.5 to 1.5 percent in 2017.

            In April, pork prices fell 1.1 percent from the previous month, largely due to a 4.9-percent decrease in ham prices and a 1.8-percent decrease in prices for pork chops. However, bacon prices continued to rise in April, increasing 0.2 percent. Retail pork prices fell in 2016, largely due to ample supplies of other animal proteins available for domestic consumption. Lower beef prices are most likely adding pressure to lower pork prices. USDA forecasts a 4.9-percent increase in pork production in 2017, and large pork supplies are expected to drive retail prices down an additional 2.0 to 1.0 percent in 2017.

            Prices for dairy products decreased 0.3 percent in April and are 0.2 percent lower than they were in April 2016. Retail milk prices have decreased month-over-month—down 1.3 percent from March to April. Retail milk prices were up year-over-year, increasing 0.1 percent. Between March and April 2017, prices for ice cream and related products declined—prices for ice cream product prices were down 0.8 percent since March. Retail dairy prices declined 2.3 percent from 2015 to 2016, following global patterns. However, dairy imports have declined from very high levels in the first quarter of 2016, and exports are expected to strengthen for products with high skim-milk content (for example, nonfat dry milk and whey products). Domestic demand for most dairy products has recently been below previous annual levels but is expected to recover during the year. ERS expects retail dairy product prices to rise between 1.0 and 2.0 percent in 2017.

            Fats and oils prices fell 0.1 percent from March to April and are down 0.2 percent since April 2016. Butter prices decreased 1.6 percent from March to April, salad dressing prices fell 2.2 percent, but peanut butter prices were up 0.9 percent. ERS predicts fats and oils prices to decrease an additional 1.5 to 0.5 percent in 2017.

            Prices for fresh fruits increased 1.6 percent from March to April and are up 1.1 percent compared with April 2016. ERS expects fresh fruit prices to increase 0.0 to 1.0 percent in 2017. Fresh vegetable prices rose 3.4 percent from March to April, and prices are 1.8 percent higher than April 2016. Lettuce prices increased by 13.8 percent from March to April and are now 14.3 percent higher than the April 2016 level, resulting from heavy rains in California during the early months of 2017 that forced delays in planting and harvesting. ERS expects fresh vegetable prices to decrease between 1.5 and 0.5 percent in 2017. Factors, such as a stronger U.S. dollar and low oil prices, have mitigated the effect of the drought on retail fresh produce prices throughout 2016. For more detailed information on the California drought, see California Drought: Food Prices and Consumers.

            In April, prices for cereals and bakery products decreased 0.1 percent compared with the previous month and are 0.8 percent lower than they were in April 2016. Prices for breakfast cereal fell 0.1 percent, retail rice prices fell 0.5 percent, and prices for flour and prepared flour mixes fell 1.6 percent from March to April. Due to an increase in farm-level wheat prices and a decreased forecast of wheat imports, ERS expects cereals and bakery products prices to rise between 0.5 to 1.5 percent in 2017.

            Prices for nonalcoholic beverages decreased 0.1 percent from March to April and are down 0.2 percent since April 2016. Carbonated beverage prices decreased 0.5 percent from March to April, but prices for coffee rose 0.7 percent over the same period. ERS predicts nonalcoholic beverage prices to increase 0.0 to 1.0 in 2017

            Producer Price Index (PPI) for Food (not seasonally adjusted)

            The Producer Price Index (PPI) is similar to the CPI in that it measures price changes over time. However, instead of measuring changes in retail prices, the PPI measures the average change in prices paid to domestic producers for their output. The PPI collects data for nearly every industry in the goods-producing sector of the economy. Of particular interest to food markets are three major PPI commodity groups—unprocessed foodstuffs and feedstuffs (formerly called crude foodstuffs and feedstuffs), processed foods and feeds (formerly called intermediate foods and feeds), and finished consumer foods. These groups give a general sense of price movements across the various stages of production in the U.S. food supply chain.

            The intermediate and final demand PPIs—measures of changes in farm and wholesale prices—are typically far more volatile than their counterparts in the CPI. Price volatility decreases as products move from the farm to the wholesale sector to the retail sector. Due to multiple stages of processing in U.S. food systems, the CPI typically lags movements in the PPI. Examining the PPI is thus a useful tool in understanding what may happen to the CPI in the near future.

            ERS does not currently forecast industry-level PPIs for unprocessed, processed, and finished foods and feeds, but these have historically shown a strong correlation with the all-food and food-at-home CPIs. Unprocessed foods and feeds posted a monthly decrease of 1.4 percent from March to April, prices for processed foods and feeds fell 0.1 percent, but finished consumer foods rose 1.5 percent over the same period.

            Inflationary pressures lessened for farm-level cattle and wholesale beef prices in 2016 and are expected to continue to be low in 2017. In April, cattle prices decreased 0.5 percent and are down 5.9 percent since this time last year. Alternatively, wholesale beef prices increased in April, rising 1.9 percent, but are down 10.1 percent from the previous year. ERS expects farm-level cattle prices to change between -0.5 to 0.5 percent in 2017, and wholesale beef prices are expected to decline 6.0 to 5.0 percent.

            Wholesale pork prices fell 3.9 percent from March to April but are 0.3 percent higher than this time last year. Overall, pork production is higher, placing downward pressure on prices in 2016—wholesale pork prices declined 2.1 percent. However, ERS predicts wholesale pork prices to decrease 2.0 to 1.0 percent in 2017.

            Prices for farm-level eggs increased 7.8 percent from March to April. Price levels are now 12.2 percent lower than April 2016 levels. Egg prices are among the most volatile of food prices, typically peaking in the fourth quarter of the year and then falling in the first quarter of the new year. In 2015, prices were also affected by HPAI, which reduced the count of table-egg-laying birds in many Midwestern and Pacific Northwestern States. As the industry recovered, farm-level egg prices decreased 59.1 percent in 2016. ERS predicts farm-level egg prices to increase an additional 2.0 to 3.0 percent in 2017.

            Farm-level soybean prices decreased 5.9 percent from March to April and are 1.2 percent below the April 2016 price level. Wholesale fats and oils prices decreased on the month, falling 0.1 percent in April, but are 8.1 percent higher than April 2016 price levels. Farm-level soybean prices rose 2.9 percent in 2016 and are expected to increase an additional 0.0 to 1.0 percent in 2017. Prices for wholesale fats and oils decreased 0.8 percent in 2016, but ERS expects prices to rise 2.0 to 3.0 percent in 2017.

            Farm-level fruit prices rose 20.7 percent in April and are 26.1 percent higher than in April 2016. This was the largest monthly increase in farm-level fruit prices since December 2006 when prices rose 24 percent above the previous month’s level. Farm-level vegetable prices also rose in April, increasing 28.5 percent. Farm-level vegetable prices are now 41.5 percent higher than they were this time last year. Farm-level fruit prices are expected to increase 1.0 to 2.0 percent in 2017. Farm-level vegetable prices are expected to decrease 5.0 to 4.0 percent in 2017.”

          • socalbeachdude

            I would suggest they update their price estimates to REFLECT MUCH LOWER PRICES that are available all of the time at the grocery stores of America!

            US crude settles at $48.90, tumbling nearly 5%


            Memorial Day gas prices set to be 22% cheaper than average


          • socalbeachdude

            What does any of that have to do with the numbers I stated above? There is PRACTICALLY NO INFLATION AT ALL and the prices of many goods and service are now falling significantly.

          • PocoPete

            The current inflation rate for the US is 2.2% for the 12 months ending in April 2017, as published on May 12, 2017 by the U.S. Labor Department.

          • JC Teecher

            Exactly. One of the slickest tools by producers/marketers is the ever decreasing amounts in the packaging.
            As a frugal shopper, because of being on a fixed income, I am constantly checking the price per lb./once/unit. Sometimes the packages/carton is the same size, but the total amount of contents/net weight/net pieces has been reduced.

            It is like a drug dealer that weighs out dope, and then skims a little off the top, of which the purchaser usually has no clue about. Eventually, the dealer has compiled an extra unit to sell,, and the customer is none the wiser.

          • Capitalist Stock Market Master

            Why should unions dictate prices. Why do adults over 50 complain all the time about being discriminated against in the workplace, when that is not the case. Why do people not understand derivative instruments? Why do people detest the stock market?

            These are questions that, while incredibly easy to answer, elude those who are dull.

          • PocoPete

            I don’t know.

      • socalbeachdude

        Laughably false and bogus disinformation.

  • PocoPete

    Gold will be a good investment when the stock market crashes.

    • forgetgold

      Dependable water and food supply would be even better. Can’t live of of gold. Gold only has value because all of our other needs are taken care of. When food and water is scarce nobody will care about gold and silver. Gold is mined every year, it is not a rare element. Just like diamonds, there is a false scarcity. Food and clean water is really hard to produce for 7 billion starving people.

      • socalbeachdude

        Indeed, and gold is already crashing along with nearly all of the other metals.

        • PocoPete

          All fiat money systems in history have failed. The US dollar will be no different.

          “Gold Is Money, Everything Else Is Credit” – JP Morgan.

          • socalbeachdude

            That quote is as obsolete as JP Morgan is dead and was made over 100 years ago. Gold has NO FINANCIAL RELEVANCE whatsoever in today’s electronic monetary systems in the world today in 2017 and is just a little niche fungible collectible commodity subject to a 28% capital gains tax rate in the USA on any gains. As to losses you can only deduct a maximum of $3,500 per year on capital losses.

          • PocoPete

            Gold retains its value not only in times of financial uncertainty, but in times of geopolitical uncertainty. It is often called the “crisis commodity,” because people flee to its relative safety when world tensions rise; during such times, it often outperforms other investments.

          • aldownunder

            Yes but you must hold physical not paper

          • socalbeachdude

            It doesn’t matter a hoot what form of gold you have. An ETF is keyed off the SPOT PRICE of gold just like if you had the metallic stuff.

          • PocoPete

            We’re watching the beginnings of “de-dollarization” in trade between Russia and China. Up to now, there has never been anything approaching a serious challenge to the global supremacy of the dollar — certainly not in global trade. Yet here we are, watching Russia and China set up a proto-trading system based on gold. The daily quote for gold seems not to price in even a hint of this development. Sooner or later, we may see more and more countries break away from the dollar collar and join the gold-trading world. In that case, gold prices will soar and shares in well-run gold mining companies will explode upward.

          • socalbeachdude

            What utter nonsense and such totally stupid and bogus assertions. The total value of the gold owned by both Russia and China is less than $200 billion in a global economy of more than $72 trillion in GDP. Are you really so utterly ignorant as to those facts?

          • PocoPete

            “QE to Infinity, followed by Gold balancing the balance sheets of the sovereign balance sheet disasters. Just as there is no tool other than QE to feign financial solvency, there is no tool to balance the balance sheet of the offending entities other than Gold. It is just that simple.” –Jim Sinclair

          • socalbeachdude

            Jim Sinclair is a FOOL and just a DESPERATE GOLD SPECULATOR who attempts to con people into buying gold mining leases in Kenya. Are you not aware of those facts regarding Sinclair?

          • PocoPete

            Legendary Gold Market Trader Jim Sinclair is one of the most respected analysts in the precious metal community. He is most notable for calling the top in the 1980s Gold Bull Market to the day.

            But it does not really matter who Sinclair is. You can make of Sinclair whatever you want but the statement on the merits of gold as an investment stands on its own.

          • socalbeachdude

            Jim Sinclair is a BANKRUPT BOGUS PUSHER OF GOLD MINING LEASES and is regarded as an IDIOT within the gold community. Everybody and anybody could have easily predicted the laughable high of $850 for gold back in 1980 after which it spent the NEXT 22 YEARS PLUNGING 70% down to $250 per ounce from its laughably manic speculative high.

          • PocoPete

            A web search on Jim Sinclair did not produce any mention of him being bankrupt or any critical mention of his business practices.
            Not everyone predicted the gold peak in 1980. Of course, If everyone had predicted $850 gold then the price of gold would never have reached $850.

          • socalbeachdude

            It was obviously to ANYONE AND EVERYONE – except apparently to a tiny little group of IDIOT MANIC SPECULATORS – that $850 per ounce was an absurd and preposterous price for gold and that it was headed to a huge crash. Which, of course, is exactly what it did for the next 22 years up until 2001 when it reached $250 per ounce.

            At any price above $456 per ounce gold is preposterously overvalued and that speculative froth will rapidly be blown off the top.


            An array of reasonable historical metrics can be used to establish the proper price of gold, including:

            1) Its historical mean which would put gold right around $456 per ounce

            2) Its 16:1 historical ratio against silver which would put gold right around $276.48 per ounce based on silver being around $16.60 per ounce

            3) Its inflation adjusted price today from its last stable historical price of $35 per ounce in 1971 which would put gold right around $386 per ounce.

            4) Its current official US government price of $42.22 per ounce which is how the approximately 8200 metric tonnes of US government gold are valued:


          • socalbeachdude

            GOLD IS OF NO FINANCIAL RELEVANCE WHATSOEVER in today’s world and the total value based on the laughably elevated spot price of gold of around $1248 per ounce of the US Treasury’s 8,200 or so metric tonnes of gold is less than $350 billion which is less than 3 months of the current federal government deficit.

          • PocoPete

            Gold is money… because it is durable, divisible, convenient, consistent, valuable, and cannot be created out of thin air by the government.

            Gold is so important that Western central banks — particularly the U.S. Treasury and its Exchange Stabilization Fund, the Federal Reserve, and allied central banks — rig the gold market every day, even hour by hour, to control and usually suppress gold’s price.

            Why do Western central banks rig the gold market?

            It’s because gold is a powerful competitive international currency that, if allowed to function in a free market, will determine the value of other currencies, the level of interest rates, and the value of government bonds. Gold’s performance is usually the opposite of the performance of government currencies and bonds. Hence central banks fight gold to defend their currencies and bonds.

            The problem is that central bank tactics in this fight affect more than gold; they affect markets generally and eventually destroy markets generally.

          • socalbeachdude

            Laughably and totally false assertions. The US government through the US Treasury owns the LARGEST STOCK OF GOLD IN THE WORLD and has over 8,000 metric tonnes of the stuff out of the total of around 180,000 metric tonnes ever mined. However, the total value of all of the gold ever mined even at today’s absurdly elevated market prices of around $1270 per ounce is worth less than $7 trillion at a time when the world’s total assets are worth around $700 trillion making the total value of all gold only about 1% of global assets. The value of gold is just a TINY LITTLE SPECK OF DUST compared to the world’s assets.

          • socalbeachdude

            Gold does no such thing at all particularly when it is a MANIC SPECULATIVE BUBBLE at any price above its mean of $456 per ounce. Gold has plunged more than $700 per ounce since its manic speculative high of $1927 per ounce reached on September 5, 2011 which is a LOSS OF 36% in value.

          • PocoPete

            As the debt bubble deflates it will push money out of bonds and interest-bearing assets such as CDs and dividend paying stocks, and into hard assets such as gold. This will push the gold price well above $10,000. If we consider them together the possible upside in the gold market becomes unfathomable, and at that point the discussion almost becomes ludicrous because we are talking about a market that can multiply 10 times in value easily (and probably more), versus a downside risk of $1,100/ounce, or if the bears get one more short term victory we could see the $1,000/oz. level tested. Few assets possess such an asymmetric risk/reward opportunity and one has to conclude that buying gold at current prices is an extremely wise decision.

          • socalbeachdude

            What utter nonsense. The supposed money in stocks SIMPLY EVAPORATES as their market valuation crashes. Gold is on its way towards and to its mean of $456 per ounce and then headed lower to perhaps as low as $232 per ounce or even lower. Get a clue, dude.

          • socalbeachdude

            What utterly laughable and totally bogus nonsense. Gold is on its way towards and to its mean of $456 per ounce and then headed lower to around $232 per troy ounce or perhaps even lower as that little niche commodity junk collapse right along with all other commodities.

          • PocoPete

            Dow 1/4/1971 – 830
            Dow 5/17/2017 – 20607
            Dow up +2483%

            Gold 1/4/1971 – $35
            Gold 5/17/2017 – $1261
            Gold up +3602%

          • socalbeachdude

            Gold is a PREPOSTEROUS AND ABSURDLY OVERPRICED fungible little niche commodity and is headed towards and to its mean of $456 per ounce and then much lower.

            At any price above $456 per ounce gold is preposterously overvalued and that speculative froth will rapidly be blown off the top.


            An array of reasonable historical metrics can be used to establish the proper price of gold, including:

            1) Its historical mean which would put gold right around $456 per ounce

            2) Its 16:1 historical ratio against silver which would put gold right around $276.48 per ounce based on silver being around $16.60 per ounce

            3) Its inflation adjusted price today from its last stable historical price of $35 per ounce in 1971 which would put gold right around $386 per ounce.

            4) Its current official US government price of $42.22 per ounce which is how the approximately 8200 metric tonnes of US government gold are valued:


          • PocoPete

            Standby. My comment is waiting to be approved by the moderator.

          • JMiller

            You can only deduct a maximum of $3,000 per year on capital losses, not $3500, but any losses above $3000 in any year can be carried over to the following year.

          • socalbeachdude

            Correct, and I changed that above. If your capital losses exceed your capital gains, the excess can be deducted on your tax return and used to reduce other income, such as wages, up to an annual limit of $3,000, or $1,500 if you are married filing separately.

          • socalbeachdude

            That quote is as obsolete as JP Morgan is dead and was made over 100 years ago. Gold has NO FINANCIAL RELEVANCE whatsoever in today’s electronic monetary systems in the world today in 2017 and is just a little niche fungible collectible commodity subject to a 28% capital gains tax rate in the USA on any gains. As to losses you can only deduct a maximum of $3,000 per year on capital losses.

          • PocoPete

            Dow 1/04/1971 – 830
            Dow 5/17/2017 – 20607
            Dow up +2483%

            Gold 1/04/1971 – $35
            Gold 5/17/2017 – $1261
            Gold up +3602%

          • socalbeachdude

            Gold reached a manic speculative high in January 1980 of $850 and then plummeted $600 per ounce from 1980 up until late 2001 which was moire than a 70% plunge in the price of the stuff over a 22 year period.

            Then it started rising from $250 an ounce in 2001 to $1927 per ounce over the 10 year period up until September 05, 2011 and since then over the past 6 year period has PLUMMETED 35% from its absurdly and laughable manic speculative high and is now on its way to9 reverting to its mean of $456 per ounce and then headed lower to perhaps as low as $232 per ounce.

            Gold Demand Trends First Quarter 2017 – World Gold Council

            Global gold demand in Q1 2017 was 1,034.5t, 18% below the exceptional Q1 2016, which was the strongest ever first quarter. Solid inflows into ETFs were nevertheless a fraction of last year’s near-record inflows, and slower central bank demand also contributed to the year-on-year drop. Bar and coin investment, however, was healthy at 289.8t (+9% yoy), while demand firmed slightly in both the jewellery and technology sectors.


            Hedge funds are dumping gold bets at fastest rate since 2008


      • huththa

        Can’t live of of dollars. Dollars only has value because all of our other needs are taken care of. When food and water is scarce nobody will care about dollars. Dollars are printed every year, they are not a rare thing. Just like diamonds, there is a false scarcity. Food and clean water is really hard to produce for 7 billion starving people.

        • socalbeachdude

          The fact is that US Dollars are used to PURCHASE EVERYTHING IN THE US and water is certainly not going to be in any way scarce at all nor is food in any way. Presently there is a MASSIVE GRAIN AND FOOD GLUT IN THE US AND GLOBALLY which is the key reason that prices are falling on food.

    • socalbeachdude

      How ugly will gold sell-off get? Goldman sees $1200

      Commodities are falling like a rock thrown over the edge of the Grand Canyon today including preposterously elevated stuff like gold and silver which respectively plummeted more than $10 per ounce again today and is now down to $1229 and 15 cents for silver which is now down to $16.30. Oil also plunged again today as did nearly all metals and other commodities.

      Metals extend sell-off on mounting China concerns, Fed outlook,14619,4tbp,avyd,bi2i,aq5z,cyp5

      Gold sinks to a 7-week low

      7 reasons gold prices look likely to crash this summer

  • Jeri Brace

    let me guess, but I may be wrong. why is it that our Federal Government allows WallStreet to be run like a casino and allows banks to bet the farm including their customers accounts on the line on futures that may not pan out? Members of Congress getting Kickbacks $$$ for allowing this unregulated charade to continue?

    • falsepower

      money money money money

      • sister soldier

        “Some people got to have it…….Some people really need it……. Do things…. do things…. do bad things with it.”

    • socalbeachdude

      Banks in the USA certainly do not “bet the farm” either with their own funds or customer account funds and banks are highly regulated in the USA by both the Federal Reserve and the OCC as well as the FDIC.

    • Jill

      Problems exist and the exposure to risk cannot ever be eliminated, but are you advocating for even more government control of the financial market?

    • Concerned Capitalist

      Ignorance is not bliss; it is humiliation and utter excruciation–for those who have to witness it.

      Wall Street provides extremely high liquidity for businesses; investors can retire because of Wall Street, while savers live on the street, or in a flimsy cardboard box.

      Those who believe that savings accounts are investments are fools who will be parted from their money. I have a savings account, but I also do not think they are effective at growing or preserving wealth.

      • sister soldier

        According to the new AFL CIO executive paywatch the average CEO of an S&P 500 company made $13.1 million per year in 2016. This amount is 347% times more money than the average rank and file worker. And as CEO’s and other personalities even news media journalists, evangelical televangelists, athletes and fortune 500 heirs and heiresses seen their wealth and assets grow exponentially the income inequality and outsourcing of good-paying American jobs have increased and remained steadily on the uptick. Even after the inauguration. And somehow they can’t find a reason or a way to increase the federal minimum wage to a living wage without “hurting” the economy. Go figure.

  • George W Hill Jr

    Tax it at my rate of 28%… that would be what … .28 x 222 trillion… that will do it … if they don’t have $$$ just take all their stuff… from all the bankers … throw a lien on the 1% and F$$k them.

    • socalbeachdude


  • Round Objects

    So Buffett has $86B in cash just waiting to buy, think bigger, Apple has $256B in cash. Interesting to see what they will own after the collapse.

    • powerhungrysickbastards

      I wouldn’t be surprised if the are plotting a Resident Evil sort of apocalypse. Sick bastards.

      • socalbeachdude

        Hardly. Both need incoming revenues to succeed. Both are for-profit business operations.

        • deluded

          Not if we’re talking about the same psychopathic elite running the world that are hungry for more and more power. Power is not limited by financial transactions. True power is the ownership and control of human life. These people think they are God.

          • socalbeachdude

            I rather concur with your views…

          • deluded

            thank you. God bless you

          • socalbeachdude

            Thank you. The world in for a world of hurt ahead as everything comes crashing down in the way of asset valuations, and much of that pain was totally avoidable had the facts and realities been dealt with and corrected back starting in March 2009.

    • socalbeachdude

      Both companies have MUCH MORE DEBT THAN CASH. The cash is not Warren Buffet’s personally but rather that of Berkshire Hathaway which has other shareholders.

  • socalbeachdude


    Ford to Cut Workforce 10%…

  • socalbeachdude

    The BAD HOMBRE that most Americans now want to get rid of is DONALD TRUMP.

  • socalbeachdude

    The actual M2 money supply in the US consisting of checking and savings accounts in US banks is less than $14 trillion as confirmed by the Federal Reserve St. Louis Branch latest reports which are at:

    M2 Money Stock – FRED

    Yet we have stock markets “valued” with market capitalization in the US of more than $30 trillion, bond markets “valued” at more than $40 trillion, and real estate markets “valued” at around $20 trillion for a total of more than $90 trillion just for those assets alone, leaving aside the other assets in the US. Can anyone even begin to reconcile that enormous difference between “real money” and market valuations?

    • surprisesurprise

      I know…….the truth is…..sometimes I don’t want to believe it. We’re sitting on a time bomb.

      • socalbeachdude

        100% correct. And when the hopium and totally false perceptions blow up, the markets CRASH big time.

  • mtntrek3

    Over- leveraged. Christ is the Way.

    • socalbeachdude

      I fully concur on the over-leveraged part, Chris!

      • mtntrek3

        Yep, indeed.

      • mtntrek3

        When it comes down, it will be with a mighty crash. That’s why I say among other reasons(mainly the eternal) to please consider Christ as Savior. Take care SBD.

    • SnodtBlossom

      there is no god

      • GOD


      • mtntrek3

        Hi sunny, how are you? So….. no one gave His life on the cross for humanity? I beg to differ.

      • Daddyotis

        “There is no Madame President Hillary Clinton.”
        – Snodtty


  • Zlatko Milanovic

    Good article; refreshingly accurate. Read “The Road To Ruin”, by James Rickards. Says the same thing. I suspect the author has read this book too. Gold and silver friends. Gold and/or silver is money, and nothing else.

    • none

      Can you find an article, about how I could issue a Billion? Dollar dirivatie?
      This way I could buy about 200 million in presious metals.
      And 300 million in farmland, and equipment.

      • socalbeachdude


    • socalbeachdude

      Gold and silver have having whatsoever to do with money are are just little niche fungible commodities.

  • JC Teecher

    Apparently the economy in some sectors is not as good as gov and corp. gurus want us to believe.

    I hear that the unemployment rate is the lowest it has been in decades, and I hear that the numbers of people on welfare and food assistance is still the same as it was after the 08/09 crash.
    This doesn’t add up, or down.

    Ford just announced it was cutting it’s work force by about 20,000 jobs.
    Sears announced that their store closings for this year was going to be much higher than earlier announced.
    Shopping Malls all across this country are being demolished and hauled to the landfills. A once huge and bustling Mall in a major vacation beach area is now just a vast acreage of asphalt, concrete, and grass. Nearby, a triplex theater has gone to the landfill, and acreage is the same as the Mall site.

    In our area, someone with more $$ than sense just recently completed a triplex Movie Theater. In a county with only about 50,000 or so, full time residents, the door hinges aren’t getting a workout.
    They have resorted to weekly matinees for less than $5.00.
    I can’t imagine there being enough profit margin in snacks and drinks to cover the costs of employees, much less add to the recoup on the investment.

    This brings to mind three of PT Barnum’s famous quotes:
    ” Every crowd has a silver lining.
    There’s a sucker born every minute.
    Money is in some respects life’s fire: it is a very excellent servant, but a terrible master.”

  • Rich Capitalist

    Derivatives, O dearest ignorant Communists, are used by businesses to hedge against risk; in turn, speculators provide liquidity in the pursuit of profit. This is actually the main purpose of derivative instruments. Farmers, believe or not, use futures contracts to hedge risk or to increase financial gain. Businesses use them to lock in prices for equipment, resources, currencies, and other assets and liabilities.

    Those who dislike them should move to North Korea, for they have no derivatives, no stock exchange, and a lousy and utterly worthless currency.

    Such basket-case economies are always annihilated; they have little incentive to provide services.

    • JC Teecher

      Your comparison of Farmers hedging risk by purchasing Commodity Contracts, is a fairly big difference than investing/wagering, in derivatives.
      A derivative may be considered a form of asset, but based on a wager, and high risk, without any tangible value.
      A commodity contract is based on a future price of an actual item with true value which is tangible. People do lose money on Commodity Contracts all the time, but they can never lose “all” their money.

      Just ask the people that bought derivatives through bonds on Puerto Rico’s debt. Without a US gov bailout, they lost it all.
      If the same investor had bought futures contracts on Rum or canned tuna from Puerto Rico, they could have very well lost a few bucks, but not the whole shebang.

      • Zlatko Milanovic

        Outstanding JC, very well said. You surprise me sometimes.

        • JC Teecher

          All the glory and praise go to the Holy Spirit…the Trinity, from whence wisdom and truth cometh.

      • socalbeachdude

        Commodities futures are DERIVATIVES and were the first form of DERIVATIVES.

    • Zlatko Milanovic

      You need some learnin’. Read “The Road to Ruin” by James Rickards.

  • mtntrek3

    Cut to the chase…… the elite control what is left of our economy. They gamble away at the cost of and mostly win on the backs of we the people of our respective nations. Many sins of mankind of course. Greed is one of the prominent. Look to the eternal through Christ.

  • Zlatko Milanovic

    This is what the Republicans want and vote for; unrestrained capitalism, the nation be damned. Am I wrong? Isn’t it the Republicans that want to unleash the “animal spirits” of the business and banking sectors? Don’t Republicans hate regulations that force banks to behave? Don’t they want to roll back Dodd-Frank? Anybody?

    • JC Teecher

      In one word, a summation of all the above and 99.99% of all dems….they are “liberals”..controlled by greed, and the lust of power.
      The difference being for some repubs, possibly a select few, they are not driven by evil like the 99.99% of dems, that you support. The whole agenda of the dems isn’t for the poor and down trodden, but for evil which is a direct contrast to biblical principles.

  • ICFubar

    I have wondered how, or where the big banks wrote down or off loaded their derivative books. Some have written that Deutsche Bank took on a sizable chunk but the estimated quadrillion plus had to go somewhere besides parties agreeing to a mutual write down. It has just been spread far and wide.

  • sister soldier

    The big 6 (Citigroup, JP Morgan, Goldman Sachs, Bank of America, Morgan Stanley and Wells Fargo) all of the same names from the housing crisis and also appointed to the new DC banking committees and commissions, namely the Trilateral Commission but I digress. We will be gone long before these big names, although they may consolidate into one global banking system, simply because they have all of their money and all our money to weather any financial crisis.

    “When the righteous are in authority, the people rejoice; but when the wicked bear rule, the people mourn.”

  • Rick

    Let em all crash and burn, they deserve no more of our hard earned money. I say a reset is in order, during which times will be very difficult. Many interesting emotional arguments here as to what to own. There will be many ways to get through it, so it might be wise to hold a little (or much) of everything, but we do need to be all in for Christ! Pretty much the foundation of survival in this world and the parallel spiritual world (which is raging huge warfare right now), and the world to come.

    • sister soldier

      Faith is the only currency for a Christian. All other wealth is transient and temporal.

      It’s the only way at this point (a reset). If we allow the powers that be to control the reset; they will control the outcome. I’ll say it again for those who are still holding out that the current administration is going to change our everyday circumstances and save the country they are in fact working to destroy. It is evident that the self destruction of this nation is built in the construct of our system of governance (sway; control) and not government (the ability to lead). And if we do not fight for the freedom of our future(s) today then history will surely record us as slaves.

    • JC Teecher

      Reset? reset, reset, reset. this is a word and term meant for something like a reorganization after bankruptcy or after surgery to remove a cancer.
      A refinance of a mortgage to reduce payments and interest fees. Etc, etc, etc.

      There is only one reset coming after the big collapse, and there will be a long time before that happens.
      It will not be man made nor man configured like some people with the pie in the sky, Don Quixote (impossible dreamer) mindset, want to believe. I can speak unicorns, rainbows and have little pillow fairies flying out my backdoor region, but that doesn’t mean it will ever be reality.

      So-called Christians are the worst for making false statements about a backside to a collapse that is controlled by sensible patriotic Christian people, whereby the world is rejuvenated into one happy state of nirvana. It ain’t happening.

      Why? Because our Heavenly Father has said His Word for our time and our future. He wants us prepared to handle all the fiery darts of Antichrist/Satan and the system that he, through liberalism, has set up on the earth.
      it is here folks, and it ain’t going away because of some collapse or well wished reset worded up by some optimistic spin doctors and soothsayers.

      In fact if those who always speak of some better life for all the world on a pretense of there being a “reset”, or backside rebuilding, would stick to their bibles, the Word says it will be a time such has never been since the beginning of this flesh age. Now folks, there have been some dark dark times in the history of the world whereby millions suffered and died, and many millions more just plain suffered a slow painful death for a long time. So there is no pretty picture of things to come for this world enveloped by the beast system..not until the King of Kings comes.
      At that very instant, in the twinkling of an eye, all flesh is changed into spirit, and the pain and suffering for the saved will commence. We may experience pain in our soul, for all the lost, family friends and foe alike, but the physical suffering will be over.
      No more hunger and worry over medical bills and issues of the flesh.
      Before that day comes..aka the Day of the Lord; there must come a short period whereby the ole dragon, disguised as the Morning Star/Messiah comes in to deceive the world that he will make “everyting OK mon”. Roll a big one, toke on down the line into a happy place and he will send rainbows, fried chicken dinners, and beast system stipens out each week for all people that follow him.
      There will be a period whereby the Shadow gov of the One world system will try to get their liberal system into full operation, whereby all Christians and the KJV Bible are labeled as “hate”. But, it will not prevail, as it is not prevailing now by the liberal dems and media.
      Ole Lucy-fer, (all lgbtq will whore after him) will come in on the heels of it’s near death, and get the whole thing rolling along again by deception, and then he kills the two witnesses in Jerusalem, Elijah and most likely Moses, and then the jig is up, because the true Messiah would never kill two of God’s most honored Holy men.
      Don’t believe it, it is written, read it. Still don’t believe it, then you will probably fall for anything.


    take a good look in the mirror and you’ll see who’s going to be stuck with the bill TBTF SUCKERS!!!!!!!!!!!!!!!!!!!!!

    • socalbeachdude

      Who will be stuck will a bill unless they can get it voided are the COUNTER PARTIES on the derivatives.

  • socalbeachdude

    What utterly false and bogus nonsense.

  • Bob Marley

    Everything’s Gonna Be Alright!

  • Headed in the right direction

    Remember this article…..”Financial Armageddon Approaches: U.S. Banks Have 247 Trillion Dollars Of Exposure to Derivatives” on December 29th, 2015?

    That’s 25 trillion less than the 222 trillion stated in this article.

    See, we are heading in the right direction.

    At this rate in another 9 years it will zero out.

  • riftcliff

    222 trillions of fake wealth and it is not enough to collapse entire US financial system? US economy, “fairly stable”? I wonder the idea about “stability” you have. Meta-stable maybe is a better descriptor being QE, circa zero interest rate, US currency status (still) and hybrid, I mean hypocritical, wars the main supporters of meta-stability…in my aficionado opinion, but yes, the problem seems to be a really big one

    • socalbeachdude

      The $222 trillion in derivatives is not “wealth” at all nor is it accounted for as assets on anything.

  • srknox

    The collapse can’t be far behind

  • socalbeachdude


  • socalbeachdude

    What utter nonsense. The $20 trillion in US government debt is owned by a vast array of entities including individuals, banks, money market funds, pension funds, foreign governments, the Federal Reserve, and the US government itself which is the largest holder of US Treasuries through its various agencies which own nearly $6 trillion in US Treasuries with the largest holdings being the Social Security and Medicare Trust Funds.

  • socalbeachdude

    That source has ZERO CREDIBILITY.

  • socalbeachdude

    Dodd-Frank is nothing but total absurdity that raises costs significant for banks and achieves absolutely nothing and needs to be ABOLISHED.

  • socalbeachdude


  • socalbeachdude

    There was and is no “massive creation of US dollars.”

    The Federal Reserve does not do that at all and has kept the money supply in the US at very low levels relative to our $18 trillion a year economy.

    The total M1 money supply in the US is only $3 trillion and only $1.3 trillion of that is printed currency. This is confirmed by the Federal Reserve H.3 report:

    M2 which includes M1 plus savings balances is only around $13. None of the QE funds increased the money supply at all but only served to increase the MONETARY BASE with 100% of those funds remaining inside the Federal Reserve.

    That LITTLE BIT OF MONEY supports the largest economy in the world which is now an $18 trillion a year economy.

    Not a penny of the debt in the US was run up by the Federal Reserve at all.

  • socalbeachdude


    Get Ready for a “Credit Implosion” – Justin Spittler

    The world’s biggest financial bubble just popped. We’re talking about the bond market. This is where companies and the government borrow money. It’s about twice as big as the stock market. In other words, it’s a key pillar of the global financial system. And it’s starting to give way.

    Last summer, bond yields started skyrocketing. The yield on U.S. 10-year Treasurys is now twice as high as it was last July. But you have to realize something… Bond yields rise when bond prices fall.

    In January, Gross wrote that the bond bull market would end when the yield on the 10-year Treasury topped a key level, and stated “If 2.60% is broken on the upside—if yields move higher than 2.60%—a secular bear bond market has begun. Watch the 2.6% level. Much more important than Dow 20,000. Much more important than $60-a-barrel oil. Much more important than the Dollar/Euro parity at 1.00.” According to Gross, the bond bull market is now officially over. A “secular” bear market has begun. This means bond prices could fall for years, even decades.

  • RomanAlex

    Is that 222 or 22.2? The numbers you cite for JPM, GS, Wells and others look like they would add up to 22.2, not 222 trillion. Ack… my eyes… I was counting assets.. shoot me now!

  • Charlesrocks

    In the 2008 bank bailouts, the biggest reverse bank robbery in history, the US Taxpayer was made personally responsible for the derivatives gambles.

    • socalbeachdude

      Absolutely false and very clueless assertions. There was NO NET COST AT ALL TO THE US GOVERNMENT FOR THE 2008 “BAILOUT” PROGRAMS which were nothing but LOANS THAT WERE ALL NEARLY IMMEDIATELY REPAID as soon as the financial entities were allowed by the US Treasury to repay them. The only net cost was around $10 billion lost on the “new GM” Chapter 11 Section 63 bankruptcy catastrophe engineered by the US government.

  • Steve F1

    Well that should balance out what the Rothchilds have, they caused it they can pay it off.

    • socalbeachdude

      Laughably false.

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