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The Six Too Big To Fail Banks In The U.S. Have 278 TRILLION Dollars Of Exposure To Derivatives

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Bankers - Public DomainThe very same people that caused the last economic crisis have created a 278 TRILLION dollar derivatives time bomb that could go off at any moment.  When this absolutely colossal bubble does implode, we are going to be faced with the worst economic crash in the history of the United States.  During the last financial crisis, our politicians promised us that they would make sure that “too big to fail” would never be a problem again.  Instead, as you will see below, those banks have actually gotten far larger since then.  So now we really can’t afford for them to fail.  The six banks that I am talking about are JPMorgan Chase, Citibank, Goldman Sachs, Bank of America, Morgan Stanley and Wells Fargo.  When you add up all of their exposure to derivatives, it comes to a grand total of more than 278 trillion dollars.  But when you add up all of the assets of all six banks combined, it only comes to a grand total of about 9.8 trillion dollars.  In other words, these “too big to fail” banks have exposure to derivatives that is more than 28 times greater than their total assets.  This is complete and utter insanity, and yet nobody seems too alarmed about it.  For the moment, those banks are still making lots of money and funding the campaigns of our most prominent politicians.  Right now there is no incentive for them to stop their incredibly reckless gambling so they are just going to keep on doing it.

So precisely what are “derivatives”?  Well, they can be immensely complicated, but I like to simplify things.  On a very basic level, a “derivative” is not an investment in anything.  When you buy a stock, you are purchasing an ownership interest in a company.  When you buy a bond, you are purchasing the debt of a company.  But a derivative is quite different.  In essence, most derivatives are simply bets about what will or will not happen in the future.  The big banks have transformed Wall Street into the biggest casino in the history of the planet, and when things are running smoothly they usually make a whole lot of money.

But there is a fundamental flaw in the system, and I described this in a previous article

The big banks use very sophisticated algorithms that are supposed to help them be on the winning side of these bets the vast majority of the time, but these algorithms are not perfect.  The reason these algorithms are not perfect is because they are based on assumptions, and those assumptions come from people.  They might be really smart people, but they are still just people.

Today, the “too big to fail” banks are being even more reckless than they were just prior to the financial crash of 2008.

As long as they keep winning, everyone is going to be okay.  But when the time comes that their bets start going against them, it is going to be a nightmare for all of us.  Our entire economic system is based on the flow of credit, and those banks are at the very heart of that system.

In fact, the five largest banks account for approximately 42 percent of all loans in the United States, and the six largest banks account for approximately 67 percent of all assets in our financial system.

So that is why they are called “too big to fail”.  We simply cannot afford for them to go out of business.

As I mentioned above, our politicians promised that something would be done about this.  But instead, the four largest banks in the country have gotten nearly 40 percent larger since the last time around.  The following numbers come from an article in the Los Angeles Times

Just before the financial crisis hit, Wells Fargo & Co. had $609 billion in assets. Now it has $1.4 trillion. Bank of America Corp. had $1.7 trillion in assets. That’s up to $2.1 trillion.

And the assets of JPMorgan Chase & Co., the nation’s biggest bank, have ballooned to $2.4 trillion from $1.8 trillion.

During this same time period, 1,400 smaller banks have completely disappeared from the banking industry.

So our economic system is now more dependent on the “too big to fail” banks than ever.

To illustrate how reckless the “too big to fail” banks have become, I want to share with you some brand new numbers which come directly from the OCC’s most recent quarterly report (see Table 2)

JPMorgan Chase

Total Assets: $2,573,126,000,000 (about 2.6 trillion dollars)

Total Exposure To Derivatives: $63,600,246,000,000 (more than 63 trillion dollars)

Citibank

Total Assets: $1,842,530,000,000 (more than 1.8 trillion dollars)

Total Exposure To Derivatives: $59,951,603,000,000 (more than 59 trillion dollars)

Goldman Sachs

Total Assets: $856,301,000,000 (less than a trillion dollars)

Total Exposure To Derivatives: $57,312,558,000,000 (more than 57 trillion dollars)

Bank Of America

Total Assets: $2,106,796,000,000 (a little bit more than 2.1 trillion dollars)

Total Exposure To Derivatives: $54,224,084,000,000 (more than 54 trillion dollars)

Morgan Stanley

Total Assets: $801,382,000,000 (less than a trillion dollars)

Total Exposure To Derivatives: $38,546,879,000,000 (more than 38 trillion dollars)

Wells Fargo

Total Assets: $1,687,155,000,000 (about 1.7 trillion dollars)

Total Exposure To Derivatives: $5,302,422,000,000 (more than 5 trillion dollars)

Compared to the rest of them, Wells Fargo looks extremely prudent and rational.

But of course that is not true at all.  Wells Fargo is being very reckless, but the others are being so reckless that it makes everyone else pale in comparison.

And these banks are not exactly in good shape for the next financial crisis that is rapidly approaching.  The following is an excerpt from a recent Business Insider article

The New York Times isn’t so sure about the results from the Federal Reserve’s latest round of stress tests.

In an editorial published over the weekend, The Times cites data from Thomas Hoenig, vice chairman of the FDIC, who, in contrast to the Federal Reserve, found that capital ratios at the eight largest banks in the US averaged 4.97% at the end of 2014, far lower than the 12.9% found by the Fed’s stress test.

That doesn’t sound good.

So what is up with the discrepancy in the numbers?  The New York Times explains…

The discrepancy is due mainly to differing views of the risk posed by the banks’ vast holdings of derivative contracts used for hedging and speculation. The Fed, in keeping with American accounting rules and central bank accords, assumes that gains and losses on derivatives generally net out. As a result, most derivatives do not show up as assets on banks’ balance sheets, an omission that bolsters the ratio of capital to assets.

Mr. Hoenig uses stricter international accounting rules to value the derivatives. Those rules do not assume that gains and losses reliably net out. As a result, large derivative holdings are shown as assets on the balance sheet, an addition that reduces the ratio of capital to assets to the low levels reported in Mr. Hoenig’s analysis.

Derivatives, eh?

Very interesting.

And you know what?

The guys running these big banks can see what is coming.

Just consider the words that JPMorgan Chase chairman and CEO Jamie Dimon wrote to his shareholders not too long ago

Some things never change — there will be another crisis, and its impact will be felt by the financial market.

The trigger to the next crisis will not be the same as the trigger to the last one – but there will be another crisis. Triggering events could be geopolitical (the 1973 Middle East crisis), a recession where the Fed rapidly increases interest rates (the 1980-1982 recession), a commodities price collapse (oil in the late 1980s), the commercial real estate crisis (in the early 1990s), the Asian crisis (in 1997), so-called “bubbles” (the 2000 Internet bubble and the 2008 mortgage/housing bubble), etc. While the past crises had different roots (you could spend a lot of time arguing the degree to which geopolitical, economic or purely financial factors caused each crisis), they generally had a strong effect across the financial markets

In the same letter, Dimon mentioned “derivatives moved by enormous players and rapid computerized trades” as part of the reason why our system is so vulnerable to another crisis.

If this is what he truly believes, why is his firm being so incredibly reckless?

Perhaps someone should ask him that.

Interestingly, Dimon also discussed the possibility of a Greek exit from the eurozone

“We must be prepared for a potential exit,”  J. P. Morgan Chief Executive Officer Jamie Dimon said. in his annual letter to shareholders. “We continually stress test our company for possible repercussions resulting from such an event.”

This is something that I have been warning about for a long time.

And of course Dimon is not the only prominent banker warning of big problems ahead.  German banking giant Deutsche Bank is also sounding the alarm

With a U.S. profit recession expected in the first half of 2015 and investors unlikely to pay up for stocks, the risk of a stock market drop of 5% to 10% is rising, Deutsche  Bank says.

That’s the warning Deutsche Bank market strategist David Bianco zapped out to clients today before the opening bell on Wall Street.

Bianco expects earnings for the broad Standard & Poor’s 500-stock index to contract in the first half of 2015 — the first time that’s happened since 2009 during the financial crisis. And the combination of soft earnings and his belief that investors won’t pay top dollar for stocks in a market that is already trading at above-average valuations is a recipe for a short-term pullback on Wall Street.

The truth is that we are in the midst of a historic stock market bubble, and we are witnessing all sorts of patterns in the financial markets which also emerged back in 2008 right before the financial crash in the fall of that year.

When some of the most prominent bankers at some of the biggest banks on the entire planet start issuing ominous warnings, that is a clear sign that time is running out.  The period of relative stability that we have been enjoying has been fun, and hopefully it will last just a little while longer.  But at some point it will end, and then the pain will begin.

 

  • Bill

    “Congress promised”. Most of us knew better.

  • GetReal4U2

    everything is coming together quickly…the new China bank is very interesting…on a side note…how were the weekend meetings in Texas?

    • Mike Smithy

      Yes. The Asian Infrastructure Investment Bank (AIIB) is the new 800 pound Gorilla. The Federal Reserve is toast and everybody knows it.

    • Revolt to save America

      I gotta agree a month seems like a year, things are going fast economically, I know texas REAL estate is going well but seems in so cal buyers are slowing.. so here we go folks,,

  • Ardit Spahija

    This one smells ugly,and I think it’s getting ugly in a hurry..

    • Revolt to save America

      Like I said to GETREAL”,,, yep everything changes week to week, it’s not any longer slow moving, this mess is getting confusing, what to do with money. best to be debt free for me, no credit cards, unless ur already screwed then get ready to just max them out lol.

      • Ardit Spahija

        I’m debt free actually,also,no credit cards
        i am a student and i pay my tuition fee cash every month !
        This sandcastle is falling apart,$ and euro is going to a sinkhole,worse,i think there will be no euro and dollar in the next two years.
        I hope this lasts a little longer just so I can finish university,then I’ll consider moving to Qatar,they have gold to feed all of us instead of bread !

        • Revolt to save America

          good for you ! I am too debt free, home paid off and no credit cards or car payments.but what to do with savings ? Do we trust credit unions ?

          • Ardit Spahija

            Credit unions are owned by its own members,but the thing that most people don’t seem to understand is that even if your savings will be untouched by the Bail-In law or from too big to fail banks,dollar will fall so much,I think people will be happy to get 50 cents for a dollar they had..
            Are credit unions safe and trustworthy ?
            Yes I think so,but in my honest opinion,dollar and euro will fall so much that the paper that is printed on has more value than the valute itself.
            P.s : sorry for my bad english,i’m not a native english speaker

  • DJohn1

    The real question here is WHY.
    If you own it all WHY gamble on something that can lose it all.
    Unless these bankers know something we don’t.
    I think that is what must be happening.

    • Nick Kendrick

      Tax payers are on the hook. They fail? Bail out. They succeed? Profit. No risk to them, big risk to us.

      • alan

        Its a game of hot potato. I’ll get rich in the ponzi scheme, then retire, now it falls on the next sucker to keep the music playing.

        • retired22

          The problem that these financial thieves have is that most of their wealth is in paper backed by thin air! If the general public loses faith in the Federal Reserve currency there isn’t much the financial guys will be able to buy with the little pieces of paper that nobody wants.

      • Revolt to save America

        no, EVENTUALLY the rubber hits the road, we can’t prop it up forever ! ,,,,

    • retired22

      They don’t own it all!
      The whole point is that they are like vampires.The wealth they are using to play their games is being drained out of the national economy,the tax paying public in the middle class is being looted.When the Middle Class collapses from financial starvation,the consumer economy will collapse with it.
      When the consumer economy goes into a deep state of deflation it will pull down the Welfare State & we will have hundreds of millions of entitlement junkies running wild in the streets looking for a financial fix.
      Do you really think that at this point it matters what the Bankers & financiers do? They will be running for shelter like every one else!

      • Revolt to save America

        You are absolutely RIGHT ! thank you

    • Revolt to save America

      I read gold is over sold, that 5 people own 1 bar, UNLESS you have tangible goods don’t feel like you have anything, and paper is just that, I’m still real estate, priced right, we all gotta live somewhere,

  • The voice

    Only 278 trillion?? what could possibly go wrong

  • Genada

    How one thing effects something else is little understood in the current system. When one bet goes wrong it could start a chain reaction that leads to further and further damage all along the chain and into spaces unaccounted for. Glass Steagall should of never been been taken away in the first place and needs to be put back in place.

    Major factor in World War I was the tables they used for mobilization. That one side starting would lead to others starting and from there more and more. Once the mobilization started, it was war and all other choices were removed. It made perfect sense on paper, seemed reasonable on paper but in practice was terrible. This is how the markets are working.

    • Gay Veteran

      and who repealed Glass Steagall? why Bill Clinton, beloved of the liberals and Democrats.
      let’s see, what else did Slick Willie do?
      NAFTA, shipping millions of Americans jobs overseas.
      Media deregulation, allowing a few corporations to control over 90% of the media.

      • guest

        I think it really became obvious with bush sr.and his new world order / coalition of the willing / agenda 21 Rio summit, myself.
        Everyone that followed has performed their role to insure the demise of the ‘old world order’.
        You do realize that W considers Clinton his ‘brother from another mother’.
        Their all in bed together, they all dance to the same master’s tune.

        • Gay Veteran

          democrats=republicans

  • VigilanteCaregiver

    The “278 TRILLION dollar derivatives time bomb” is definitely a problem. But what most folks don’t pay attention to is China’s entire economy is a speculative 645 TRILLION Yuan bubble! And we are backing them.

    Best to take cover and detonate these bombs before they get worse. Better to deal with a British Grand Slam than a nuclear device.

    I’m sure everyone here has prepared? Hmm?

  • rat28

    I don’t believe there will be any crash.. The stock markets around the world have reach an era of invincible

    • alan

      All backed with powerful printing presses. I think this game will go on for awhile. If I mention the stawk market taking a serious dump I can see peoples eye going dull. No one wants to hear it. I think Wall Street crooks have people over a barrel and they know it. Stawk market will not go down.

      • retired22

        If things get rough enough with Black Swan events all over the place the situation will spin out control.
        once the financial problems reach the point where the public can’t buy food,..at any price!Where gas for cars can’t be had because the local distributors can’t locate any to buy.When people freeze in winter because home heating oil is not available!When the National Guard has to come in to maintain order!
        When these situations begin to occur it won’t matter what the financial markets do!

    • retired22

      You are wrong,the markets don’t live in a separate universe.If Social & political issues bring down the Welfare State the whole fabric of our society will crash,when this happens it won’t matter what the financial markets do!

      • Catman

        The welfare state will be the last to go. It will be funded when everything else is not. This government will not risk the absolute mayhem that will hit every street in America when the EBT cards no longer work. And regardless of ideological objections, the vast majority of Americans will be in full agreement to keep in place and increase welfare for the security/stability it provides. EBT cards, subsidized housing, Medicaid, obama phones, etc. have taken the place of soup lines and charity. Politicians will keep that up until the bitter end.

    • Revolt to save America

      it’s the massive FAKE PROP UP, the bigger they are the harder they fall. First off the stock market is being fed by foreigners not exactly americans, then also corperations are buying back their own stocks, it’s a big scam…. it will come crashing down, but as you see everything is disconnected, stocks,, housing and NOTICE spending is down, stores aren’t getting the sales , If you want the truth look at the core which is JOBS,,,, no jobs, no income equals no spending, SO JOBS IS WHAT YOU SHOULD SEE< even those are lies, so look at the participation rate it's lowest since 38 years, so 1970s, look at how the gov wants us to view things then go do your own research , unemployment is more like 20 percent, people gave up and accepted the lifestyle theyre living, I see signs for 10 hour jobs everywhere, no one can live on that, so they just stay out of the work force.

      • Catman

        How does a person survive who will not take a job, even if it’s part time? Mothers with children get the benefits. Not single men, women, or childless couples.

  • Michael Dubin

    I say let it collapse already. If you bank with any of the big banks you are choosing to do business with a criminal organization and you deserve to lose your money. Go with a credit union or a local bank. These big banks no longer provide any real services to the public, they just push pieces of paper around. Of course, it all depends on whether the Fed will allow it to collapse, as they can always print 100s of trillions of dollars to bail out the banks. Maybe that’s why Jamie Dimon is being so reckless.

    • retired22

      Problems arise when the situation gets so far out of line that it becomes uncontrollable!
      I think that is what we have now,….someone called it a slow motion train wreck!
      We have reached the point where the problem becomes international & violent.

  • VigilanteCaregiver

    Folks, listen!

    I’ve got the answer I’ve been seeking and will close my account (I’m done with it); the question was “why is this collapse occurring”. It’s more than prophesy; in fact it may be why the Lord gave the information to His prophets in the first place.

    This goes back many, many generations – and began with child and impoverished abuse. What happens when individuals in a society decides not to own up to their own sins and abuse? It get’s passed on and compounds to an eventual collapse. We’re there: we’ve collapsed.

    Before I go I want to implore everyone to take a serious look at their life; what you’ve done, what are your drives, what do you value as a person and where appropriate what you value as a family. Brutally question yourself and answer yourself with complete honesty; learn who you are and what you’ve done, and where you’re going. And then learn to truly forgive and humble yourself. Be good to all.

    And if so inclined, pray and ask Heavenly Father, saying to Him that you pray in the name of Jesus Christ, to guide you and be with you. Ask Him the questions you’ve been so frightened to ask. Be willing to go through trials and torments that give you experience and growth. Ask Him what truth is, and be not afraid of the answer.

    And if Gay Veteran, Jox, or anyone else who badmouth’s your beliefs comes here and lashes out; forgive them. Their trying to get relief for pains unbearable. It’s just words; it doesn’t cause physical harm. Just forgive them.

    Thanks everyone; and I hope we can restore the nation soon.

    • Revolt to save America

      Amen I hear you, so much truth to that, look in the mirror folks and get it right. Also living in the here and now prepare, help others when you can if it’s not pure survival mode. BE well, God bless, Be kind,

    • K

      May the Lord protect, you and your family in the coming days. Stay well.

    • jox

      You mean that chistian God makes governments of the world have huge deficits and debts, and also jew bankers have mountains of derivatives, because in the USA the family values are not what you expect?

      • CharlesH

        God doesn’t make governments or people do anything. Remember the simple thing called: free will? It’s how we choose to use that wonderful gift – God doesn’t decide that – we do.

        • jox

          Explain that to VigilanteCaregiver and lots of other folks on this site!

        • GSOB

          The will is in bondage to sin. The sting of death is sin, and the power of sin is the law; but thanks be to God, who gives us the victory through our Lord Jesus Christ.…

      • Ur Future

        Read the bible – What book of the bible covers ECONOMICS??? The Bible is a manual for children/adollesents – You take those lessons and create what it left out -construction of better lives thru unravling the “mysteries of science” -constructing advanced means of lofe (“…go forth and conqure the earth -populate the earth….” build airplains, highspeed rail, go to the moon…develope advanced nuclear power – fusion power….don’t be a satonic figure- don’t be a greenie who wants to go backward.

        • GSOB

          another one bites the dust

    • Gay Veteran

      “…And if Gay Veteran, Jox, or anyone else who badmouth’s your beliefs comes here and lashes out; forgive them. Their trying to get relief for pains unbearable….”

      who knew that you were a mind reader! Praise be!

    • SunnyFlaSnotress

      No, no. Its just poor politics and greed.

    • Conundrum

      “HE that is in you is greater than he that is in the world!”

  • robbie41

    They don’t even mention the $ 240 TRILLION DOLLARS IN UNFUNDED LIABILITIES.. Just remember Sept 13, 2015 isn’t that far away now is it.. Don’t forget about the NEW BANK BAIL-IN RULES..

  • Revolt to save America

    I follow martin Armstrong, I’m at odds with a few things, I have moved things to credit unions, but do we risk it there also, I bought during last crash ,did well, but now it’s rather the banks hold, I mean they will still be open collecting mortgages, can they fail by taking our savings yet keep asking us for mortgage ? and maybe I should use some savings and get a 4 plex and be more diversified, at some time we have to make calls and judgements on what is safest, if I get a 4 plex for cash I can lower the rents if we hit a bad recession since I wont owe on it, but also it’s vital to not over pay if I do buy, I know things will move down but it’s a race to rather I pay too high for real esate or lose my savings, ANY THOUGHTS ?

    • Play it safe and buy now.

  • JailBanksters

    One slight problem….
    The Banks call Debts Assets, so they don’t have anything until the money they loaned out that didn’t exist is payed back. If you started with nuttin’ and you lose nuttin’, what have you lost, NUTTIN !!

    • “you started with nuttin’ and you lose nuttin’, what have you lost, NUTTIN !!” —– Sounds like the Monthy Python movie “The Life of Brian”?

      – Always look on the bright side of life…. tada tada tada tada…
      – Always look on the briiight side of death… tada tada tada tada… just before you draw your terminal breath 😉

  • gryphonv8

    don’t worry, the banks are going to pay back every dime because it’s the right thing to do

    • Revolt to save America

      LOL, A LITTLE comedy to break up all the bad news. The banks are never going to pay the price themselves, I have to wonder about 2 things, if they fail and lets assume fdic can’t hold, how can one lose money in a bank and at the same time a bank continue to collect mortgages, it has to be one or the other, if you go broke you better lose my mortgage along with my savings !

  • alan

    278 trillion is quite a print job. Its like playing a game of Monopoly with a color laser printer behind you.

    “If” SHTF, they would likely know a few days in advance. So watch for any unusual activity in the Military deployments, police, bankers leaving the country. CONgress all going on vacation to France.

  • Horiboyable .

    The recession has already started, companies lines of credit have been cut, record amounts of loan applications have been knocked back and there are reports of shortage in the liquidity markets.

    • jox

      Not in Europe. Because of the QE, liquidity is everywere. Banks are selling cheap loans and mortgages, again!

      • Ardit Spahija

        But we have the future mirror,every step that USA has done in the past years,we in Europe are doing them now..
        Plus Greece it seems like leaving euro,italy,spain & portugal might follow..

        • jox

          I’m not sure about that. Not now. The injection of money from the BCE is having some effect: every country , including Spain and Portugal, is financing at 0%. Nobody can default in those circunstances. The bubble will get bigger and bigger, but in the short term it will not explode, with 60 billion euro injected every month.

          • Ardit Spahija

            The moment that the “0%” financing will become in normal levels,I think we both know what might happen..
            But sincerely,I think USA and EU will go down the drain holding eachother’s hands

          • jox

            I agree. It’s the same gang of banksters that control the supply of money in USA and in EU.

    • MichaelfromTheEconomicCollapse

      It is true – credit rejections are really spiking right now. I should fit that into one of my upcoming articles.

      • Horiboyable .

        You are welcome from the UK

  • Horiboyable .

    I am planning on a small Christmas this year.

    An honest man does not consume more than he produces.

    • Revolt to save America

      Amen ! ! ! I live bellow my means. I can’t sleep if I don’t. I was sick a year and couldn’t shop or do anything, I found I had enough crap at home, youd be amazed what we don’t need. KEEP IT SIMPLE folks, save save, prepare, ( good day you all )

  • yellowpoppy

    They know when it will happen because they will orchestrate it and it will happen in September – see The Mystery of the Shemitah, which I have read. Elul 29 is the Hebrew date but I can’t remember the exact date in our calendar but it’s definitely in September.

    • Revolt to save America

      sep 31 or Oct 1, see martin armstrongs work, cycles, this year we have many cycles hitting including many biblical things happening all at once, many call for Oct to be a massive fall.

    • Revolt to save America

      if only my Jewish back ground gave me an advantage, darn, I guess if ones believes the jews where the chosen people, I can say I have been Blessed with more than I deserve, that’s for sure.

    • MichaelfromTheEconomicCollapse

      Elul 29 falls on a Sunday this year, but we are not just looking at one particular day.

      • yellowpoppy

        No but it will most likely start with a crash around that time. That’s my feeling anyway. Thank u for your excellent articles.

  • DJohn1

    There are different kinds of labor out there.
    The first requires hard work and is the basis of much of our economy.
    The second is using one’s brain to make a living instead of working hard. Compounding things to generate funds is one way this is done.
    The third way is not to work at all. That is done by a huge group of people in today’s world.
    I once knew of a teenager that invented a snowflake pixel. He charged people $1 to have their very own pixel that no one else would have an exact duplicate of. When his parents discovered what he was doing they hired a lawyer because they were so sure he had done something criminal. At the time he had become worth well over a million dollars in the bank.
    Those parents learned that it was all legitimate and he really was a millionaire. He never really had to work a day of his life.
    He used his brain to make the money.
    In the worship of money, most people are not aware of the rules.
    Hard work is no longer a good way to make money. The way to make money is to find something everyone wants and get them to buy it from you at a profit for you. That rule has been around for a long time.
    Bankers have fallen for a scam. They nearly have busted the entire country with their scheme with derivatives. That scheme fell on its face in 2008 and is more than likely to do so again. Yet none of these bankers are in jail.
    They have a ready and able partner in the government.
    The next time it happens you will see runaway inflation so bad that the entire money supply will resemble Germany in the 20s.
    When that happens commodities will be king. When the money supply no longer works, people still need the basics to survive.
    I suggest that the military will take over at that point in time.
    I think these thieves in bank clothing need to be afraid. Very afraid. Government will need a scapegoat. And more than likely those bankers that did this will be that goat.

    • Revolt to save America

      agree on some stuff, but we are headed to deflation, Please read up on MARTIN ARMSTRONG, theres trends here ! I agree with WORK SMART, NOT HARD, yes I have myself and I do little and do well. Have a great day ,

    • Prepper 1

      Unfortunately those bankers will have left the country before the shtf starts . They have the money to disappear

  • Revolt to save America

    any comments, do we leave our life savings in credit unions or do we pick up real estate ? I’m looking at a 4 plex in southern California in 250k range and think RE may go down but the bank can crash and burn too, I did well in 2009 with real estate but now I wonder if the banks may pull a 1929 on us?? it’s a battle of savings or buying tangable assets ???? anyone ? Thank you

    • K

      I would ask, who do you expect to rent the units? Retirees, or working age people. If workers, could their industry be affected by the drought? There is a beginning of a movement out of California. Would you be able to get by, if all four units were not rented? If retirees, could you rent them cheap enough, as their buying power decreases. The main factor is, many do not believe this will be a normal downturn. They believe this one could last a decade or longer. If you are not as prepared for truly bad times, as you could be. That would be a better use of your funds. This is just my opinion.

      • Revolt to save America

        it can be anyone rents are low for California 695 per month, if I have to lower it to 350 I will survive because I won’t have a mortgage, it’s like 4 homes with garages, in mid 250k range, no mortgage, questions is how much money would you rather have in the bank getting less than 1 percent in a crisis, is 500k enough..lol… I don’t want my money all in the bank, I expect rents can go down but I’m also in an area where rents have been low and may rise. It’s at least something I can touch and can be used, If the banks rob our savings or put these big stipulations on us then I am not interested in being in the banks more than I need too. I hope that helped, yes if no income came in I’d survive, just like I do now with .50 interst I get, it can’t be worse.

        • K

          Then I think you have answered your own question. Buy it, and the best of luck to you.

    • MichaelfromTheEconomicCollapse

      Probably not a great time to buy real estate right before the bubble bursts – especially in California.

  • Antonio Ossa

    BAIL, BABY, BAIL!

  • miko

    this is Romans fault, cos they invented legal entities whose actions were not causing liability for any human beings. that s the root of contemporary problems with Corporations. they should not be legal.

  • Capitalism ONLY works with lots and lots of competition that has to be effective and easily available. If complete and total competition is in any way impaired or disadvantaged then capitalism is a failed system that must be gotten rid of.

    It is just that simple. America has skated on the very edge of destroying competition, and the situation is getting worse and worse for small business competitors.

    This is nowhere worse than in the banking sector. The big banks are the most predatory and monopolistic of all industries.

    We need to do everything possible to help small banks and credit unions and savings and loans. Instead the Democrats under Obama favor only the giant criminal America hating banks that are by Obama’s own words TO BIG TO FAIL. Hillary loves these monsters too So no help there. FounderChurche at gmail

    • Gay Veteran

      fixed your sentence: Instead the Republicans AND Democrats under Obama favor only the giant criminal America hating banks that are by Obama’s own words TO BIG TO FAIL.

  • jo6pac

    Yes, and the old safe guards are gone. There goes your saving, 401, and pension fund all in one NY second.
    The best part of the 2015 budget is both parties voted for it because that is what their puppet masters wanted.

  • Alleged Comment

    There is nothing wrong with bets. But probably for the FIRST TIME in history they are using DEBT as the collateral, not real assets.

    Just thought I’d let you know.

  • Gay Veteran

    well serf, what else did you expect?

    democrats=republicans

  • Gay Veteran

    interesting, NOT ONE WORD about our massive war crimes in places like Iraq, Libya, Syria, etc.

    you need to fixate less on genitalia and more on evil men and women who will do anything for money and power

    btw, how many unwanted babies have you adopted?

  • Catman

    I think it’s true that derivatives are a bet, and for every buyer there is a seller. Therefore they would in all likelihood cancel each other out. Recall back in 2008/9 this same discussion was going on and there was all this scare talk about unraveling derivatives. Well, two years later we heard nothing more about that. Dimon isn’t concerned about some mega derivative meltdown nor even remotely referring to one that could somehow end of costing the world $278 trillion. That’s preposterous and a shock number to encourage us to read further. He is right in that there will be another trigger, and I’d guess it will be some sort of asset bubble implosion once the Fed starts to raise rates. Money will become more expensive for corporations to borrow and they will taper their dividend payouts, stock buybacks, and that will send a shiver through the markets. If global consumption doesn’t really pick up layoffs will be announced as is happening now in the energy sector. The market will find a bottom and it will start over. Rinse and repeat, about every 7 years. Shemitah?

  • DJohn1

    If the entire world as we know it were going to come to an end what would you as a rich banker do?
    There is something really fishy about the whole situation.

  • RKae

    Ah! The dream of making money for providing absolutely nothing to anyone!

    It deserves to collapse.

  • yellowpoppy

    Thank you for the calendar link Momma. I have printed off the page. Thought it was round about the 13th September.

  • guest

    Spot on.

  • GSOB

    o brother

  • The Kali Whrite Boi

    This article is misleading. The ‘total’ assets is NOT the correct line item to consider in the event of a crash. When the derivatives go, these banks’ immediate available cash is both their depositors’ and their own.

    Their own cash assets are minimal compared to their total assets.

    According to the Federal Reserve’s as of 11/4/15 report commercial banks’ CASH ASSETS equal $2.75 trillion. The FDIC’s insurable balance is $62.8 billion. Customer deposits equals $11 trillion (and that’s only as of 12/31/14).

    There is a cash shortage of $8 trillion dollars for US depositors.

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