Wednesday, Oct 15, 2008
Numbers becoming meaningless as Paulson defends government intervention
Infowars: Total Bailout Cost Heads Towards $5 TRILLION
These potential figures (within the article, based on Reuters estimates) take the potential cost to $4.559 trillion+ - or $43, 221 per household.
Furthermore, when you account for the fact that the credit default swap market is around $62 trillion, & that derivatives worldwide are worth between between $1 and $2 quadrillion, the numbers start to become meaningless.
They have worked hard to achieve this only since Greenspan made derivatives legal during the early 1990's! Once again, the derivatives are imaginary, & no threat to anybody but the financial institutions that hold them, and to a portion of a pension industry that would be relatively cheap to save. The derivatives only become a danger to the whole economy once monetized by the bailout that will let them buy/inflate real assets.
5 Comments
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1. doom&gloom said...
Non-credible news source.
Also, derivatives are no more imaginary than any other type of debt. They are real liabilities fully connected to every other part of the financial system. The distinctions between the 'financial markets' and the 'real economy' as often peddled by the media are also misleading.
2. planning4acrash said...
Ehem. Alex predicted the crash to the date three years ago, so if his websites aren't credible, then HPC is definitely not credible. And in anycase, the numbers are from Reuters, and the comment about derivatives not being an systematic issue without a bailout was my comment, not from infowars.
3. planning4acrash said...
My point was, that, doing nothing, and saving the pensions of citizens would cause a small about of inflation and bankruptcy of the firms behind the fraud. It is only when we bail out the fraudsters that we get the run away inflation that will now unfortunately see.
4. planning4acrash said...
Derivatives are layers upon layers of leveraged "assets" based on loans, morgages, pensions, insurance, etc. So, the base debt economy linked directly to consumers is easy to bailout. If you wiped out derivatives and credit default swaps, and just bailed out mainstreet and consumers, inflation would be very limited. So, that's where I'm getting at.
5. Refusetobuy said...
Adding up the numbers is also meaningless.
Take weather derivatives. Say that the holder pays $1 each degree above 20 degrees C, and receives $1 for each degree below 20C.
20 contracts are written.
That doesn't make the temperature 400 degrees C.