Derivatives are basically the Banksters Blitzkrieg to imploding fiat currencies globally. In the 1990s they were acclaimed as a financial instrument for transferring risk. In 1999, Federal Reserve Chairman Alan Greenspan stated: “By far the most significant event in finance during the past decade has been the extraordinary development and expansion of financial derivatives.” He went on to argue that they “enhance the ability to differentiate risk and allocate it to those investors most able and willing to take it.
Out of deregulation of the financial services industry it was then felt they would benefit the economy is why the Administration and Congress then made the decision to leave the derivatives market vastly unregulated. What followed then was the Gramm-Leach-Bliley Act of 1999 and the Commodities Futures Modernization Act of 2000. Not knowing that this legislation of deregulation would later be a huge mistake leading to a financial crisis to come in 2007.
AIG sealed their destiny of bankruptcy after 2007 through their large overexposure of derivatives along with misjudging the housing market price that then led to their collapse.
Later in 2010, The Dodd-Frank Wall Street Reform and Consumer Protection Act came into existence in an attempt to re-regulate the derivatives market with a multitude of new rules. The Lincoln Amendment and Volcker Rule provided an attempt to create dealer conduct requirements, credit limits, and basically banks conduct in trading derivatives.
However, even with the attempts to control the financial derivatives market and implement regulatory practices in how business would be conducted with them, would not be sufficient as we would find out several years later.
With JP Morgan Chase we come to learn that they represented over $700 trillion on the financial grid global ponzi scheme. Jamie Dimon of JP Morgan Chase situation resulted in a $2-billion trading loss in derivatives within days of the disclosure itself. His response was “Hey, everybody makes mistakes…” So there are billions more where that came from to play with on more plunders. Was not at all a comforting message for those with retirements invested.
What exactly does a derivative represent in the global financial services picture? A derivative in all truth, is a bet that has occurred in the global financial casino, or as I have referred to as “casino investing”. So with any bet there is a hedge risk at the expense of the world GDP of about $65 trillion. Warren Buffet is even troubled by them himself when he called them “financial weapons of mass destruction.”
Derivatives are nothing more than financial instruments used as a hedge risk for speculative investing. They originate from stocks, bonds, bank loans, or fiat currencies. In their basic form they represent a contract between two parties where there is an exchanged real good or service. They can be tied to certain events, even weather changes or fluctuations in interest rates.
In recent news with UK banks are paying collective fines in the range of $1.5 to $2 billon over financial derivatives. Customers felt they were essential to the success of managing businesses but then came to know that the salesmen for them were actually robbing the business. According to the news reported in the London Evening Standard, Barclay’s, HSBC, Lloyd’s Banking Group and the Royal Bank of Scotland (RBS) all are going to be compensating for 90 percent of those business of which were mis-sold over these products.
So for anyone that has invested their hard earned money into the casino investing of global financial services and their investment accounts, you are putting your household finances on the crap table. Regulatory measure are no insurance to you invested account as evidenced over the years. The dependency on financial global services has left many investment consumers lingering over their next move or direction for securing their retirement.
2006 through 2011 we saw 401k’s take major hits and this past year no different. State and federal government retirement accounts all were involved in the same high stakes casino investing ponzi scheme of financial derivatives.
The simple question remains, is there security in investment gambling or in solid precious metal investing with historical evidence to validate its worth? If you are betting against another situation to resolve on its own out of another regulatory measure getting passed the risk incurred can definitely mean a loss of retirement.
Therefore, it is your choice, your call, and one that can either implode your retirement or secure it for years to come. Your best bet is to examine the precious metal market further and weigh the difference of your household investment and determine the security of all the information gathered. Then utilize the option as the decision that will need to be made.