muses of the moment

May 28, 2013

Derivatives

That derivative dragon is rearing its ugly head again.

Click here.

But after lobbying from financial institutions, the CFTC lowered the requirement to two banks. CFTC officials claim the standard will increase to three banks in about 15 months.

Why would the CTFC LOWER standards? Because the banks would be broke if these derivatives, that have increased in the last 5 years, were counted as even remotely close to mark to market, all banks and their counter-parties (insurance companies, Fannie and Freddie, pension funds, sovereign funds, you, etc.) would be BROKE.

Guys, the government and banks can modify all the accounting rules they want. They did the same thing up to 2007, and it did not keep them from collapsing and taking the entire system with it. It was then that the government stepped in and printed money, which they are still doing today. The next time around, it will be a bail-in of your investments.

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2 Comments »

  1. GG,

    With all of the information that we have been receiving lately, what has/ has not changed in how you are financially preparing for the future?

    Comment by MikePhila — May 28, 2013 @ 2:44 pm

  2. MikePhila,

    No, but it is very easy for me to change my plan from a 3 year to 6 year sell point for gold-silver. I am not relying on income from investments for living expenses.

    gg

    Comment by totallygroovygirlfriday — May 28, 2013 @ 5:23 pm


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