Warnings of a Derivatives Blowout in 2013
Dec. 26, 2012 (EIRNS)Readers of EIR are already well aware that absolutely nothing has been done to cure the rottenness of the global financial system over the past 5 yearsand that, with the trillions of dollars of bailout, the bankruptcy crisis has only gotten worse. What's new is that a number of prominent institutions and individuals have come forward at year-end to warn that a blow-out of the system is an immediate, clear-and-present danger.
Most direct was Paul Craig Roberts, a former Assistant Secretary of the US Treasury under President Reagan and former Associate Editor of the Wall Street Journal, who on Dec. 17 issued an article titled "The Derivatives Tsunami and the Dollar BubbleThe Fiscal Cliff is a Diversion," contrasting the insane "fiscal cliff" debate over how to impose austerity on a dying economy, to the actual problem, the derivatives bubble. This article was one of a series of warnings, including an interview given Dec. 11, which he entitles, on his website, "America is Going to Crash Big Time."
In the "Tsunami" article, Roberts notes that 95% of the $230 trillion in U.S. derivative exposure is held by the biggest four Wall Street banks, and adds: