BIS Warns Of 2023 Black Swan – A Derivatives Time Bomb

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Written by George Gammon


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  1. With a much higher notional value. All involved with neg rate debt, crypts, untold reams of unreserved paper, custodians with gross spreads bigger than company capitalization all in a rising rate env. Short term debt rollover is going to be tough. I quit eating sugar about 8 months ago, so now I might be able to do some karate stretches and work up enough flexibility to kiss my ass goodbye.

  2. Sure, these loans are not on the Company Balance sheets – which is bad – but wouldn't they be on the bank balance sheet (although I guess as an 'asset' until it blows up).

  3. Need to explore the research more but normally swaps don't include exchange of principal. There the principal is off balance sheet but the market to market risk should be accounted for. Second question is whether the $100T is gross or net risk. For example let's say JP Morgan and Credit Suisse each have $1T euro to dollar swap and $1T dollar to euro – eg two offsetting exposures. Is that $2T in risk or 0 net risk.

    Plus I wonder if the swaps require posting collateral and whether they are cleared through an exchange.

    Finally the Asia crisis in the 90s was triggered by hidden currency swaps by Thailand.

  4. Derivatives schmiriaties. Its all flimflam and total bs. Money has intrinsically no value. For a while all money was backed by gold, till the gold ran out. No money only has value while it can be converted into something people want. If you are a billionaire, how many lobsters and caviars can you eat, how many fancy cars can you drive, how many girlfriends can you satisfy, what are your billions truly worth to you if you cannot eat use or abuse them? No matter how you spin your flim flam on derivatives and dollars it is all meaningless if there is no food to eat, no females to chase no fancy trinkets to flash about (for impressing the females).
    So stop trying to blind us with your bs, we all know you are simply trying to justify your existence and give money meaning so that you can accumulate more money. Good luck with that. Eventually all bubbles burst. Hope your money is edible when the burst happens.

  5. If you wanna be successful, you most take responsibility for your emotions, not place the blame on others. In addition to make you feel more guilty about your faults, pointing the finger at others will only serve to increase your sense of personal accountability. There's always a risk in every investment, yet people still invest and succeed. You must look outward if you wanna be successful in life.

  6. Main stream media are mainly owners by richies …. so they will NEVER EVER tell taypayers what is coming ….( Taxpayers ofc has to bail out the richies when they loose !!! )

  7. The whole problem is : No payment back in total – if you pay back all the borrowed money there is no problem .
    the real problem is that especially in the US NOBODY wants to pay BACK -as they want to leverage !!!!!!! – No OWN MONEY involved !
    so rolling over is the rule and the reason for all the mess.
    and even better it looks if you only lend money which is saved before ….
    but the US unruled capitalime does not work like this !! and if it goes wrog – the whole woreld has to pay … what a broken system !! BUY GOLD and OWN IT !!!

  8. The derivatives market is said to be over $1 quadrillion dollars in notional value on the high end, but some analysts say the market is grossly overestimated and some grossly underestimated. There is a large difference in the notional value and actual netted value of derivatives—$600 trillion versus $80 trillion—as of 2021.

  9. Derivatives are also bets or gambling on the price of a commodity in the future. I think that this is more likely the problem here.
    Bankers and Traders have been putting futures trades in place and these trades have also been bet on for commercial gain. They are owned by someone or a bank and should be the responsibility of that person or bank. If for instance I believe the future price of a commodity like coffee to be x in 5 years time I can put a trade in on that.If the future price of coffee increases to x +y I will profit or lose by value y.These trades can also be bet on and this is called a derivative.
    It is "Casino Banking" that we were told would be curtailed…BUT IT WASN'T. It should be exposed and the bankers should be held responsible and accountable for their actions…NOT bailed out by the average person.

  10. Watch out folks because our chancellor in UK is seriously thinking of taking away the "Ringfence" that protects the retail banking customers (average persons bank account) from the commercial bank accounts (some speculative and some business)…THIS WOULD BE THEFT IF WE HAVE MONEY TAKEN TO PAY FOR CASINO BANKING TRANSACTIONS!!!

  11. I think you need to check Eleuthera your accountant. The original loan each company takes out from a bank in their local currency is on the balance sheet. Only the swap between the two companies is not shown on each companies balance sheet. There is still a risk that due to exchange rate movements one of the companies may default and large currency loses fall on the other company but it is not quite as dramatic as you imply.

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