The Global Casino

Driving all of this is the global casino known as the derivatives markets, a market which dwarfs the world's mortgage, bond and the stock markets, combined. While mortgages, stocks and bonds are measured in the trillions of dollars, the derivatives market is measured in quadrillions, or thousands of trillions of dollars. Putting a number to the size of the derivatives market is virtually impossible, but putting a number to the value of the derivatives market is easy--zero!

Derivatives were the great financial innovation of the Greenspan era, in which casino-style bets on the price movements of currencies, bonds and stocks replaced the ownership of those items as a way to make money. The bets thus placed soon far outstripped the levels of the markets upon which they were nominally based, as derivatives became the prime source of "profit" for the financial markets. That these "profits" were entirely fictitious, a fancy form of casino-floor betting chips, was considered irrelevant as long as the market was growing and the funny money was pouring in. Last summer, however, the financial system died, sealing the doom of the derivatives game.

Today, the collapse of the derivatives market is crushing the international financial system, as the speculators fight to save the fictitious "profits" through the largest bailout attempt in history. We stress attempt, because the bailout is not working, and can not work--there isn't enough money in the world to cover all these funny-money bets, and the efforts by the central banks to print that money, is fuelling a hyperinflationary bomb which will wipe out not only the remnants of financial system, but also the governments, national economies and the means of existence for most of the world's population. Hyperinflation will destroy the value of the dollar itself, wiping out pensions, savings, bank accounts, stock portfolios, and all other monetary values, bankrupting households, businesses and governments, leaving the nation destroyed, and, effectively, no longer a nation. We have barely scratched the surface of the horrors that will come, if we continue down this path.

Text taken from Derivatives or Civilization, Take Your Pick