John wrote:In 2007, the Bank of International Settlements was reporting that there were over one quadrillion dollars nominal value (that's quadrillion with a "Q") of synthetic credit derivatives in portfolios around the world. That figure included about $60 trillion in credit default swaps, and about $500 trillion in interest rate swaps.
These synthetic securities are not often thought of as "money," but they were at the heart of the credit bubble, since they were used as collateral or in trade for purchases of stock and other assets. During the credit bubble, these were the reason that there was more money in the world each day than there was the day before.
That's when the credit crunch began, and the "deleveraging" process began in financial institutions around the world. Today, the above figures have been approximately cut in half, meaning that there's about $500 trillion less in the world today.
Guest wrote:Vince, everything that come out of this QE game is a liability. The Fed is actually doing the reverse of what people think it is doing. If they are buying the assets of banks, the banks still owe the money to their customers and bond holders. If they are creating new deposits, they have acquired the assets represented by the bonds and the money is still a liability of the banks. All this is doing is allowing the banks to pretend they have money to spend. The bald man with the grey beard is an idiot.
Frank Baynes wrote:This is a great article.
The baby boomers have in effect used their parents, their own, and their children's resources. The mirage of a lifestyle that the baby boomers are used to and feel entitled to (which is based on decades of taking more out of society than they contribute) can only exist and continue, if the ponzi scheme is maintained.
The main perpetrators of the financial fraud we have seen and continue to see are baby boomers. AIG, Madoff, etc.; there are no generation xers pulling the strings here.
jdcpapa wrote:Frank, I am a "baby boomer" and I am a testament to the fact that your generalization is completely false. In fact, I do not know where you get the support for your claim, but I would appreciate it if you would post it.
JR wrote:It ain't me and my cohort that spent it.
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