derivatives

[oldickeastman]

It's a one of a kind price-fixing scam  --  the derivatives in this play are not really gambles on undertain outcomes.  For those who are controlling the interest climb  -- a death blow to the upper loop and to all derivatives players not in the club that is doing the controlling.

Interest rates are climbing.  What will it mean?  The U.S. government must collect much more from austeirty to pay  on the national debt as it refinances its short-term debt.  If  the average rate of interest on U.S. government debt rose to  6 percent (and it has actually been much higher in the past), the federal government would be paying out about a trillion dollars a year just in interest on the national debt.  Rapidly rising interest rates impose massive losses on bond investors.  If U.S. bond yields rise by an average of 3 percentage points the future value of bonds investors hold would drop a trillion dollars, but they are willing to endure that for what those rightly positioned in derivatives would gain.  There are  more than 441 TRILLION dollars worth of interest rate derivatives in play, on speculative "horse race" bets on interest rates --  according to the Bank for International Settlements which "clears checks" among central banks.  Here is where shorting and longing in Macroeconomic-level gambles (in a rigged game) are made.  The current big play has never been made before, nor anything close to it.  If you play the trick you risk being shut down, so you wait for the big play that makes all that waiting worthwhile.  This may be it.  

It's a one of a kind price-fixing scam  --  the derivatives in this play are not really gambles on undertain outcomes.  For those who are controlling the interest climb  -- a death blow to the upper loop and to all derivatives players not in the club that is doing the controlling.So what does all of this mean?

The Fed buys and sells bonds to a few big dealers from the New York Federal Reserve Bank only.  The Federal Reserve Board is not in control of these decisions.  The Fed is a price taker and the prices are administered on the second floor of the New York Fed by the small number of representatives of the biggest merchant banking houses, all under orders to carry out plans developed by the heads of the families in the City of London, Frankfort, Wall Street, Hong Kong, Shanghai.  Just as the Fed is controlled by Goldman Sachs and as sure as the fact that Larry Summers will replace Bernanke as Fed Chairman -- so these interests -- the recipients of all the QE quantitative easing  -- which people are mislead to think is "inflation" of money going to our economy  -- the Austrian School disinformation smoke bomb!  -- when in fact -- the truth is that we are stuck in the lower-loop of a two-loop system.  I've made several diagrams of the two-loop system to try to express this great secret of our economy  -- the secret that the lower loop gets squeezed into greater and greater deflation through interest drain  -- no to be pushed beyond the point of endurance by the interest rate increase coming in the trough of a lower-loop depression that is not even acknowledged by the Fed, the Treasury, the media or the leading economists (who are only leading because they gave up economics for class-warfare propaganda in a class war where thy have chosen what they think is the winning side, the side that buys their academic chairs and provides grants for their departments and think tanks and puffs them in the Banking Mafia's string of media networks  etc.  The lower loop is in deflation, but the world tells us we are in inflation  -- and so the lower loop gets "anti-inflation" policy which is really strangulation by deflation  -- interest drain, loan calls, bankruptcies, and austerity in all of the lower loop sectors.

 

 

 

 

 

The diagram that is missing is the one showing lower-loop middle class  -- individuals, investors, municipalities etc. participating in the derivatives market thinking they are heding risk when in fact they are walking into a trap, a rigged gambling trap.  The diagram would be an arrow coming from Household Sector and an arrow coming from Business sector and an arrow coming from Government sector each labelled derivatives bets.  And the arrows would go to a box labelled Derivatives Risk Management (Speculation) Dealers (rigged game).  The bind the lower loop players are in is like the bind the S & Ls were in when they had long term mortgages paying them 7% (from people who bought homes in the Nixon Years)  while having to pay 10% to attract depositors to keep up their short term money flow  -- which forced them to buy junk bonds  -- and so the economy invested in things likely to fail rather than in things likely to succeed -- because S & Ls needed junk investments that paid high risk.  But in the case of people buying deriviatives  -- deflation forced them to take extreme risks, because they are so near the edge of failure, that they "bet" the deriviatives market to cover them in the event of this or that.  But the fixing of the "odds" in these gambles was all dishonest, because it was never based on market forces.  It was based on administered prices  -- like the Libor was fixing interest rates rather than reflecting the markets.  So it ever is with the Money Mafia?