The BIS says that under their shorter adopted maturity rate adjustment, the world has about $700 trillion in credit derivatives (probably something like the rollovers due for one or two years instead of 2-4 years conceptually). At short term financing at 1%, the rollovers will cost $7 trillion...nobody has it.
The unwinding of credit derivatives at all levels exceeds the world’s ability to pay the rollover fees, and the capability of bailouts has been exceeded...debt (money) must be printed. We know where that leads....inexorably.
It leads us to revolutions, unrest, wars, unemployment, mass migrations of populations.....?
The unwinding of credit derivatives at all levels exceeds the world’s ability to pay the rollover fees, and the capability of bailouts has been exceeded...debt (money) must be printed. We know where that leads....inexorably.
The nations of the world have it so long as everybody pretends to have it. It's not as if physical printing presses have to be fired up any more, and it's not as if the flood of currency fiction has to spill over into the "real" economy. We've been doing it ourselves for over two years now.
Sooner or later, though, some nation is going to stop going along to get along, and then the wheels will fall off in very short order. Look for a major sovereign default and then chaos. It could be years if the smoke and mirrors hold, or it could be next week.
Since derivatives aren't debt, why does short term financing at 1% mean anyone owes $7 trillion?
The unwinding of credit derivatives at all levels exceeds the world’s ability to pay the rollover fees
Then it's good that they don't have rollover fees.
$700 trillion is $100,000 per person on earth; somehow I don’t get the concept of the balance sheet there. It has to be that as I’m taking wheelbarrows full of money out my front door over to my neighbor, he’s bringing sacks full of money in my back door , doesn’t it?