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Wednesday, December 14, 2011

Derivatives Are the Opiate of the Masses!

Forcing Opium upon China

Good article in Asia Times comparing the British use of Opium to fund their empire and the way the Americans do it with Derivatives. To the writer, both are eventually equally destructive, although derivatives give a longer period of self-delusion before everything tanks totally.... the scenario known as End-Tank-of-Times.

Derivatives and free trade
By Zhuubaajie

Derivatives - Opium 2.0?
After the 2008 financial debacle, derivatives continued to grow in the United States, and America’s economy has not recovered. In America today, the derivatives cancer has now grown to over US$700 trillion (by June of 2011, according to Bloomberg), which is almost 50 times the United States gross domestic product...

The cancer appears unstoppable. This month there is serious talk of American mutual funds adopting derivatives on a large scale, and the US Commodities Commission is setting rules to make trading derivatives more accessible to the small guys. The derivatives casino is going to be $1.5 quadrillion in no time..

The $7.77 trillion in subsidies to the American banking industry also complicated things (Bloomberg expose last week after Freedom of Information Act requests). Now the foreigners are going to point to that as in violation of World Trade Organization rules. What other nation's banks can hope to compete against that level of subsidy? $7.77 trillion is more than all of China's subsidies for all industries over the last 5,000 years...

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