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Derivatives: The Elephant on the Breakfast Table

The financial crisis forecast by Clif High’s web-bots failed to materialize on Oct. 25/6, as predicted. (1) But that doesn’t mean that the crisis won’t come.

The mammoth Ponzi scheme known as the derivatives bubble is the elephant on the breakfast table that no one wants to talk about. 

It’s so complex that Treasury Secretary Hank Paulson had to get a face-to-face refresher course on the subject from hedge-fund managers in August 2007. (2)

A derivative is a financial instrument that insures against risk. For a regular payment, a company or institution insures itself against a business or market downturn.

If the business falls or the market tanks, so the theory goes, the person issuing the derivative must pay up whatever benefit was promised. 

But what happens when the global market dives and business rolls to stop? No company issuing derivatives can address such an event and that event has happened; hence the panic in the bloated derivatives market.

Former Financial Times journalist Tom Foremski defines derivatives this way: “Derivatives are securities whose value depends on the underlying value of other basic securities and associated risks.” (3)

It’s a gambler’s way of hedging his bet.

Whereas in past years, a person insuring something had to own collateral, with derivatives anyone can insure anything.

Foremski adds: “We cannot even properly define many classes of derivatives because they are highly complex and come in many shapes, sizes, colors and flavors and display different characteristics under different market conditions.” (4)

They include actively-traded futures and options and over-the-counter interest rate swaps and various other commodity and equity instruments.

According to, which submitted a report to the G20 conference in March of this year, they are “paper based on paper … one giant step away from the world of production and consumption.” (5)

Derivatives have become a new way of creating money outside the normal central-bank liquidity rules because they are private contracts between two companies or institutions. They’re not “real” money, but closer to Monopoly money. (6)

Says Foremski: “They are not regulated, not traded on any public exchange, dealt with by private agreement, not transparent, have no open bid/ask market, are unguaranteed, have no central clearing house, and are just not really tangible.”

Speak of a walk on the wild side.

In March 2009, the value of outstanding derivatives worldwide was estimated at USD 1.5 quadrillion (or $1,500 trillion).

That boils down to roughly $170,000 of value lost for every man, woman, and child on the planet if the derivatives market should implode. (7) And it is a virtual certainty that it will implode.

When we speak of chaotic times coming, the crash of the derivatives market is the cause of that chaos.

You and I know that NESARA follows that crash in short order, but many people out there don’t know that and are probably sweating bullets.

Just to show you the risk to the global economy when the derivatives market unwinds, the gross domestic product of the entire world is USD 50 trillion.  The entire world’s GDP is thus 1/30th the size of the derivatives bubble.  

A crash of the derivatives market would make the housing and stock market collapses look incidental by comparison. 

When it goes, it will be the mother of all bubbles. Warren Buffet called derivatives a weapon of mass destruction, a neutron bomb which could destroy the entire world economy. (8)

Others have called it the world’s biggest black market, a banksters’ casino run totally out of control, a financial black hole.  (9)

Paul B. Farrell in Market Watch observed: “Think of this entire unregulated derivatives market like an unsecured, unpredictable nuclear bomb in a … stockpile. It’s only a matter of time.” (10) charged financiers with:

“… trying to blame the current depression on poor people who acquired properties with the help of subprime mortgages and then defaulted, thus – it is alleged – bringing down the entire banking system! This is a fantastic and reactionary myth. The cause of the depression is derivatives, and this means that the perpetrators to be held responsible are not poor mortgage holders, but rather globalized investment bankers and hedge fund operators, the derivatives merchants.” (11)

We know these financiers as an integral part of the “New World Order” or “Illuminati.”  Part of their plan is to consolidate power, during a depression, in the hands of an ever-decreasing number of globalized banks, to enslave the world’s population and, eventually, decrease its numbers by whatever way it can from 6.8 billion to a more manageable 500 million. continued:

“We are now in the throes of a world wide derivatives panic. This panic has been gathering momentum for at least a year, since the fall of Bear Stearns. There is no power on earth which can prevent this panic from destroying most of the current mass of toxic derivatives.

“It is however possible that the ongoing attempts to bail out, shore up, and otherwise preserve the deadly mass of derivatives will destroy human civilization as we have known it. We must choose between the continued existence of derivatives speculation on the one hand, and the survival of human society worldwide on the other.” (12)

If you lose sleep over this situation, I recommend that you next turn to “On NESARA” at to hear the good news.

The banksters’ day is nearly over. With the expected crash, it will end.

We are advised to keep on hand a small but reasonable amount of cash to tide us over the transition between the present-day situation and NESARA. And some groceries stored away. But there is no need to think in survivalist ways.

Our future is assured under new management and a glorious and abundant “wisdom economy.”


(1)  Clif High’s Web Bots predicted an economic crash on October 25/6, 2009. Nothing seemed to occur that day, but the crash, it seems to me, is inevitably coming. See

(2) Paul B. Farrell, “Derivatives the New ‘Ticking Bomb,’” Market Watch, March 10, 2008, at

(3) Tom Foremski, “The Size of the Derivatives Bubble,” Silcon Valley Watcher, Oct. 2008, at .

(4)   Ibid.

(5), “Freeze the 1.5 Quadrillion Derivatives Bubble as a First Step Towards World Economic Recover,” Global Research, March 29, 2009, at

(6) Farrell, ibid.

(7)  Foremski, ibid.

(8)  Ibid.

(9), ibid.; Farrell, ibid.

(10) Farrell, ibid.

(11), ibid.

(1) Ibid.

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