Written by Damon Geller
Everyone knows that the 2008 Global Economic Collapse was caused primarily by banks’ unregulated casino-style gambling. Instead of blackjack and slots, the banks bet massively on financial derivatives known as a “credit default swaps,” which Warren Buffett famously called “weapons of financial mass destruction.” But what most people don’t know is that the criminal banks are ignoring Buffet’s warning and once again betting massively on swaps, to the tune of over $30 TRILLION – 8 times the budget of the United States Government and more than the entire value of the U.S. stock market! Now that the banks have reopened the casino doors, experts predict that these financial WMDs will take down the global economy worse than we’ve ever seen. And there’s only ONE THING you can do to protect yourself.
Big Banks Gamble with YOUR Money
Credit default swaps were invented by banking conglomerate JP Morgan in 1994. Simply put, a credit default swap is an unregulated type of insurance policy against loans going bad. So as banks wrote millions of dangerous loans during the housing bubble, they made an unbelievable fortune selling insurance policies – swaps – on those loans.
But there’s one HUGE problem: When you sell insurance policies, you better hope that most buyers don’t need to collect on them. It’s just like earthquake insurance: as long as there’s no earthquake, insurance companies make a fortune on earthquake insurance. But as soon as there’s a massive earthquake, insurance companies suddenly go out of business and homeowners are left holding the bag. This is exactly why Warren Buffet called swaps financial WMDs – because they are as destructive as an atomic bomb.
And here’s what happened: When the housing bubble burst and millions of loans when bad, banks were suddenly on the hook to pay the swap-buyers hundreds of billions of dollars. And just like earthquake insurers, they didn’t have the money to pay them.
What’s worse, other financial institutions had all kinds of counterparty arrangements with these massive banks, so the whole entire system fell like a house of cards. And you, the American taxpayer, spent trillions of dollars to bail out the “Too Big to Fail” criminal banks. But not before the entire global economy collapsed during the 2008 crisis, costing average Americans trillions in their investments and retirement accounts.
History Is About to Repeat Itself – Only Worse
The scary truth is, nothing has changed. In fact, things are now MUCH worse than in 2008, despite Buffett’s warning. After YOU bailed out the banks and not a single banker was put in jail, the banks turned around and reopened the casino doors. Today, the largely unregulated credit default swap market is now a staggering $30 TRILLION and growing! How much is $30 trillion? Take a look:
U.S. Yearly Budget: $3.5 trillion
U.S. National Debt: $17 trillion
U.S. Stock Market: $23 trillion
Credit Default Swaps: $30 trillion