THE WORLD'S BIGGEST AND MOST DANGEROUS CASINO

The total net worth of all outstanding derivatives contracts is a staggering 552.9 trillion dollars according to the Bank for International Settlements. Total US debt right now stands close to 19 trillion dollars. The entire economy of the world in real goods and services is evaluated at around $78 trillion annually. The derivative market is 7 times the value of every good and every service provided around the world in an entire year.

A derivative is a speculative contract, a bet placed on stocks, mortgages, interest rates, the price of commodities like gold, silver, coffee, oil or the possibility of a company or even a nation to default. Basically, right now, there is nothing of economic worth that does not have some sort of derivative attached to it. All derivatives are bets. The players on the derivative market gamble trillions on the future price of the asset to which the derivative is attached to. In a nutshell, the derivatives market or more correctly put, the derivatives casino is where Big Banks and other financial institutions place their bets on every aspect of the world economy.

Big US banks bet on derivatives

1. Citigroup

• Total Assets: $ 1.9 trillion 
• Total Exposure To Derivatives: $ 57 trillion (30 times larger than their assets)

2. JPMorgan Chase

• Total Assets: $ 2.3 trillion 
• Total Exposure To Derivatives: $ 72 trillion (31 times larger than their assets)

3. Goldman Sachs

• Total Assets: $ 938 billion
• Total Exposure To Derivatives: $ 41 trillion (43 times larger than their assets)

4. Bank Of America

• Total Assets: $ 2.2 trillion
• Total Exposure To Derivatives: $ 44 trillion (20 times larger than their assets)

5. Morgan Stanley

• Total Assets: less than a trillion dollars
• Total Exposure To Derivatives: more than 31 trillion dollars (31 times larger than their assets)

6. Wells Fargo

• Total Assets: $ 1.3 trillion
• Total Exposure to Derivatives: $ 44 trillion (33 times larger than their assets)

Overall, the biggest U.S. banks collectively have more than 247 trillion dollars of exposure to derivatives contracts. That is an amount of money that is more than 13 times the size of the U.S. national debt, and it is a ticking time bomb that could set off financial Armageddon at any moment. This is gambling on the future of the world economy on an unprecedented scale. And just like every other bubble before it, the Too Big to Fail Derivatives Bubble will burst. There is no way these institutions could cover the potential losses that could come from derivatives contracts. They just don’t have enough assets, which means an economic collapse could cause any or all of these institutions to fail. The failure of any of these “too big to fail” institutions could cause the entire global financial system to fail.

During Obama's presidency, the US debt doubled reaching almost $19 trillion yet the economy grew at a modest pace of 2% per year. Compare that to the doubling of the derivatives market and you begin to realize the level of economic pain we are about to feel. This will make the Great Depression of the ‘30s and the Great Recession of 2008 feel like a picnic.

Deutsche Bank

• Total Assets: $ 575 billion
• Total Exposure to Derivatives: $ 55.6 trillion (96 times larger than their assets, it is also 5 times greater than the GDP of Europe and more or less the same as the GDP of the world).