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Get Ready for Worldwide Currency Devaluation

Wednesday, December 21, 2011, 10:03 AM
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Get Ready for Worldwide Currency Devaluation

Wednesday, December 21, 2011

Executive Summary

  • The risk of cascading derivatives failures is the "nuclear option" scaring central planners into doing everything in their power to prop up the financial system
  • The loss of small investors leaves market prices more vulnerable to the growing percentage of fickle, short-term, "hot money" trading systems
  • Removal of China's 'deep pockets' from the EU and US credit markets could easily cause them to seize up
  • Why currency devaluation via inflation still seems the likely endgame
  • Recommendations for increasing your financial and personal resilience to this outcome

Part I: Worse Than 2008

If you have not yet read Part I, available free to all readers, please click here to read it first.

Part II: Get Ready for Worldwide Currency Devaluation

Derivatives

You'd think that after AIG blew up spectacularly and Lehman choked on a hairball of tangled derivatives (one that is still being picked apart), the lesson would have been learned and derivatives reduced in both size and complexity.

Unfortunately, that lesson was not learned, and we have to square up to the fact that derivatives are now roughly $100 trillion larger in aggregate than they were in 2009:

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