Investment Rarities Incorporated
History |  Q & A  |  Endorsements  |  Portfolios  | Flatware | Gold Coins  |  Silver Coins  |  Contact |  Home

Products

Jim Cook

 

RUNAWAY SOCIAL SYMPATHY

Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

..Read More »

The Best of Jim Cook Archive

 
Commentary Of The Month
May 29, 2014
archive print

LEVERAGE

By Graham Summers

This is not an exaggeration. U.S. banks alone have $200 trillion in derivatives trades on their books. This is why it’s such a big deal when you hear that Spanish bonds, or German bonds, or U.S. Treasuries are losing value… because whenever a sovereign bond begins to collapse, the big banks start calling each other asking “the collateral backstopping your trade with us is worth less now…do you have any other collateral?” This is why the European crisis was such a big deal… because those Greek, Spanish, and Italian bonds that were collapsing were backstopping tens of trillions of euros’ worth of trades.

And this game continues to this day worldwide. Globally the derivatives market is north of $700 trillion. Only $70 trillion or so is backstopping this. And that $70 trillion is generally marked at a valuation that is nowhere near the real market value. Imagine if you claimed your $100,000 home was in fact worth $500,000 so you could borrow $5 million to trade the markets. That’s what the big banks are doing. The whole mess is a multi-trillion dollar ticking time bomb waiting to happen. Leverage levels are once again at record highs. Which means we’re set up for another 2008 all over again.