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Central Missouri | Having read Jim Sinclair for years now I have alot of faith in what he says. Saying that, it is almost impossible to predict when the worst will be but JS has mentioned 2011 as being very bad. There is a 500 trillion dollar mountain of derivatives world wide. The mortgage derivative meltdown in the U.S. is st the tip of the iceberg. What will melt down next? There are derivatives written on everything financial that has to do with lending. There is no market that regulates derivatives. Thus there is no market to establish value. If you have a so called asset, that you value at X on your balance sheet,thatone is willing to buy,what price do you place on that asset? Well the price (value) quickly approaches 0That is the problem with derivatives. No one will pay face value much less anything close to face for them. Therefore you have to now write down the value on your balance sheet. This has placed many a financial institution in peril lately. Thus the infusion of cash from the central banks and the stories that middle east co's are purchasing large portions of company X,Y, and Z. Remember this is only the tip of the derivative iceberg. As one poster stated, The shame is that the financial wizkids that developed these will probably ride-off into the sunset,as ungodly wealthy individuals, and leave the rest of us (the U.S. Govt) holding the bag. | |
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impending financial disaster
