This is a global dilemma, but the U.S. banking system shares in the blame. According to the latest report from the Office of the Comptroller, the top five “too big to fail” U.S. banks have over $40 trillion in derivatives exposure… EACH!!
JPMorgan Chase Total Assets: $2,527,005,000,000 (about $2.5 trillion) Total Exposure To Derivatives: $65,504,143,000,000 (more than $65 trillion)
Citibank Total Assets: $1,882,849,000,000 (almost $1.9 trillion) Total Exposure To Derivatives: $64,810,159,000,000 (nearly $65 trillion)
Goldman Sachs Total Assets: $868,995,000,000 (less than a trillion dollars) Total Exposure To Derivatives: $58,204,853,000,000 (more than $58 trillion)
Bank of America Total Assets: $2,126,138,000,000 (more than $2.1 trillion) Total Exposure To Derivatives: $56,950,418,000,000 (nearly $57 trillion)
Morgan Stanley Total Assets: $814,511,000,000 (less than a trillion dollars) Total Exposure To Derivatives: $43,910,113,000,000 (nearly $44 trillion)
To think Goldman Sachs is leveraged at 70:1, meaning for every 70 derivatives contracts they have, there is only one asset to back it. How is this even legal? Our economic system has been turned into one big casino; no wonder Warren Buffett’s father wanted to contain this madness by using a gold standard.
Of course, it isn’t just U.S. banks that are leveraged to the tilt; we’re seeing it from institutions across the globe. Needless to say it won’t take much of a downturn or a few derivative losses to send the global economy into a tailspin and to trigger the great liquidity pyramid to sell off.
When money starts to move away from fiat they will either move to precious metals or cryptocurrencies.
Stay tuned for more