1 July 2008

Mr Spock on BIS report

1. A Lengthy timeline of the credit collapse beginning one year ago with the Bear Stearns hedge funds disintegration.

2. Literally dozens of graphs and charts showing how credit spreads, MBS/CDO markets, futures markets and other indices have been gyrating out of control during this crisis.

3. While many excuses are given for the "credit crunch" (a term that this Vulcan finds particularly offensive) including a "Minsky Moment", nary a mention of fiat currency, fractional reserve lending, central banking or derivatives is made as a possible cause for the ills of the economic system.

4. Daily currency gambling and speculation has now reached...are you ready for this number?...$3.5 trillion per day. Think about that for a moment. Currencies, which forty years or so ago under Bretton Woods had zero speculation, now comprise a casino that dwarfs any other market on this planet.

5. Finally, buried on page 200 of the 260-page report is the balance sheet of the BIS. Interestingly, these "sophisticated", worldy-wise, avant-garde, hip, new-age, fiat-worshipping, electron-flinging bankers hold $31 billion dollars worth of gold. Which is roughly double what they held last year.

(MrSpock Conclusion): If ever there was a report designed to obscure by sheer volume, this would be it. However, if one is persistent and digs deeply enough, they will find many a nugget of information and a also be rewarded with a frightening look at what constitutes the global monetary system on your planet.

BIS report

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