Stephen Leeb: The Derivatives Market – This is Why World Markets Are Incredibly Unstable!
- Stephen Leeb: This is Why World Markets Are Incredibly Unstable!
With a sea of red across virtually all markets, today King World News interviewed acclaimed money manager Stephen Leeb, Chairman & Chief Investment Officer of Leeb Capital Management. Leeb told KWN that global financial markets are in an extraordinarily unstable situation. Leeb also said investors should expect to see more “tumutuous events” ahead. But first, here is what Leeb had to say about the derivatives crisis the world faces today: “When you start talking about quadrillions (of dollars), you are talking about numbers that are 1,000 times larger than $1 trillion. GDP is measured in trillions, and when you start talking quadrillions, you are talking about numbers that dwarf worldwide GDP.”
“So, of course it’s extraordinarily destabilizing. Importantly, it’s beyond any human being to understand all of the interrelationships between all of these paper derivatives various entities possess. Everything is hedging everything else and it becomes so complex that there is virtually no easy way out. When you hear numbers like quadrillions, it’s so detached, relative to the size of the world’s economy. We are in a real mess and it cannot be sorted out in any meaningful way. It’s a matter of when people wake up and start fleeing towards gold.