- “Losses Will Be Devastating,” Triggering A Derivatives Blowup And Worldwide Collapse
Today the man who remarkably predicted the collapse of the euro against the Swiss franc warned King World News that “losses will be devastating,” triggering a derivatives blowup and worldwide collapse.
Egon von Greyerz: “Eric, I’m looking at the bond markets, worldwide. What we’ve seen now both in the U.S. and in Germany is that rates have increased pretty fast in the last few weeks….
When the big bond market collapse finally unfolds, the losses will be devastating for investors. The problem is that not only will be investors be hurt, but the derivatives market will literally implode. There are well over one quadrillion dollars worth of derivatives on the books of various institutions around the world, and there is an interest rate element tied to virtually every single derivative.
When interest rates finally spike, a lot of those derivatives positions will blowup, taking down many of the major institutions with them. So this is a market that we must watch very carefully now because as the global bond market bubble pops, it will cause a massive worldwide collapse.