Socio-Economics History Blog

Socio-Economics History Blog

Dr. Paul Craig Roberts: The Global Financial System is Now in an Extremely Dangerous Position that will Result in Some Type of Fantastic Explosion!

by mosesman

Interest rate financial derivatives time bomb!

  • Dr. Paul Craig Roberts: The Global Financial System is Now in an Extremely Dangerous Position that will Result in Some Type of Fantastic Explosion! 
    by www.kingworldnews.com
    Today a former US Treasury Official stunned King World News when he stated that what has taken place in the gold market should have resulted “in an enormous investigation with arrests and indictments.”  Dr. Paul Craig Roberts also warned that the global financial system is now in an extremely dangerous position that will result in “some type of fantastic explosion.”  Below is what Dr. Roberts had to say in this powerful interview. 
    –
    Eric King:  “I have to ask you about this Grant Williams piece that I know you’ve had a chance to look at on the King World News site where it actually illustrates the (extraordinary) paper claims on gold.  We’ve seen a parabolic explosion (on paper claims).  There is a massive run on gold as the inventories at the COMEX are collapsing and we have all of these paper claims.”
    –
    Dr. Roberts:  “What this shows is the consequence of repealing the position limits on speculation, because you now have a situation where derivatives drive the actual physical market.  This is the exact opposite of what sound economics would have.
    –
    In previous times, the actual markets drove things and derivatives were the tail of the dog.  Now the derivatives are the dog.  Now stocks, bonds, gold and the commodities, they are the tail that gets wagged by the derivatives….
    ….
    If we look at Grant Williams’ chart, it says for every ounce of gold we have claims on that gold from 42.5 people (laughter ensues).  So that means the claims on gold are 42.5 times the amount (that exists on the COMEX).
    –
    Well, what happens when it gets to be 50, 60, 100, 200? (more laughter)  At some point, even the people gambling in this market have got to see this can’t continue to work.  I don’t really understand how it’s gone on this long, and I don’t see how it can continue, particularly when the paper claims so vastly exceed the actual supply.”
    –
    read more!

end