Bix Weir Oct. 23

Bix Weir on Derivatives







Word out of Europe is that the banks derivative books have been
DESTROYED and they are trying to figure out a way to tell the world
without causing major chaos...good luck with that!

Should be a fun week!

May the Road you choose be the Right Road.

Bix Weir
www.Roadto​Roota.com
10:29 AM

Hi All -

I've gotten a couple questions related to my last email statement "Word
out of Europe is that the banks derivative books have been DESTROYED".

I did not mean that they have been physically destroyed (as in shredded)
but rather there has been massive counter-party defaults causing a
chain reaction in derivative defaults. You will begin to see it as banks
announce "out of the blue" losses that nobody had any idea that
specific risk was even in their portfolio because they were not
reported.

I will be posting the second half of my Silver Summit speech next week
but here's the part on derivative risk and how counter party failures
can destroy financial markets. This is also the reason why Bank of
America is trying to pawn their $50T derivative book off on the FDIC...

Silver Derivatives

*Definition - A derivative instrument is a contract between two parties
that specifies conditions under which payments, or payoffs, are to be
made between the parties. It's like a side bet. Futures, options, swaps,
leases etc are all derivative contracts.

The concept behind derivatives is to allow a company to hedge their
risk. For example, to hedge a credit risk of a bank loan a lender can
purchase a Credit Default Swap contract that will payout if the borrower
defaults. Hedging risk is a good thing right? Not always. In reality
the risk of default does not go away but rather is transferred to
another party and a new risk is created in the form of a counter party
risk of the CDS issuer defaulting. The issuer of that CDS can hedge
their new risk by purchasing a CDS from another issuer and so on.
Although the initial concept of a derivative is to hedge your risk, the
more and more derivatives that are created off the first transaction
greatly increase the total risk is to the overall market.

In the last 20 years derivative contracts have ballooned into the
hundreds of trillions of dollars on a notional value basis. In 2008 the
inherent danger in this growth in overall risk became painfully apparent
with the global crash of the financial markets.

Warren Buffet was correct in identifying derivatives as "WEAPONS OF MASS FINANCIAL DESTRUCTION".

If there was any one person to blame for the 2008 financial crisis it
was a woman named Blythe Masters out of the JP Morgan "Financial
Products Division" in London. She was the creator and promoter of the
Credit Default Swap market and built it up over 15 years into a
monstrous 50 Trillion dollar market by 2008 when it all fell apart. The
destruction this amount of "risk hedging" ended up costing the world was
almost incalculable. Today, even after all the losses and bankruptcies,
the Credit Default Swap market stands at over 30 trillion dollars.

So what ever happened to this woman who destroyed the world's financial markets with derivatives...

END

The rest of the speech will be posted on the website next week.

Bix Weir
www.Roadto​Roota.com

Go figure.. I hope you are wrong, BUT I have a feeling you are right. Europe and the euro are doomed to fail. Greece has already started the collapse of PIGSD and we should dee this ugly mess unfold quick.

Good post. Thank you!!