How To Prepare For The Difficult Years Ahead / Very Important Information to Have, Use and Keep!

Note: After you go through this information, you may want to consider passing it on to the responsible heads of households that you are close to, as a heads up for them…
How should people prepare for the difficult years that are coming?  I get asked about that a lot.  Once people really examine the facts, it is not too hard to convince them that an economic collapse is coming.  But once they accept that reality, most of them want to know what they can do to prepare themselves and their families for the hard times that are ahead.  Well, the truth is that it does not have to be complicated.  Many of the things discussed throughout this article are things that most of us should be doing anyway.  Now is not the time to be splurging on luxuries or expensive vacations.  Now is not the time to be going into large amounts of debt.  Instead, we all need to get back to the basics and we all need to do what we can to become more independent of the system.  Just remember what happened back in 2008.  Millions of Americans lost their jobs and millions of Americans lost their homes.  Now experts all over the globe are warning that another great financial crisis that could be just as bad as 2008 (or even worse) is coming.  Those that don’t take the time to prepare this time are not going to have any excuse.

But there is also a lot of sensationalism out there.  There are some people out there that claim that the economy is going to collapse all at once and that we are going to go from where we are now to some type of a post-apocalyptic “Mad Max” society almost overnight.

Well, that is just not going to happen.  We are not going to wake up next week in a world where we are all fighting each other with sharp pointed sticks.

Just like anything else, an economic collapse takes time.  I like to describe what is happening using an analogy from the beach.  When you build a mighty sand castle, it is not totally destroyed by the first wave that comes along, right?

Well, it is the same thing with the U.S. economy.  It was the greatest economic machine that the world has ever seen, and it is most definitely in decline.  But there are stages to that decline.

The “wave” that came along in 2008 did a huge amount of damage.  Our economy has not recovered from that.

Now another wave is coming.  But that will not be the end.  There will be other waves after that.

Eventually, this thing is coming all the way down.  Someday America will be such a horror show that it will be hard to believe that it is the same place that many of us grew up in.

But in the short-term, we are going to be facing a major league recession and millions of Americans will lose their jobs.  It won’t be the end of the world, but for some people it may feel like it.

So when you are talking about “how to prepare”, the truth is that it depends on what kind of time frame you are talking about.

In the long-term, a lot of the things that even the hardcore survivalists are doing will not be nearly enough.

In the short-term, there are things that all of us can do to weather the coming storm….

Get Out Of Debt

The global financial system is headed for a massive crisis.  Just like in 2008, a lot of people are going to lose their jobs and a lot of people are going to lose their homes.

In such an environment, it makes sense to travel as “lightly” as possible.

That means getting rid of debt.

Some forms of debt are worse than others.  Mortgage debt is not that bad.  We all need somewhere to live, and not all of us can run out and immediately pay off our mortgages.

But there are other forms of debt that are absolutely toxic.  A good example of this is credit card debt.  There are very few things that are as good at bleeding your finances as credit card debt is.  For example, according to the credit card repayment calculator, if you have a $6000 balance on a credit card with a 20 percent interest rate and only pay the minimum payment each time, it will take you 54 years to pay off that credit card.

During those 54 years you will pay $26,168 in interest rate charges on that credit card balance in addition to the $6000 in principal that you are required to pay back.  That is before any fees or penalties are even calculated.

But a lot of Americans still have not learned to stay away from credit card debt.  In fact, one out of every seven Americans has at least 10 credit cards.


The truth is that in future years there is a good chance that you may be facing a situation where you are not making as much income, so you want to try to start reducing your expenses right now.  Getting out of debt will help you to do this.

Save Money

A shockingly high number of American families are operating without any kind of financial cushion whatsoever….

-According to a Harris Interactive survey taken in 2010, 77 percent of all Americans are living paycheck to paycheck.

-According to one recent survey, one out of every three Americans would not be able to make a mortgage or rent payment next month if they suddenly lost their current job.

This is one reason why so many Americans have lost their homes and why so many Americans have fallen below the poverty level in recent years.  They simply had no cushion.

Last year, 2.6 million more Americans dropped into poverty.  That was thelargest increase that we have seen since the U.S. government began keeping statistics on this back in 1959.

Don’t let this happen to you.  At a minimum, everyone out there should have a cushion that will cover at least 6 months worth of expenses.  Preferably, you should have a cushion that will last you at least a year.

Yes, I know that is a tall order.  But you would be amazed at how much money the average American family wastes in a typical month.  Almost all of us have areas where we can cut back.

Trust me, in the middle of a major recession you will be really glad that you are sitting on a pile of savings.

Get Independent Of The System

What would you do if you lost your job tomorrow?

Would you have any other income?

How long would it be before you lost your home?

Those are very important questions.

The truth is that the system is failing and so we all need to work hard to become more independent of the system.

So what does that mean?

Well, instead of relying on someone else to employ you indefinitely, you can start up a business in your spare time.  Yes, it will cut into your television time, but if someday you lose your job you will be extremely happy that you still have some income coming in.

Another way of becoming more independent is to start a garden.

Yes, you can run down the street and buy giant piles of cheap food right now, but that will not be the case forever.

Store Food And Focus On The Essentials

I might get into a little trouble for saying this, but the truth is that there is not going to be a major famine in America in 2012.

However, that does not mean that you should not be storing food and other essentials.

In the old days, our grandparents always saved up food.  It was just a natural thing for them to do.  This was especially the case if they lived through the Great Depression.

When hard times come, you will be glad that you have food stored up.  Plus, food is never going to be cheaper than it is today.  Having food stored up is a great hedge against the rising food prices that we will see in the future.

No, we are not going to see hyperinflation by the end of the year like many of the sensationalists are warning.  But someday you will be really glad that you stored up food for yourself and your family.

We live in a world that is becoming more unstable with each passing month.  You never know when the next natural disaster, pandemic, war or national emergency will strike.

It only makes sense to store food and other basic essentials that you will need in the future.

In a previous article entitled “20 Things You Will Need To Survive When The Economy Collapses And The Next Great Depression Begins”, I listed 20 of the things that you would need in the event of a major disaster, a national emergency or a total economic collapse.  These are things that you are going to want to make sure that you have ready right now, because after the crisis begins it may be too late to prepare….

#1) Food Storage

#2) Clean Water

#3) Shelter

#4) Warm Clothing

#5) An Axe

#6) Lighters Or Matches

#7) Hiking Boots Or Comfortable Shoes

#8) A Flashlight And/Or Lantern

#9) A Radio

#10) Communication Equipment

#11) A Swiss Army Knife

#12)  Personal Hygiene Items

#13) A First Aid Kit And Other Medical Supplies

#14) Extra Gasoline (But Be Very Careful How You Store It)

#15) A Sewing Kit

#16) Self-Defense Equipment

#17) A Compass

#18) A Hiking Backpack

#19) A Community

#20) A Backup Plan

In the comments to that article, the readers suggested the following additional items….

KA-Bar Fighting Knife

Portable Solar Charger (cell phones etc.)


Extra Batteries


A Camp Stove


Pet Food / Bag

Heirloom Seeds


An LED Headlamp



Calcium Hypochlorite

Ziplock Bags

Maps Of Your Area


Sleeping Bags

Extra Socks


Gold And Silver Coins For Bartering- Learn how to buy gold & silver

Once again, a lot of these things are not going to be needed right away.  The economy is going to go through a lot more ups and downs before it totally dies.

In the short-term, keep an eye on the European debt crisis, the Japanese debt crisis and the U.S. debt crisis.  There are a lot of similarities between what happened back in 2008 and what is happening now.

And what happened following the crisis of 2008?

Unemployment shot through the roof.

So be prepared for that.

Make a plan for how you and your family will survive if you end up unemployed.

Also, when it comes to “how to prepare”, there is one aspect that is often overlooked.

During the difficult years ahead, we are all going to have to be mentally and spiritually tough.

It won’t matter how good your physical and financial preparations are if you are cowardly and paralyzed by fear.

The times that are coming are going to test all of our hearts.

Some people are going to make it and some people aren’t.

Some people will become so consumed with fear that they will give up completely.

Don’t let that happen to you.

Prepare your heart, soul, mind and body right now for what is coming.  For those that are cowardly the years ahead will be a total nightmare, but for those that overcome the fear the years ahead have the potential to be a great adventure.

Original Source

This information is sourced from the original website/author listed above. This news is for informational purposes only and does not necessarily represent the views of

________________________________________________ - Buy Gold & Silver


Compensation Disclosure: This website is compensated (with no additional costs to the purchaser) from purchases made from links or ads on this page. The site owner is not an employee or a representative of the companies that have ads or links on this site.

Share this page with family and friends:


When it Comes to Jobless Figures Dishonesty and Propaganda Reign | NationofChange

Article image

Once again we got a cheery re­port from most of the media about em­ploy­ers hir­ing, al­beit “not enough,” and about the job­less rate falling, al­beit “it’s still too high.”

The prox­i­mate cause of this lat­est round of pro­pa­ganda from the cor­po­rate media is the lat­est monthly job­less fig­ure re­ported out by the Bu­reau of Labor Sta­tis­tics, which said that em­ploy­ers had added 80,000 net new jobs (ac­tu­ally they found that pri­vate sec­tor em­ploy­ers had added 104,000 jobs while pub­lic agency em­ploy­ers had pink-slipped 24,000 peo­ple), and that the of­fi­cial un­em­ploy­ment rate was 9.0 per­cent, just a notch lower than last month’s 9.1 per­cent fig­ure.

The As­so­ci­ated Press, which is now the de facto na­tional desk for the evis­cer­ated na­tional news­me­dia, trum­peted these ane­mic re­sults with a head­line read­ing: Em­ploy­ers add 80K jobs, Rate dips to 9.0 pct. This was fol­lowed by an up­beat lead, cred­ited to AP Eco­nom­ics Writer Christo­pher S. Ru­gaber (who surely should know bet­ter if he’s an eco­nom­ics spe­cial­ist) that read: “WASH­ING­TON (AP) — The U.S. jobs cri­sis may be eas­ing slightly on the strength of a fourth straight month of mod­est hir­ing and a dip in the un­em­ploy­ment rate.”

Only it’s not that sim­ple. For one thing, econ­o­mists agree that the econ­omy would have to be adding 100,000 jobs a month just to keep up with the num­ber of peo­ple who are en­ter­ing the labor force, and dou­ble that to make any real progress to­wards low­er­ing the job­less num­ber, so 80,000 jobs is re­ally going back­wards. For an­other, most of the jobs being cre­ated are low-pay­ing and often tem­po­rary, which is not going to do much if any­thing to boost con­sumer spend­ing, which ac­counts for al­most three-quar­ters of Gross Do­mes­tic Econ­omy in the hol­lowed-out US econ­omy. (In fair­ness to Ru­gaber, a day later he wrote a bet­ter, less rosy piece, in which he pointed out that among the coun­try’s 14 mil­lion of­fi­cially job­less, the per­cent­age re­ceiv­ing un­em­ploy­ment ben­e­fits has fallen from 75% last year to just 48% this year, be­cause so many peo­ple have been out of work for more than a year–a third of all those un­em­ployed–that their ben­e­fit checks have run out. That tells you how se­ri­ous the job­less­ness re­ally is.)

Credit goes to Yahoo! News, which at least ac­knowl­edged right away that these lat­est stats from the BLS mean things are ba­si­cally bad, not good news. In this dis­patch, head­lined Oc­to­ber Jobs Re­port: Deja Vu All Over Again, re­porter Daniel Gross cor­rectly called at­ten­tion to the fact that the pub­lic sec­tor was un­der­min­ing the mea­ger job gains made by the pri­vate sec­tor, as well as the fact that the de­cline in the job­less fig­ure is not the re­sult of the new jobs, but of more peo­ple just giv­ing up look­ing for non-ex­is­tent jobs and being dropped from the sta­tis­tics.

Gross also properly noted that the so-called U-6 figure for unemployment, which was used as the standard measure for unemployment until the 1980s when it was deep-sixed by the Reagan administration in favor of a measure that no longer counts people who have given up looking for a job and people who have taken part-time employment because they cannot find full-time work, is still at 16.2 perc     jjj Gross also properly noted that the so-called U-6 figure for unemployment, which was used as the standard measure for unemployment until the 1980s when it was deep-sixed by the Reagan administration in favor of a measure that no longer counts people who have given up looking for a job and people who have taken part-time employment because they cannot find full-time work, is still at 16.2 percent.To continue re To see the variations of statistics (deception) in graph form and to continue reading, click on the link below.

Gross also properly noted that the so-called U-6 figure for unemployment, which was used as the standard measure for unemployment until the 1980s when it was deep-sixed by the Reagan administration in favor of a measure that no longer counts people who have given up looking for a job and people who have taken part-time employment because they cannot find full-time work, is still at 16.2 percenvia When it Comes to Jobless Figures Dishonesty and Propaganda Reign | NationofChange.

Euro Zone: The Euro ‘Event’ Will Cause Depression: HSBC – CNBC

First an important note about protecting yourself from the effects of a dollar crash…                  

There are things you can do to protect the paper wealth you have accumulated (no matter how small or large it is) from the debasing monetary policies of our government and Federal Reserve. Our currency (dollar) is losing value and will continue to do so as long as the FED and Federal government continue to believe that printing more money is a good way to pay their debts and to stimulate the economy. This is the typical debasement policy of any fiat currency that has ever been in existence. This is why the longest any fiat (paper currency) has lasted is about 40 years. Our current dollar is about that age now. As the government prints more and more dollars to pay their debts (because they can) your buying power will decrease. Remember, prices are not going up, the buying power of your dollar has been stolen from you. So you see the symptom of your dollar purchasing less and less, is sky rocketing prices.                                      

You can preserve your wealth here.                          


You can purchase food storage now (before prices sky-rocket) to feed your family for as long as it takes for a new currency to be established in the event of a currency collapse, or for any other emergency that could tie up food supplies.

Not a bad idea for a possible unemployment crisis if it were to happen to you as well. Shop for food storage here.




Published: Monday, 7 Nov 2011 | 1:10 AM ET 

By: Patrick Allen

CNBC EMEA Head of News

With no end in sight to the euro zone debt crisis, events in Athens and Rome are likely to dominate investor sentiment over the coming days.

Whether it is Berlusconi hanging onto power or the talks over forming a new government in Greece, it will be impossible to ignore the euro zone debt crisis.

Analysts at HSBC have been looking at what they call the “risk on – risk off paradigm” which they believe has been the dominant feature of the market since the start of the financial crisis back in 2007. Their analysis does not make good reading, unless you are betting on risk off.

“The recent events in the euro zone have caused the risk on – risk off paradigm to strengthen even further. Over the last week it has almost become a caricature of itself: we saw extreme euphoria on the back of a purported bailout package followed days later by intense despair induced by the prospect of a Greek referendum,” said David Bloom, Global Head of FX Strategy at HSBC in a research note.

“These dramatic shifts in sentiment led to rollercoaster moves in risk asset prices,” Bloom said.

With cross-asset correlations at an all-time high according to HSBC, Bloom says market participants are comparing the current Greek crisis to Lehman Brothers and has this warning for investors: “Market stresses are currently far worse than after Lehman and the event which people are worried about has not even happened yet!”

“Despite this, perceptions about the possibility of the event are already driving markets to an unheard of level,” said Bloom.

When the event, whatever it is, does actually happen it will be very bad news for the global economy according to Bloom.

“Were the event to actually occur it would lead to the great depression Mark II,” said Bloom.

Original Source

What Is the Real Unemployment Rate?

Prepare now for the unemployment threat and the economy worsening. Stock up on food while it is still relatively inexpensive. Learn how to protect what money you do have so it won’t lose value during the coming hyper-inflation that many economists are predicting with in the next year or so. Go to Food Storage and Gold and Silver and get informed and prepared. Very important information. Spread the word!                                                                              ______________________________________________


October 29, 2011

unemployment-line-749345A closer look at the Department of Labor’s employment report earlier this month reveals that the real unemployment number is different from the “headline” number. Restated, the Bureau of Labor Statistics (BLS) should have concluded that unemployment is at least 9.1 percent, and most certainly much higher.If the BLS adds the 9.3 million who are “involuntarily” employed part time because their hours were cut back or because they couldn’t find a full-time job, that brings the total to 23.3 million un- (or under) employed. Another 2.5 million persons were “marginally attached” to the labor force — those who were not working, but wanted to work and had tried to find work in the past year without success — which brings the total to 25.8 million. According to the BLS, the civilian work force is just over 154 million, so doing the math give a potentially more accurate number: 16.8 percent.If those who have given up looking for work altogether were counted, that would add more than another nine million, according to John Williams at That brings the unemployment number to 23 percent. This is confirmed by a recent Gallup poll that nearly one in every five Americansdescribe themselves as underemployed but it doesn’t count those who hold more than one job just to make ends meet.

Taking into account those without work, those seeking work but unable to find it, those working in positions for which they are over-qualified, those who have given up looking for work, and those barely scraping by at the poverty level, the “headline” rate of unemployment offered by the Department of Labor greatly understates unemployment by at least a factor of two and perhaps by as much as a factor of three. Unemployment and underemployment is pushing 25 percent and may go even higher as the economy moves into “another” recession (if the first one ever ended) and maybe even a depression.


Original Source

Prepare now for the unemployment threat and the economy worsening. Stock up on food while it is still relatively inexpensive. Learn how to protect what money you do have so it won’t lose value during the coming hyper-inflation that many economists are predicting with in the next year or so. Go to Food Storage and Gold and Silver and get informed and prepared. Very important information. Spread the word!

Poverty in America: Faces behind the figures – CBS News

Think you are immune to unemployment or underemployment for a time? Get food storage now while you can afford it, so your family will eat even if you can’t afford it if an employment emergency were to visit you for a time.

Click here for the Why, What and How of Your Emergency Preparedness, Survival gear, freeze-dried food food storage, bug out bags, camping gear and apparel, gold and silver, finances, economical solar power, solar back up, conventional home back up power generators.


In this Sept. 16, 2011 photo, Kris Fallon holds her 4-month-old daughter Addison, in Palatine, Ill., as her 15-year-old son Gared Fallon looks on.

(Credit: AP)

At a food pantry in a Chicago suburb, a 38-year-old mother of two breaks into tears.

She and her husband have been out of work for nearly two years. Their house and car are gone. So is their foothold in the middle class and, at times, their self-esteem.

“It’s like there is no way out,” says Kris Fallon.

She is trapped like so many others, destitute in the midst of America’s abundance. Last week, the Census Bureau released new figures showing that nearly one in six Americans lives in poverty — a record 46.2 million people. The poverty rate, pegged at 15.1 percent, is the highest of any major industrialized nation, and many experts believe it could get worse before it abates.

The numbers are daunting — but they also can seem abstract and numbing without names and faces.

Associated Press reporters around the country went looking for the people behind the numbers. They were not hard to find.

There’s Tim Cordova, laid off from his job as a manager at a McDonald’s in New Mexico, and now living with his wife at a homeless shelter after a stretch where they slept in their Ford Focus.

There’s Bill Ricker, a 74-year-old former repairman and pastor whose home is a dilapidated trailer in rural Maine. He scrapes by with a monthly $1,003 Social Security check. His ex-wife also is hard up; he lets her live in the other end of his trailer.

There’s Brandi Wells, a single mom in West Virginia, struggling to find a job and care for her 10-month-old son. “I didn’t realize that it could go so bad so fast,” she says.

Some were outraged by the statistics. Marian Wright Edelman of the Children’s Defense Fund called the surging child poverty rate “a national disgrace.” Sen. Bernie Sanders, I-Vt., cited evidence that poverty shortens life spans, calling it “a death sentence for tens and tens of thousands of our people.”

Overall, though, the figures seemed to be greeted with resignation, and political leaders in Washington pressed ahead with efforts to cut federal spending. The Pew Research Center said its recent polling shows that a majority of Americans — for the first time in 15 years of being surveyed on the question — oppose more government spending to help the poor.

“The news of rising poverty makes headlines one day. And the next it is forgotten,” said Los Angeles community activist and political commentator Earl Ofari Hutchinson.

Such is life in the Illinois town of Pembroke, one of the poorest in the Midwest, where schools and stores have closed. Keith Bobo, a resident trying to launch revitalization programs, likened conditions to the Third World.

“A lot of the people here just feel like they are on an island, like no one even knows that they exist,” he said.

Struggling on $18,000 a year

It’s hard to find some of the poorest residents in Pembroke. They live in places like the tree-shaded gravel road where the Bargy family’s dust-smudged trailer is wedged in the soil, flanked by overgrown grass.

By the official numbers, Pembroke’s 3,000 residents are among the poorest in the region, but the problem may be worse. The mayor believes as many as 2,000 people were uncounted, living far off the paths that census workers trod.

The staples that make up the town square are gone: No post office, no supermarket, no pharmacy, no barber shop or gas station. School doors are shuttered. The police officers were all laid off, a meat processing plant closed. In many places, light switches don’t work, and water faucets run dry. Residents let their garbage smolder on their lawn because there’s no truck to take it away; many homes are burned out.

Ken Bargy outside his trailer in Pembroke, Ill.

Ken Bargy outside his Pembroke, Ill., trailer.

(Credit: AP)

Ken Bargy, 58, had to stop working five years ago because of his health and is now on disability. His wife drives a school bus in a neighboring town. He sends his children, 15 and 10, to school 20 miles away. In the back of the trailer, he offers shelter to his elderly mother, who is bedridden and dying of cancer.

The $18,000 the family pieces together from disability payments and paychecks must go to many things: food, lights, water, medical bills. There are choices to make.

“With the cost of everything going up, I have to skip a light bill to get food or skip a phone bill to get food,” he says. “My checking account is about 20 bucks in the hole.”

About 75 miles away, in the Chicago suburb of Hoffman Estates, dozens of families lined up patiently outside the Willow Creek Care Center as truckloads of food for the poor were unloaded.

Among those waiting was Kris Fallon of nearby Palatine, mother of a teen and an infant, who hitched a ride with a friend.

Original Source Link Below

Poverty in America: Faces behind the figures – CBS News.
Think you are immune to unemployment or underemployment for a time? Get food storage now while you can afford it, so your family will eat even if you can’t afford if an employment emergency were to visit you..

Click here for the Why, What and How of Your Emergency Preparedness, Survival gear, freeze-dried food food storage, bug out bags, camping gear and apparel, gold and silver, finances, economical solar power, solar back up, conventional home back up power generators.

“Three Things” | A Kauffman Foundation Video

The U.S. Economy

The Very Engine That Drives the U.S. Free Market Economy is Being Undermined

Major International Corporations, Major Banks in Collaboration with the Federal Government are Complicit in Stiffling Entrepreneurship Through Unfriendly Legislation and Mandates Such as Obamacare.

A Quick Look (video) at How Entrepreneurship Drives The Economic Engine

Click here to see video…  

The Horrific Derivatives Bubble That Could One Day Destroy The Entire World Financial System

Today there is a horrific derivatives bubble that threatens to destroy not only the U.S. economy but the entire world financial system as well, but unfortunately the vast majority of people do not understand it.  When you say the word “derivatives” to most Americans, they have no idea what you are talking about.  In fact, even most members of the U.S. Congress don’t really seem to understand them.  But you don’t have to get into all the technicalities to understand the bigger picture.  Basically, derivatives are financial instruments whose value depends upon or is derived from the price of something else.  A derivative has no underlying value of its own.  It is essentially a side bet.  Originally, derivatives were mostly used to hedge risk and to offset the possibility of taking losses.  But today it has gone way, way beyond that.  Today the world financial system has become a gigantic casino where insanely large bets are made on anything and everything that you can possibly imagine.

The derivatives market is almost entirely unregulated and in recent years it has ballooned to such enormous proportions that it is almost hard to believe.  Today, the worldwide derivatives market is approximately 20 times the size of the entire global economy.

Because derivatives are so unregulated, nobody knows for certain exactly what the total value of all the derivatives worldwide is, but low estimates put it around 600 trillion dollars and high estimates put it at around 1.5 quadrilliondollars.

Do you know how large one quadrillion is?

Counting at one dollar per second, it would take 32 million years to count to one quadrillion.

If you want to attempt it, you might want to get started right now.

To put that in perspective, the gross domestic product of the United States is only about 14 trillion dollars.

In fact, the total market cap of all major global stock markets is only about 30 trillion dollars.

So when you are talking about 1.5 quadrillion dollars, you are talking about an amount of money that is almost inconceivable.

So what is going to happen when this insanely large derivatives bubble pops?

Well, the truth is that the danger that we face from derivatives is so great that Warren Buffet has called them “financial weapons of mass destruction”.

Unfortunately, he is not exaggerating.

It would be hard to understate the financial devastation that we could potentially be facing.

A number of years back, French President Jacques Chirac referred to derivatives as “financial AIDS”.

The reality is that when this bubble pops there won’t be enough money in the entire world to fix it.

But ignorance is bliss, and most people simply do not understand these complex financial instruments enough to be worried about them.

Unfortunately, just because most of us do not understand the danger does not mean that the danger has been eliminated.

In a recent column, Dr. Jerome Corsi of WorldNetDaily noted that even many institutional investors have gotten sucked into investing in derivatives without even understanding the incredible risk they were facing….

A key problem with derivatives is that in the attempt to reduce costs or prevent losses, institutional investors typically accepted complex risks that carried little-understood liabilities widely disproportionate to any potential savings the derivatives contract may have initially obtained.

The hedge-fund and derivatives markets are so highly complex and technical that even many top economists and investment-banking professionals don’t fully understand them.

Moreover, both the hedge-fund and the derivatives markets are almost totally unregulated, either by the U.S. government or by any other government worldwide.

Most Americans don’t realize it, but derivatives played a major role in the financial crisis of 2007 and 2008.

Do you remember how AIG was constantly in the news for a while there?

Well, they weren’t in financial trouble because they had written a bunch of bad insurance policies.

What had happened is that a subsidiary of AIG had lost more than $18 billion on Credit Default Swaps (derivatives) it had written, and additional losses from derivatives were on the way which could have caused the complete collapse of the insurance giant.

So the U.S. government stepped in and bailed them out – all at U.S. taxpayer expense of course.

But the AIG incident was actually quite small compared to what could be coming.  The derivatives market has become so monolithic that even a relatively minor imbalance in the global economy could set off a chain reaction that would have devastating consequences.

In his recent article on derivatives, Webster Tarpley described the central role that derivatives now play in our financial system….

Far from being some arcane or marginal activity, financial derivatives have come to represent the principal business of the financier oligarchy in Wall Street, the City of London, Frankfurt, and other money centers. A concerted effort has been made by politicians and the news media to hide and camouflage the central role played by derivative speculation in the economic disasters of recent years. Journalists and public relations types have done everything possible to avoid even mentioning derivatives, coining phrases like “toxic assets,” “exotic instruments,” and – most notably – “troubled assets,” as in Troubled Assets Relief Program or TARP, aka the monstrous $800 billion bailout of Wall Street speculators which was enacted in October 2008 with the support of Bush, Henry Paulson, John McCain, Sarah Palin, and the Obama Democrats.

But wasn’t the financial reform law that Congress just passed supposed to fix all this?

Well, the truth is that you simply cannot “fix” a 1.5 quadrillion dollar problem, but yes, the financial reform law was supposed to put some new restrictions on derivatives.

And initially, there were some somewhat significant reforms contained in the bill.  But after the vast horde of Wall Street lobbyists in Washington got done doing their thing, the derivatives reforms were almost completely and totally neutered.

So the rampant casino gambling continues and everybody on Wall Street is happy.

For now.

One day some event will happen which will cause a sudden shift in world financial markets and trillions of dollars of losses in derivatives will create a tsunami that will bring the entire house of cards down.

All of the money in the world will not be enough to bail out the financial system when that day arrives.

The truth is that we should have never allowed world financial markets to become a giant casino.

But we did.

Soon enough we will all pay the price, and when that disastrous day comes, most Americans will still not understand what is happening.

Original Source