This article covers a lot and takes on the demise of the world banking system at different levels. If you are not interested in specifics, be sure to watch the video at the bottom of this post. It contains the bigger picture of the soon coming financial crash and how the Illuminati is connected. Anyway, to better understand the reason for the collapse we will begin a study of what derivatives are through video clips of the classic comedy Trading Places.
Derivatives come in 3 forms: futures, options and swaps. For the sake of brevity I’ll just talk about futures. But it’s important to know that no matter what kind of derivative you’re dealing with, its price correlates with a tangible product that’s usually classified as a commodity. Another way of explaining this is that the price is “derived” from the price of a commodity hence the name “derivative”. Whichever way the commodity price moves, the derivative price will follow. But before we get too complicated, let’s first go down memory lane and watch a video clip to see how the term commodity is defined.
In the next clip we see a complicated process of selling futures contracts with the intent of buying them back at a lower price (the process of selling short). The mechanics behind this isn’t so obvious so I’ll break everything down. But before I do let’s first get into the story. In the beginning of the video we see Mortimer and Randolph Duke giving directions to their floor trader to buy as many orange juice futures contracts as he can. Because they got some false inside information, they believe the Florida orange crop has been ruined by frost, creating high demand which will send the price up. The intent was to take advantage of the FUTURE price rise of orange juice by buying low and automatically obligating the seller to pay big profits when the price skyrockets and settles on a higher price (example of selling long). The Duke’s floor trader’s aggressive buying got everyone else into a buying frenzy which sent the price of orange juice up. This manipulation of the market was intended and was supposed to be strengthened by what the Dukes thought would be a gloomy orange crop report (which later proved to be false). Hope you enjoy the clip but please excuse the profanity.
Eventually you hear Dan Akroyd yell out, “Sell 30 April at 142.” This means he wants to sell 30 contracts (each contract containing loads of oranges) in April at $1.42. The traders perceive that the price of $1.42 is low thinking the end price will be around $2.00. Dan Akroyd knows the price will go way down because of the REAL inside information he has. Sure enough the price slinks down… all the way to 29 cents. Then Akroyd and Murphy decided to start buying the same amount of contracts back in order to “zero out” what they sold without having to wait till April, which is possible due to the mechanism of futures contracts. The difference of $1.13 means a HUGE profit for Akroyd and Murphy… to the tune of hundreds of millions of dollars. In the end the Dukes realize they’ve been duped. They had every reason to believe that the price would go up allowing them to be paid the difference between their original low purchase prices and the upward projected price of around $2.00.
Here we see a somewhat authentic example of how selling short worked in futures contracts 30 years ago before computer trading became the norm. But even with the passage of time the process still isn’t refined enough to avoid the dirty game of using market manipulation and inside information. And surprisingly things have gotten even more shady in recent times with deregulation measures which got us into trouble during the 2008 recession. In that debacle, bankers extended mortgages to unqualified borrowers without being too picky about who got them. Their strategy was to let AIG insurance company insure missed payments. And AIG was fine with this plan because they planned to own the houses if the home owners couldn’t pay. But no one expected the value of the houses to go down which made reselling the houses impossible.
This situation seems messy but it got even messier as the mortgages were bundled and sold as commodities like orange juice, corn, wheat or gold. Investment firms played the part of Dan Akroyd and Eddie Murphy and bet that the homeowners wouldn’t be able to pay their mortgages. In the end they won the bet but AIG couldn’t pay because Congress had passed a law that allowed the insurance company to insure the mortgages without securing them to anything of real value. When AIG couldn’t pay, the government bailed them out by printing money and taking money from Americans in the form of taxes.
Since then we’ve able to avoid total collapse but have been living in an unstable bubble. The scary part of our situation is that we are actually in the eye of the storm. And when the winds sweep over us again things will be much worse. And why do I think this is so? Because banks all over the world still have money in unsecured loans which were turned into futures contracts (derivatives). A conservative estimate of what has been loaned out exceeds 60 trillion dollars and this is money that is impossible for governments to pay back if borrowers go into default.
When our bubble bursts, who will be the ones that will be playing the part of Akroyd and Murphy? The answer is the banking elite which is part of a secretive web called the Illuminati. They are the ones that are behind our future woes and how interesting it is that Aaron Russo, the director of Trading Places, was approached to be part of their group. Let’s listen to what happened in his own words.
Aaron’s explanation of terrorism seems far fetched. Everyone knows that ISIS atrocities are based on religious fervor but there is a group of people that strategically creates sparks in order to start fires. This group knows how to channel the malevolent energy of these extremists for their own selfish ends. As for the Illuminati connection with the 911 tragedy, I just put it on the shelf because I don’t have an all seeing eye to know what this group is really capable of.