by Joseph P. Farrell, Giza Death Star:
If you’ve been following the research of Catherine Austin Fitts or Dr. Mark Skidmore of Michigan State University in the past few years, you’ll know that there’s incontrovertible evidence of a lot of missing money, particularly in the American federal “budget”. But W.G. spotted this story about the Bank of International Swag Settlements (BIS) finally noticing the same thing:
‘Huge, Missing and Growing:’ $65 Trillion in Dollar Debt Sparks Concern
There’s something here that caught my eye however, and I hope I’m 100% wrong about what it might indicate, but – banksters being banksters, particularly at the Bank of International Swag Settlements – I fear I’m not.
TRUTH LIVES on at https://sgtreport.tv/
In any case, here’s the story:
There’s a hidden risk to the global financial system embedded in the $65 trillion of dollar debt being held by non-US institutions via currency derivatives, according to the Bank for International Settlements.
In a paper with the title “huge, missing and growing,” the BIS said a lack of information is making it harder for policy makers to anticipate the next financial crisis. In particular, they raised concern with the fact that the debt is going unrecorded on balance sheets because of accounting conventions on how to track derivative positions.
The findings, based on data from a survey of global currency markets earlier this year, offer a rare insight into the scale of hidden leverage. Foreign-exchange swaps were a flashpoint during the global financial crisis of 2008 and pandemic of 2020, when dollar funding stress forced central banks to step in to help struggling borrowers.
To be sure, the debt is backed by an equivalent amount of hard currency. To understand how the system works, consider a Dutch pension fund buying assets in the US. As part of the transaction, it will often use a foreign-currency swap to exchange euros for dollars. Then, when it’s closed out, the fund will repay dollars and receives euros. For the length of the trade, the payment obligation is recorded off-balance sheet, which the BIS calls a “blind spot” in the financial system.
It’s that opacity that puts policymakers at a disadvantage, according to BIS researchers Claudio Borio, Robert McCauley and Patrick McGuire.
Now if the arrangement outlined sounds a bit familiar, it should, because it’s one and the same arrangement that lies at the heart of the FTX scandal and the shenanigans of Mr. Bankkman-Fraud Bankman-Fried, just substitute, say, “Bitcoin” (or other crypto “currency” of your preference) for “euros” and you’ll get the picture. The rest of the article continues in much the same vein.
But wait a minute… the opening paragraph is talking about derivatives, not swaps, which are not exactly the same thing. After opening the article with one sentence about derivatives, we’re suddenly, and for the next few paragraphs, talking about nothing but swaps. Indeed, I’ve written often on this site, and in a couple of my books, that there is somewhere between 14 and 17 quadrillions of dollars of derivatives sloshing around in the system, based on the credit default swaps of the late 1990s. Basically, derivatives are securities issued on a swap, using the swap as the collateral to back the derivative, which derivative can then be bundled into a further tranche of securities, and then we have derivatives of derivates, and so on. And here you thought bookkeeping was only about addition and subtraction, when in fact, it’s about calculus, first, second, and nth order derivatives and massive noodle-baking range sums. The signs at the personnel office used to read “Wanted: bookkeeper with financial accounting experience, apply within” now read “Wanted, PhD. in Higher Mathematics specializing in Lie algebras, graph theory, partial differential equations, tensor calculus, and linear algebra. Experience in higher order topologies also helpful.”
In short, the financial system is a complicated “incomprehensible” mess. There’s so much bad paper sloshing around in it, so many disparate accounting procedures, that even the Bank of International Swag Settlements does not know what is going on, and notably, it cannot appeal to digital currency as a solution to the problem, thank you Mr. Bankman-Fraud Bankman-Fried.
Which returns us to that strange opening sentence, and its mention of currency derivatives. Have we just been told, in the usual round-about en passant way that the “elite” has, that there is also something in the system called “currency derivatives”, sloshing around at the same time as credit default swaps, weather derivatives, planscamdemic bonds, and so on? Have we, in other words, behind this rather generalized term, just been informed that there is yet a another different kind of financial instrument floating around on the float of the swap?
If so, did the BIS just in a round-about way acknowledge something I have suspected for a long time, namely, that there’s an entirely hidden financial system, and that the BIS isn’t in on all of its workings?
