Ignore the drama headline and just read the facts:

The notional value of derivatives held by U.S. commercial banks increased $8.5 trillion in the fourth quarter, or 4.2 percent, to $212.8 trillion.

Derivatives activity in the U.S. banking system continues to be dominated by a small group of large financial institutions. Five large commercial banks represent 97 percent of the total banking industry notional amounts and 88 percent of industry net current credit exposure.

The precious metals (silver) derivatives of all maturities increased by 37 percent, from $9.29 billion to $12.8 billion. This came principally from increases in the less-than-one-year maturities where the JPM holdings increased 34 percent to $6.76 billion and HSBC holdings increased 58 percent to $4.7 billion. (Despite the radically different percentage increases, interestingly the increases at JPM and HSBC were identical in dollar amounts at $1.7 billion.)

Why is this important to you? Do you remember the 2008 near collapse of the financial system? It was caused by derivatives. The 5 investment banks that comprise 97% of the new derivatives being created are NOT making it less likely we will suffer another massive heart attack in the financial system, they are increasing exposure by an amazing $8.5 TRILLION DOLLARS A QUARTER.

http://www.occ.treas.gov/ftp/release/2010-33a.pdf

Got gold yet??

This entry was posted on Saturday, May 8th, 2010 at 12:36 pm and is filed under Archived. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.