BIS Warns Of 2023 Black Swan – A Derivatives Time Bomb

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Cameron Long

  • George Gammon says:

    Check out my private, online investment community (Rebel Capitalist Pro) with Chris MacIntosh, Lyn Alden and many more for $1!! click here

    • after369369 says:

      Your…halting…way…of speaking…is hard…to…listen…to.. even…at 2x

    • vlnd fee says:

      It is like FTX,
      but with dollars and euro’s.

    • AnswersFromGod dot Com says:

      First, if this did happen, how does it impact a “typical” person? Second, I believe that there is some type of fraudulent system established to deal with this, since some European (Swiss, I believe) banks just faced this issue, and the Fed essentially bailed them out (apparently printed a bunch of dollars to enable them to cover their dollar needs).

    • Andrew Cameron says:

      Could I buy a credit default swap for this?

  • J A says:

    I would love to see that whole thing collapse. It’s the reset that needs to happen. Then every politician and company executive responsible for causing this should be in prison for life.

    • Chris Callahan says:

      The people at the top will escape as usual.

    • Adrian says:

      Prison? You mean locked in the compound that has no power or resources coming to it? If they collapse it all, there won’t be anything to keep up even a prison-level lifestyle for them. 🤣

    • Darcy says:

      That kind of collapse will hurt the middle and lower class the most. Think Russia in the 80’s.. if there was a line at a grocery you waited. You bought whatever they were selling that day.

    • Nick Arrigo says:

      you don’t want to live in a world where that scenario plays out. mad max type stuff

  • hi says:

    I’d love to see the federal reserves off balance sheet.

  • DivvyDiesel says:

    IMO this is why the central banks are rushing there plans for a CBDC to be in place before this debt bomb blows the whole fractional reserve banking financial system to hell

  • Jim Crawford says:

    Derivatives… the gift that keeps on giving

  • Nathan Rathbun says:

    If you do it, it is called fraud. If a bank does it, it is called business.

  • Baxter says:

    Off-shore companies used to print eurodollars as needed. If the BIS can’t even identify country-of-origin, they are most likely operating in tax havens and there is only one reason for that. Big companies don’t go under the radar in these numbers. I suggest reading Jared Bibler’s book. Banks create off-shore shell companies to print eurodollars and use as needed.

  • G Van Arsdale says:

    This might be how the digital dollar and other digital currencies will be introduced. They will blame the old style of fiat money for the disaster and scare everyone into accepting a new model.

  • Sandi Kennelly says:

    Nothing was done about Derivatives at the time of the 2007-2008 financial crisis. Until they are addressed we will be dealing with a ticking time bomb.

  • eric dehart says:

    Hell of a video George, what amazes me is that the SEC allows the corps to hide fx swaps (loans) in footnote disclosures

    • Doug InOrlando says:

      I was wondering how anyone knew how much was off balance (they read the footnotes)

    • Be Useful says:

      Handouts to stay quiet

    • Nathan Isenhour says:

      That’s because their the same owners..In all of it.. Corned system.

    • ProfiSkip International says:

      Formally it’s not hiding. It’s legal. I suppose the original idea was, that just exchanging the same value from one currency into another currency. But de factory it’s a switch from an asset holder to a lender and debtor. And if the exchange rate developes negatively at the date of payback, it’s in the books as loss. Scratching my head and wondering how tax consultants and accountants deal with this under legal terms ???

  • Julian Wright says:

    Right after the housing crash, I said the next crash is going to have some crazy toxic derivatives that we have no idea exist and it will be much bigger than the CDS and MBS size. As many quants and mathematicians as there have been in finance for the sole purpose of creating complex financial instruments, and the fees associated with selling such instruments. it’s bound to happen.

  • Southern Fried Kiwi says:

    This is how they will force through digital currencies. They will use the failing of the banking system and subsequent bail ins(with our money) to justify the “safer” digital option. The plan is in place and being executed.

    • M Th says:


      i do believe they will “beta” test it out in New Zealand, Australia, Canada, UK first before its done in the US.

  • xorinz says:

    I’m a simple man and its mind blowing for me to learn that this type of transactions are off the books and not mandatory.
    We live our lives like simple people, working, earning, having fun, spending money with a kind of security in the back of our minds that police will protect us, the bankers have our best interest when we go and apply for a loan, that doctors will make us well when we get sick, that politicians vote the best laws in the interest of the comunity and so on and so forth. But day by day i learn that everything is a false sense of security, that most of these people have no idea of what they are doing and the best thing is to trust nobody. Its a jungle.

    • Sal Balakrishnan says:

      You’re anything but a simple man; a critical free thinker. Right on all counts.

    • Hammett175 says:

      Well said, friend, but it’s worse than that even. They *do* know what they’re doing and what they have in mind for us is out of a science fiction horror movie. They’ve been working on it for a long time and that was the lulling before the culling. There are some fates worse than death, and living in and under their new “system” is one of them.

    • Boris Vukcevic says:

      Sadly, that’s how it always was all throughout history. With each and every system that came along there was always those people who are enriching themselves at the expense of everyone else in society. There are some really messed up and greedy people in our society.

  • Boyd The Goofball says:

    In the summer of 2008 the US Government changed the “Mark to Market” rules for banks so that anything that a bank owned that was not liquid, like houses, they had to enter on the balance sheet at $0.00. The the GFC happened and the US stock market took a long dive. Around February 2009 the US Government reversed the changing of that “Mark to Market” rule. And the following day the US stock market started its climb back upwards from its position in the 6,000 points range.

  • Hugh E says:

    So these are over the counter derivatives (insurance policies) written by two private parties. I’m not sure how they’re valued in dollars but swapped in two other currencies – what would concern me would be the respective valuation of the other currencies against the dollar as the derivatives approach maturity.

    My question is who are the parties to these agreements? Which banks are the ‘non-us’ banks and what is their state of solvency as well as what is the effect of their insolvency on the other parties to the swaps?

    I wonder – isn’t the BIS report just pointing out the fact that someone may not realize the value of the swap (unregulated OTC) if the other party fails? Then it’s simply not a transfer of money that’s not on the balance sheets anyway. Or, in other words, a bunch of investors not getting the christmas bonus (so to speak) that they were expecting?

    Secondly, what does the Fed Reserve care about these instruments? They’re foreign, OTC and involve non-us banks. So ?? The effect on the US economy will be the ultimate effect of some non-us banks failure on some foreign economy. ??

    Derivatives are nothing more than insurance policies of one form or another. It appears the BIM report is speaking about swaps on currency fluctuations. OTC swaps. Both parties were well aware of the uncertain nature of the world economy since 2016, both parties were aware of their downside risk. Who says Firm A is a US bank/company? That seems improbable as the value of the swaps are in foreign currencies (euro vs yuan, say).

    Derivatives dont go on balance sheets because, in effect, they dont exist until they’re exercised. They’re agreements on fiscal behaviour based upon the future value of something (in this case it appears to be monetary exchange rates in concert with interest rates). They enter balance sheets when they’re exercised and become real payments from one company/bank to another. What the BIS report is saying is that these derivatives are unregulated and OTC and COULD result in big losses to one party or another. We dont know yet. That they’re posed to mature in 2023 indicates that they dont have put or call options of one sort or another. What has the BIS sweating is that, being unregulated, no one other than the companies in agreement to the derivatives actually know how the derivatives are written. I’m surprised that the BIS actually knows the value of the derivatives (100T).

    I think your extension of the end effect of the unregulated private derivative market (that the BIM is speaking of) to the overall regulated economy is a stretch (GFR x 1000). This is exactly why our banks go thru the Feds recurring stress tests and why our banks are required to have cash reserves.

    In the end, the risk will be averted, if by nothing else than the two parties (figuratively speaking) exercising new derivatives to replace the old derivatives before they expire (the can will be kicked down the road).

    • Pappa Flammy Boi says:

      Yeah, I was curious about that too. How would the BIS even know how to even approximate the total valuation of these derivatives, assuming they’re OTC and private transactions?

      I imagine if all the derivatives were biased in one direction, and all of them failed the exact same way, then there might be some unruly side effect to the parties that end up in default (assuming that’s what would happen), and by extension, the country which that currency is denominated in.

      It has to be a domino effect to be dangerous, and additionally, it would have to cause a default or significant financial loss, otherwise it all comes out in the wash in the end.

  • Asish Reddy says:

    You have such a talent for explaining complex concepts very simply and elegantly. Loved your explanation, first time viewer and I’m instantly grateful I got this video recommended. Thank you !

  • Jenya Takeuchi says:

    This was so clear, thank you for breaking it all down for us.

  • David Newbury says:

    Is it bad that I’m becoming numb to headlines like this? This is all really important information to understand, but at this point I don’t have any room for the existential stress these headlines induce. I guess that’s not a bad thing haha. Thanks for sharing, It’s always good to stay informed but I think separating emotion from news like this is vital in economic times like these.

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  • mattresslessness says:

    The Financial Times had an explanation on this one from the time of the report’s release, based on the idea that BIS wants these forwards recorded as a debt, but global accounting standards dictate differently:

    “Because it’s a forward rather than a derivative, there is an obligation, but it’s not much of a risk; if the counterparty doesn’t deliver their domestic currency, then you don’t deliver your forex, and your exposure to loss is determined by how much it costs you to get your books squared up again.

    The gross settlement obligation only becomes a significant factor in an odd and bizarre situation, when for some reason one of the parties has delivered their side of the bargain, but then the other party doesn’t.”

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