Creating Derivatives for "Death", etc.

At last, Wall Street has figured out how to make money on “Death”.  They are planning a new product that will securitize life insurance policies thus tapping into the $26 Trillion life insurance market.  I have personally seen an elderly person taking out a life insurance policy and selling it for a discounted portion of the proceeds that will be paid out at his death.  The beneficiaries pay the premiums on behalf of the elderly, relying on the actuary tables to protect their investment.  Put a bunch of these policies together and create a security called “life settlement bond” you can sell in the market.  What will they think of next?  See:

Solving the Debt Crisis with more Debt?

As of the 1st quarter of 2009, the total net debt versus the U.S. Gross Domestic Product stood at 372%, the highest ever.  This compares to 301.4% in 1933 during the Great Depression.  Back then, we were a manufacturing country but that is no longer the case.  The self interest of elected officials dictates that the electorate feel no pain so that each official can be reelected.  This prevailing attitude of self interest is perpetuated by future promises of wealth.  You can simply track net worth of most past elected officials and see a surprising success of growth in net worth.  Whether it be $5 million book deals or prestigious positions on the Board of Directors of major corporations, it is uncanny how smart public servants become while in office.  Getting elected is all about personal economics it seems and it matters not to what political affiliation you belong.

The current system mentality looks at the “free lunch” method of economics as the preferred path.  Past trade agreements opened the borders to allow corporations to easily exploit other labor pools for a short term flush of profit.  After all, their bonuses depended on attaining profit goals with regard to the long term effects.  Jack Welch of GE fame was well regarded in business circles due to his innovative management strategies and leadership style.  His net worth is estimated at $720 Million.  He moved the company away from manufacturing to financial paper products and GE Credit contributed substantially to his success.  Now GE is suspected by some industry observers of having notable derivative problems.  Only time and disclosure will tell.

China may default on derivatives

China is losing patience with the arrogant behavior of the American view of financial markets.  They are taking steps to prepare themselves for life after the U.S. Dollar. See:

China is now encouraging its citizens to invest in gold and silver

What would happen if you added 1.3 billion potential investors to a particular market?  China understands the economics behind the “Golden Rule”: He who has the gold, rules.  Americans have been duped into investing in paper investments and giving up their hard assets.  This has allowed Wall Street to exploit paper asset value and extract wealth from the individual participants with the help of little or no regulation over their predatory business practices.  China has been burnt by Wall Street but may have the last laugh.  The dollar-centric world may be on its last leg.  If China did read the history books of how the U.S. Dollar became the world’s reserve currency, they would conclude that whoever owns the most gold can force the others to conform to that nation’s economic direction.  As the U.S. is creating a bigger black hole of debt, China is buying up commodities around the world.  With over $2 Trillion in reserves, they can put a floor in the price of most commodities, especially gold.  By the way, gold just surpassed $1,000 for a third time.

China may eliminate exports of certain critical metals including those critical to computer disk drive manufacturing.  Russia and China have the world’s only source of rare earth minerals that are used in building hybrid automobiles. See:

One thing is clear, China is growing in strength and the U.S. is declining.

Rev 16:12 And the sixth angel poured out his vial upon the great river Euphrates; and the water thereof was dried up, that the way of the kings of the east might be prepared.

Are the “kings of the east” China?

Does the river Euphrates mean that the “Fruitfulness” of the West is drying up?  Another meaning of Euphrates is “Sweet Water”.


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