For some months, I have been writing my thoughts on what has been happening around the world both politically and economically. Surely the motto for the past year must be, “If anything can go wrong, it will.”

The day before Thanksgiving, on November 26th, I warned FallenRepublic’s readers about the dangers of Credit Default Swaps. This, unfortunately, seems only to be the tip of the iceberg. There are many more items out there, with financial dollar amounts making the CDS catastrophe seem small as a mouse in a warehouse. For those who have not read my previous commentary on the dangerous nature of Credit Default Swaps, here is a most useful video explaining the problem and quantifying the CDS portion thereof.

Now, this is not the only problem. As I stated before, CDS were only the tip of the iceberg, tipping in at a whopping $50-60 trillion dollars. You normally would not look at $60,000,000,000,000.00 and find it to be a trivial figure, however; you have not yet seen how large the problem actually is. In the following article, I wish to describe the issues directly facing us financially which do explain Washington, D.C.’s haste to prevent bank failures.

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Tags: bailout, Bank failure, Credit Default Swap, Derivatives, Ecuador, emerging economy