PARABLE OF THE INDIAN FARMER AND CREDIT DERIVATIVES THE PARABLE OF INDIAN FARMERS AND CREDIT DERIVATIVES
(or the destructive force of the credit derivatives)
's been three years since the financial crisis more serious, heavy and long the second world war.
E 'now fairly ascertained its connection with the process of financialization economy that have traveled the world over the last forty years.
E 'was also highlighted its connection with the emergence of economic doctrines
So-called monetarist.
However, until the financial crisis linked to subprime mortgages, no one has highlighted the close link between the financial crisis and its root cause and that the credit derivatives.
We can not avoid the conclusion that if the financial crisis is tied to the housing bubble
USA (of which, however, if they knew the data since 2002), regardless of its credit derivatives, could not cause the effects we are suffering.
To put it clear the financial crisis is bound to double strand of credit derivatives.
And after three years we are witnessing something extraordinary and shocking. (Maybe even a scandal!). Nobody, nobody goes, all over the globe is challenging
Financial instruments that caused the same crisi.Lo Paul Krugman (Nobel prize for economics, 2008), also considered a antimonetarista speaks of in excess' use of leverage, as well as others talk about the need for greater regulation and transparency, but not a word has been spent for their removal.
If one is questioning their danger from the financial point of view, you look at their use and their excesses, but no one questions the destructive power on the real economy or the key assets of the planet: food resources, energy, natural etc. etc. ..
In this regard it is illuminating the "parable of the Indian farmer" in the journalism used to justify the use of credit derivatives and instruments of financial innovation.
Francesco Gavazzi wrote in the Corriere della Sera on September 20, 2008 (five days after the crash of Lehman Brothers and one year after the start of the crisis), "but even more tools to enrich the rich: the financial markets are opportune for a first the poor. Just ask an Indian farmer what it means for him to be able to sell its product on a futures market and thus insure themselves against fluctuations in the price!
And so Federico Fubini writes on "Economy Courier" of October 19, 2009 "A derivative can help a farmer in India Rajastan not be ruined by the drought. If you are concerned to collect less grain because of low rainfall, may sign a contract with a bank in which the two actors exchange risks swap-a-.Nel where rains fall below a certain amount the bank will compensate the 'farmer, however, if the rains showing more than that amount a farmer the bank pays a fee to cover "
The bank or the financial intermediaries which will address our farmer will negotiate the swap with other swaps in the financial markets around the world. The bank or the financial intermediaries will be able to do the swap meet of the Indian farmer with a demand equal but opposite sign, for example an Indian farmer in Mississippi, which, being surplus in its production, it needs a swap in order to stabilize the price of its wheat.
From a financial point of view, perhaps the interests of farmers are safe, but there are some consequences.
The first consequence, of course, is that corn prices will tend to rise as burdened by commissions and thus by insurance, which the contractors must pay to the banks.
The second consequence is that the swap rate, traded, will help to determine the real market price of wheat. (For convenience and to facilitate the understanding of the phenomenon we omit the fact that it will be traded on the OTC markets, that is over the counter, that is, non-regulated markets)
The third consequence is that the problem of drought ; or vice versa flooding will not be solved!
A swap, which is a derivative of the claim, a simple and solitary swap may intervene in the climate of the planet and the food chain.
The founding philosophy of the mechanism is that the problem of drought the farmer about his side only any financial losses, but certainly not on the side of grain production. This parable illustrates the use of swaps on the production of food resources, but
swaps largely determine the prices of inputs and manufactured goods.
We got to as a derivative, but there are other of dangerous-especially the securitization-which will be discussed shortly, but we want to return to talk about the extraordinary step of myopia that we are experiencing.
The extraordinary fact is that three years after the financial crisis, the only real action taken by states and governments, has been an unprecedented injection of liquidity into the system.
Everything has an explanation.
For forty years the so-called monetarist economic doctrines are monopolizing the knowledge economy: they are il riferimento teorico e pratico dei governi, delle accademie, dei consigli di amministrazione delle società, delle banche, delle società finanziarie e financo dei giornali.
In pratica chi dovrebbe decidere come si esce dalla crisi , ha a disposizione solo consiglieri e professionalità cresciute e formatisi all’ interno delle dottrine del monetarismo.
Tutto ciò costituisce un ostacolo enorme al superamento della crisi in atto.
Giorgio bellucci
next treaty of criticism of securitization and swaps.
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Here is a pastry with pistachio and chocolate banana smoothies ... 
