The value of the U.S. stock market has reached $49 trillion, a speculative bubble level unimaginable three years ago. The City of London and Wall Street have built this bubble using the largest pile of leverage in history, consisting of margin loans, and a new synthetic instrument called “total return swaps.”
Simultaneously, by Jan. 1 of this year, the total United States outstanding debt—combined household, business, and government (on all levels) debt—soared to $78.7 trillion. The U.S. debt and stock market bubble alone totals $127.7 trillion.
Moreover, the value of American banks’ derivatives holdings—the derivatives notional amounts—reached $197.5 trillion by the end of the first quarter of 2020.
At most, one-twentieth of this mass of paper is connected to the U.S. economy’s real physical productive processes, which advance the population through scientific-technological progress and the improvement of the labor force’s cognitive powers.
The current state is wholly unsustainable.
