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Ellen Brown, author of the quite readable Web of Debt: The Shocking Truth About Our Money System -- The Sleight of Hand That Has Trapped Us in Debt and How We Can Break Free, has a number of more recent articles on her web site webofdebt.com. This one does a good job of explaining what derivatives are and how they endanger our financial system.

Great summary and detail. The Bank of International Settlements (BIS estb. 1930) has monitored central banking worldwide, and, recently, the VOLUNTARY reporting of hedge funds (which are completely unregulated). The ‘housing’ bubble which has served as the trigger for credit derivative exposure and potential default is by itself, small, but its repercussions are huge. The biggest bubble is the one Brown equates to Chernobyl, appropriately. During 2007 the bubble was being reported as about $470 trillion, growing 45% to the $681 trillion quoted by the end of 2007!! Now, just over a quarter later, a figure above $700 trillion is mentioned by many sources. A 5% failure rate of the $700 trillion (a modest assumption given some sources think 40% of hedge funds will fail in the near future) is about $35 trillion...there are zero takers for this debt. WIth credit contraction the short term (less than one year) rollovers are dependent on extremely low interest loans from Japan...’the carry trade’, which can be easily moderated by China, which, with huge US Forex reserves, can drive the yen up and reduce the carry trade and thus
‘expose’ derivative credit rollovers at will. The Fed Reserve is not ‘Federal’...it has essentially ‘no reserve’. Its got a few hundred million according to several sources, enough to bail out one more Bear Stearns event...and that is it. Browns piece here echoes many other similar pieces that are coming out whole, as hers, and in many pieces by others. Exciting time for financial writers and a nervous world with everything at stake.

Aaron Russo created a documentary that is posted on youtube. It is called “From Freedom to Fascism.” It is a good overview of the Federal Reserve and its interplay with the IRS (created to support the Federal Reserve). While not 100% accurate, the movie actually makes the subject understandable to the average person who has no clue as to the meaning of “multiplier” in banking terms.

There's so much nonsense in this article it's hard to know where to begin:

a) fractional resrve banking originated with the Italian banking families in the Middle Ages, and lending more than you have in reserves at the moment is no different than making an investment where you judge the probability of the downside to be remote, but where you know the downside will bankrupt you if it occurs. It is not printing money.

b)The Federal Reserve Act, rather than being the privatization of soveriegn power, in fact placed the big New York banks under effective Federal monitoring and regulation for the first time.

c) many CDS transactions are guaranteed by the clearing firms that actually 'own' the financial instrument for someone else. If that instrument goes bad, the clearing firm demands payment from the buyer. If the buyer can't pay, the clearing firm is usually on the hook.

Some of the commenters here seem to think we should return to a barter economy, for God's sake.