Outstanding Derivatives: 1.28 QUADRILLION-95% on MARGIN!

In an inflationary economy, big numbers quickly lose the shock factor.

Over the course of just a few years, a single banana becomes 10 times more expensive than what a four-bedroom home used to cost. A simple two-ply square of toilet paper sells for $417, while a full roll is priced at more than $140,000. And don’t even torture yourself by guessing how much a gallon of gas can go for under these conditions. The numbers get so big, not only do people stop trying to understand them, they begin to ignore them.

So it is alarming that the latest report from the Bank of International Settlements (bis) went largely unnoticed.

According to the bis, the number of outstanding derivative contracts in the global marketplace soared by double-digit percentages last year. Anything going up by double digits should elicit interest in and of itself, but in this case it is the sheer magnitude of the numbers involved that raises red flags.

The bis reported the total amount of outstanding derivatives has reached a practically incomprehensible $1.28 quadrillion. Yes, you read that correctly—quadrillion! And as astounding as this astronomically huge number is, the actual totals are even bigger because this number does not include derivatives related to the commodity markets (which the bis says it can’t track because values aren’t available).

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