Dr. Martin Hash Podcast

Capitalism is the abstract idea that special people can imagine money exists, then loan it to ordinary people who work for a living to get some of that imaginary money. The concept sounds exploitative, and it is, but it works because it harnesses the inestimable ambition, avarice and greed of the human species. Because the exploitation can quickly overwhelm the delicate balance of Capitalism, regulated banking was created by government, but still over half of all money-lending is unregulated, called “shadow banking.”

To put the size of shadow banking in perspective, consider that the 50 richest people in the world combined have about $2 trillion dollars. There's $7 trillion in gold around the world, and about the same in amount in paper money. Globally, Stock Markets total $73 trillion. Finally, all the Real Estate in the world is worth $217 trillion. Compare those numbers to the total debt around the world of $215 trillion and it all kind of makes sense, except the near equivalence is completely dwarfed by $544 trillion of derivatives lurking in the realm of shadow banking. Shadow banking caused the near financial meltdown in 2008, and it will probably instigate the next financial crash.