Toxic Debts accelerate according to IMF

Toxic debts racked up by banks and insurers could spiral to $4trn, new forecasts from the International Monetary Fund (IMF) are set to suggest. The IMF said in January that it expected the deterioration in US-originated assets to reach $2.2trn by the end of next year, but it is understood to be looking at raising that to $3.1trn in its next assessment of the global economy. In addition, it is likely to boost that total by $900bn for toxic assets originated in Europe and Asia, reports the Times.

Richard Hoblyn says; It would appear that uncovering these losses hidden off-balance sheet is going to be a long drawn out process. My take is that taxpayers, primarily US & UK, are being palmed off with toxic debts as the banks trade out their synthetic derivative positions. The effective black holes that investment and commercial banks may indeed have may be much larger than at first thought. My own calculations based on assumed global derivative risk ($600 trillion) gave me a UK figure alone of £17 trillion compounded to 2025. I think the next stages of the crisis are about to occur; it's interesting to note that IMF received $1 trillion of packages from G20 last week and at the same time indicated a massive sell-off of bullion reserves depressing Gold in the short-term. The picture is indeed gloomy!