November 23rd, 2010 by Alex

As if the surface banking system (shown at the very top of this chart) isn’t insane enough, this chart reveals the absolute insanity of the deeper parts of the banking system: the shadow banking system. This just goes to show that absolutely no one can really comprehend the complexity of the current monetary system.

Excerpt from the Financial Times article that exposed this chart:

“These flows are so extraordinarily complex that hundreds of boxes create a diagram comparable to the circuit board of a high-tech gadget. Even as poster size, it is difficult to decode…

…The Fed now estimates that in early 2008 shadow banking was $20 trillion in size, dwarfing the $11 trillion traditional banking system. And though this shadow system has now shrunk to a ‘mere’ $16 trillion, this remains bigger than traditional banking, at some $13 trillion. Little wonder, then, that so few people immediately appreciated the significance of the seizing up of shadow banking in 2007.”

November 21st, 2010 by Alex

This is a great presentation. It was made by Damon Vrabel and is called Renaissance 2.0. It really puts the whole system into perspective and uses a lot of simple yet very informative graphics. I think it runs about an hour and a half. I highly recommend it. Watch it multiple times. (The second to last segment is my favorite, 6.2.)

November 21st, 2008 by Alex

Also check out this simple video.