Money is created by way of policy involving interest rate manipulation etc. by the FED. Lower interest rates allows more borrowing and allows the Gub'ment to issue more debt than the could at a higher rate. It]s all connected my friend and the FED is at the heart of it.
"You said they were based on nothing."
Yes, exactly. Pepsico makes physical things. Most companies do and when you buy stock in them you can measure their worth in physical output. Derivatives are not, they are mathematical concepts, they are vapor much like our dollar. You can create them out of thin air by moving numbers around.
"They are based on real things. Real commodities, real interest rates, real stocks, real bonds."
No they are not. They are math formulas using other things like interest rates. (BTW calling an interest rate a real thing is funny. Do me a favor find me a physical interest rate. Not numbers on a page of text etc. a physical from not a representation)
And no I do not trade in derivatives. I don't invest in things that can't be described in a simple single sentence. It's why I didn't jump on the ENRON bandwagon even though all the brokers I dealt with at the time said it was a sure fire bet. Many of those same guys are telling me derivatives are the way to go right now.
No they are not.
Sure they are. I can buy (or sell) a derivative based on wheat, beef, oil, US Treasury rates, the S&P 500 and many more.
They are math formulas using other things like interest rates.
And wheat, beef, oil, etc.
BTW calling an interest rate a real thing is funny. Do me a favor find me a physical interest rate.
Interest rates aren't real? Are they imaginary? That's funny.
And no I do not trade in derivatives. I don't invest in things that can't be described in a simple single sentence.
I can find you plenty of derivatives that can be described in a sentence or two.
Many of those same guys are telling me derivatives are the way to go right now.
Really? What are they telling you to trade?
I agree with you, you definitely shouldn't trade derivatives.