A derivative is simply a bet on how an economic indicator or some other event will go. If the event goes your way, you win. On the other hand, such as in an economic recession, a war or some other institution’s collapse, if a bunch of your bets go the other way, you lose, your lenders lose, and the trickle-down effect can, on a large enough scale of bets, cause the collapse of an entire economy.
Current exposure to derivatives across the world, last time I read, was as high as 1.4 quadrillion dollars.
Yeah, last number I heard on derivatives was way north of 600 trillion dollars but that was a long time ago.
I’m sure the current number makes the unfunded liabilities (U.S.) look like peanuts. I can believe your number. Wouldn’t surprise.[
And our unfunded liabilities dwarf the national debt - last I was, $126+ trillion or so verses 23+ trillion.
Have to jump on the debt clock again and see what are the latest numbers they are reporting.
Ah, here it is.