In my layman’s opinion, there is NOTHING that will do as much damage to the world economy as derivatives. We have turned the world banking system into a casino for banks where the banks take the profit and the citizens eat the losses. Sounds familiar, right?
It is the same scheme. The only difference is the staggering amounts of money involved and how these instruments tie the system together. If the housing collapse set off a big bomb in the world banking system the derivatives will be a full scale nuclear war followed by nuclear winter. The numbers are that big.
If you think the folks on this thread sound nutty and outlandishly paranoid you have not studied derivatives. I urge you to take an hour to gain an understanding of the threat we face. The numbers dwarf the entire U.S. economy and the world economy. There is no possibility that the world could cover the losses or that the major banks would stay solvent.
I am sure others will correct me and it’s simplistic but think about derivatives as the mortgage backed securities that became worthless when the housing market imploded. However, the numbers we are talking about for the total derivatives market are 100 times greater than real estate instruments. It is all digital money, right?
Fire or flame away and by all means add your own .02.
I don't get this. The world is a closed system.