But it's important you understand what they are and what their implications are for the economy, monetary policy and their impact on Silver and Gold.
Facilitating liquidity and mitigating credit risk is what derivatives are all about.
The notional outstanding of OTC derivatives markets has risen to the point where they totaled approximately US$601 trillion at December 31, 2010.
If something were to occur where payouts had to be made on only a small portion of this US$601 trillion total, the outcome could be catastrophic.
Enter the rapidly evolving sovereign debt situation in Europe. Suddenly Buffet's famous derivatives statement is brought into sharp focus.
- "German Finance Minister Wolfgang Schäuble, who is reportedly doubtful that the country can be saved from bankruptcy, is preparing for the possibility of Greek insolvency. Officials in his ministry are currently reviewing scenarios for handling such a situation, exploring what it might mean for the rest of the euro zone."
The focus will be preventing these 'time bombs' from destroying the entire economic system.
Can you say: "Ramp the paper money Printing Presses up even higher?"
Sure you can.
It is inevitable.
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