multi-trillion plan to save the eurozone , page-25

jburc,

I don't think you understand what a derivative contract is!

They are simply agreements between two parties to buy and sell a commodity for settlement at a date in the future. Mostly they are used to replicate the price movements of the underlying commodity, but are never physically settled. When they are physically settled, an actual commodity changes hands from a seller to a buyer.

You cannot use a derivative to create the commodity where non already exists!

It has nothing to do with "fiat money".

There maybe 600 trillion derivatives outstanding. That means there a 600 tillion buyers and 600 trillion sellers. Very often they are the same people holding netted or offsetting positions.

If you are determined to worry about derivatives, worry about the consentrated holding of individualy companies. Or worry about the accuracy of the valuations on OTC (Over The Counter)derivatives. That is where the trouble usually starts.