I think there is a lot of leveraged buying with derivatives and they are dangerous, just like paper gold shares. If everyone redeemed their paper gold shares tomorrow about 10% would ever get any real gold in their hands the rest would be holding empty sacks just like an old fashioned run on the banks. It's all a big ponzi scheme.
I don't think any derivatives dealers are sitting around with 700 trillion in their vaults.
All the protections were removed when Glass-Steagall was repealed by Clintons Financial Modernization Act. Only people taking physical delivery could buy commodities. No printing fake gold, oil, corn shares out of thin air and Banks were prohibited from purchasing anything on Wall Street. All those safeguards were made law after the Great Depression caused by Wall Street.
I think there is a lot of leveraged buying with derivatives and they are dangerous, just like paper gold shares. If everyone redeemed their paper gold shares tomorrow about 10% would ever get any real gold in their hands the rest would be holding empty sacks just like an old fashioned run on the banks. It's all a big ponzi scheme. I don't think any derivatives dealers are sitting around with 700 trillion in their vaults. All the protections were removed when Glass-Steagall was repealed by Clintons Financial Modernization Act. Only people taking physical delivery could buy commodities. No printing fake gold, oil, corn shares out of thin air and Banks were prohibited from purchasing anything on Wall Street. All those safeguards were made law after the Great Depression caused by Wall Street.