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Old 09-09-2009, 12:45 PM   #1 (permalink)
 
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China and Derivatives... The ticking time bomb! Is this true?


I received this in an add promoting trading software ... Just at of & quot ; sky is falling curiosity & quot ; does any of this resemble a possibility ? What if China did default on derivatives owed to US banks ? Could the US then default on Debt ? Would all contracts mean nothing ? Would cats and dogs begin long and meaningful relationships ?






China is preparing to default on Trillions of dollars worth of derivatives sold to them by U . S . banks .

China considers the sale of these derivatives to be financial fraud and , therefore , an & quot ; act of war .& quot ;

No matter who ' s right or wrong , China ' s default will have massive implications here in the U . S . if and when it comes to pass .

Let me use numbers to paint a picture for you :

Fact # 1 : Global GDP is around $ 60 . 1 Trillion .

Fact # 2 : The globe ' s total financial assets were around $ 167 Trillion as of the year 2006 -- probably a bit less today .

Fact # 3 : As of late 2008 , the derivatives market totaled $ 531 Trillion -- more than 3x total financial assets worldwide .

Now you know why they say the derivatives market is a & quot ; ticking time bomb .& quot ; When it blows , it ' s gonna blow big .

And if China defaults on the Trillions of derivatives they hold , it ' s bound to set off a chain reaction that will wreak havoc on Wall Street and around the entire world .

Because if China defaults , you can be sure other countries won ' t be far behind .

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Old 09-09-2009, 01:13 PM   #2 (permalink)
 
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This is interesting stuff . It ' s difficult to imagine such dimensions .
Does somebody have insights about these markets ? Please share it with us !
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Old 09-09-2009, 01:18 PM   #3 (permalink)
 
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Whats Derivatives ?

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Old 09-10-2009, 09:28 PM   #4 (permalink)
 
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China is preparing to default on Trillions of dollars worth of derivatives sold to them by U.S. banks.

What are you saying , China plans on not paying their bills ??

Can they do that ? I suppose they can , who could stop them ?

Dan.
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Old 09-10-2009, 11:56 PM   #5 (permalink)
 
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I found this blog post related to the subject . This sounds nuts .

The blog ' s address : FT Alphaville Blog Archive China’s derivative threat causes a stir

- Sarge
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Old 09-11-2009, 11:05 PM   #6 (permalink)
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1000,000,000,000


Thanks for the link Sarge .

Does anyone know how much a trillion yuan is in dollar terms .
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Old 09-12-2009, 11:02 AM   #7 (permalink)
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Hi G

1 Chinese yuan = 0 . 146456 U . S . dollars

Therefore , 1 Trillion yuan = 146 Billion USD .

Cheers
Tek
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Old 09-12-2009, 01:31 PM   #8 (permalink)
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No Small Change


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1 Trillion yuan = 146 Billion USD .
Thanks Tek

146 , 000 , 000 , 000 USD is no small change .

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Old 09-12-2009, 05:11 PM   #9 (permalink)
 
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The US - China Ponzi Scheme

( here ' s the article )

http://articles.moneycentral.msn.com...-ours-too.aspx

( here ' s a quote from the article )

& quot ; Of course , it is not really in China ' s interest to stop the scheme , even if it wanted to , because its own economy would likewise blow up . Satyajit Das , a credit derivatives expert in Australia , likens this to stepping on one of those land mines that are activated by the weight of a victim ' s body . As soon as the weight is lifted , the mine explodes , and the person ' s leg is blown off .& quot ;
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Old 09-12-2009, 05:13 PM   #10 (permalink)
 
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Quote:
Originally Posted by TrippleZero View Post
The US - China Ponzi Scheme

( here ' s the article )

http://articles.moneycentral.msn.com...-ours-too.aspx

( here ' s a quote from the article )

"Of course, it is not really in China's interest to stop the scheme, even if it wanted to, because its own economy would likewise blow up. Satyajit Das, a credit derivatives expert in Australia, likens this to stepping on one of those land mines that are activated by the weight of a victim's body. As soon as the weight is lifted, the mine explodes, and the person's leg is blown off."
http://www.reuters.com/article/ousiv...5801UT20090901

The US-China Ponzi scheme - MSN Money
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