Читать книгу Building Wealth with Silver - Thomas Herold - Страница 10

Derivatives - Financial Instruments of Mass Destructions

Оглавление

Modern investment vehicles are complex and designed to work quickly. Some are much riskier than others. Many are not well understood by those who are in positions of countering challenges to the economy. Many, through no inherent fault of their own, play to people's greed and disregard. All this can be wrapped up in one word: derivatives.

A derivative, if you are not familiar with this term, is simply anything that derives from a service or product. So orange juice would be a derivative of oranges and a mortgage is a derivative of a house. In the world of finance, swaps, futures and options are all types of derivatives. By its definition, a financial derivative is based on the value of some expected future price.

The dollar amount of the various financial derivatives that are floating around most likely exceeds $100 trillion dollars, which is equal to a one with fourteen zeros after it: 100,000,000,000,000. To give you a better idea of this number lets compare it with some other things.

•There are probably 150 Billion galaxies in the universe,

•About 200 Billion stars in the Milky Way and

•100 Trillion is the estimated number of cells in the entire human body

One way to better understand large numbers such as these is to compare the heights of stacks of varying numbers of dollar bills.

The thickness of a single one dollar bills measures .0043 inches or .0000000679 miles.

The height of a stack of 100,000,000 (one hundred million) one dollar bills measures 35,851 feet or 6.79 miles. This would reach from the earth’s surface to the approximate altitude at which commercial jetliners fly.

The height of a stack of 100,000,000,000 (one hundred billion) one dollar bills measures 6,786.6 miles. A column of bills this high would extend 28 times higher than the orbiting International Space Station.

The height of a stack of 1,000,000,000,000 (one trillion) one dollar bills measures 67,866 miles. This would reach more than one fourth the way from the earth to the moon.

The height of a stack of 100,000,000,000,000 (one hundred trillion) one dollar bills measures 6,786,616 miles. This would reach from the earth to the moon – and back – 14 times.

Building Wealth with Silver

Подняться наверх