Derivatives are the Achilles heel…
We’ve been seeing a slow steady shift away from the dollar for the past decade. China has been utilizing its own currency in bilateral trade for some time. China has increased the size of its Asian trading markets so they are now less reliant on trade with the United States.
The derivatives markets are the Achilles heel of the system. An example is the paper ‘gold’ derivatives versus the actual physical markets. They rely on investors leaving their ‘metal’ on the exchanges. Their worst nightmare would be for numerous funds and investors to demand delivery.
He discusses what happens when general investors start moving into the miners and the outsized returns one can expect.