Financial Froth
In the past 20 years, global trading has included collateralized debt obligations, credit default swaps, and instruments more intricate than simple debt swaps and currency hedges. Trillions of dollars in trading swell far higher than any underlying asset values on which they are supposedly based.
Many of these derivative instruments are based only on the promise that somebody, somewhere will pay a future stream of income. And if that risk goes outside the bounds of the models assumed in devising and trading these things, you get system lock up.

Good questions: What is the source of money for these global financial markets? Central banks appear to be just the primer to leverage their money values and trading volumes. And is the global system just creating its own source of money by multiple-leveraging the collateral on which money generation was once based? In other words, does expansionary exuberance mixed with loop-back complexity create more bloat from its own bloat?
Immediately related elementsHow this works
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Compression Thinking Â»Compression Thinking
Compression vs. Expansion Thinking Â»Compression vs. Expansion Thinking
Expansion Economics Â»Expansion Economics
History - how did we get this way? Â»History - how did we get this way?
Service Industries Â»Service Industries
Bloat Â»Bloat
Financial Froth
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