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Strategies & Market Trends : The coming US dollar crisis
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To: Real Man who wrote (11840)9/26/2008 8:38:31 AM
From: dybdahl1 Recommendation  Read Replies (1) of 71454
 
Here is an example of derivative:

Suppose you expect that six months from now the price of the U.S. dollar with respect to the Canadian dollar will be higher than it is today, and would like to purchase US $1,000 six months from now at today’s rate. Suppose the current price of US $1,000 is CAN $1,200.

Another person expects that the price of the U.S. dollar will decrease over the coming six months, and is willing to sell U.S. dollars at today’s rate. Both of you can make a contract that will be exercised six months from now. Interestingly, neither of you needs to put down any currency today when signing the contract. When the contract matures, transactions must be carried out at the agreed-upon rate. This type of contract is called a forward contract.

canadianeconomy.gc.ca

Please explain how such a derivate fits into your domino theory, where all tilting dominos make the next tilt.
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