This Tavakoli interview is very enlightening, and I would encourage anyone who has about an hour and a desire to learn from one of the world's leading experts on credit derivatives tune into this.
I found especially interesting the discussion about control fraud, the whole phenomenon of bankers and others in the financial sector not only not getting punished for doing essentially whatever they want, but in fact getting rewarded for it, even in the aftermath of the 2008 credit crisis, and the implications of this behavior going forward.
She also has some interesting comments on gold:
" ... If you've been reading theFinancial Times,you see a lot of people who are dismissive of gold. Well, here’s an interesting thing: The Derivatives Exchanges accept gold in satisfaction of margin calls.
We had credit derivatives traders who wanted to have contracts on credit derivatives on the United States that would settle in gold. Because if obviously the United States is in credit trouble, what would you want? You would want gold.
You don’t want euros, you don’t want any other currency; you want gold.
The thing about gold is that you don’t have counterparty risk. And if you look at the rebuttal for people who are saying that gold isn’t money, well, I’m sorry, but gold is being used as money already on derivatives exchanges around the globe. Now that wasn’t true five years ago. It’s true today. J.P. Morgan itself, around eighteen months ago or two years ago, said it will accept gold as collateral in satisfaction of margin calls. So they’ve de facto said gold is a currency."
