Credit Default Swaps has grown to be a huge market: The total value
of all CDS contracts is something like $450 trillion. Because
buyers and sellers of insurance usually create multiple "policies"
as they attempt to control risk, that number includes a lot of
duplication. Real exposure, says the Bank for International
Settlements, may be only 20% of that, or $90 trillion.
Some studies have put the real credit risk at just 6% of the total,
or about $27 trillion. That puts
the CDS market at somewhere between two and six times the size of
the U.S. economy.
The amount of money the US government needs its central bank to
print would definitely crash the US dollar like a piece of banana
paper.
