F8ck the coming apocalypse is worse than I previously estimated...
While that is likely a fairly accurate statistic, it's still very misleading. There is a fable that is told (sometimes) to economics students to illistrate the nature of debt like this. Here is one version of it I quickly found with google...
It is the month of August; a resort town sits next to the shores of a lake. It is raining, and the little town looks totally deserted. It is tough times, everybody is in debt, and everybody lives on credit.
Suddenly, a rich tourist comes to town. He enters the only hotel, lays a 100 dollar bill on the reception counter, and goes to inspect the rooms upstairs in order to pick one.
The hotel proprietor takes the 100 dollar bill and runs to pay his debt to the butcher. The Butcher takes the 100 dollar bill and runs to pay his debt to the pig raiser. The pig raiser takes the 100 dollar bill and runs to pay his debt to the supplier of his feed and fuel. The supplier of feed and fuel takes the 100 dollar bill and runs to pay his debt to the towns prostitute that, in these hard times, gave her services on credit. The hooker runs to the hotel, and pays off her debt with the 100 dollar bill to the hotel proprietor to pay for the rooms that she rented when she brought her clients there.
The hotel proprietor then lays the 100 dollar bill back on the counter so that the rich tourist will not suspect anything. At that moment, the rich tourist comes down after inspecting the rooms, and takes his 100 dollar bill, after saying he did not like any of the rooms, and leaves town.
No one earned anything. However, the whole town is now without debt, and looks to the future with a lot of optimism. Most of these derivitives are just like the debt that this small town had, interlinking trade debt that largely self cancels. (Insert plug for Ripple here, if you like) What the real fear is that, should one of the major players here, say the hooker, was also indebted to the tune of $100 to her drug dealer. This whole story coudl come crashing down if the rich tourist didn't get his $100 bill back. However, not all of it would come crashing down; some portion of the debt is real enough and back by real assets. No matter how much of the derivitives can actually be paid, the assets are real.
EDIT:: Notice that in the story, the total indebtedness of the town was about $400