All the currencies of the world today are derivatives of the dollar ...An astute observation indeed - one which we have remarked upon time and time again.
Simple words from simple men will serve us well when the complexities of our derivative world collapse into a much simpler understanding of reality: The FIAT dollar is a derivative of gold. The FIAT dollar is the FIRST true derivative, and all financial derivatives (including all fiat currencies) are derivatives of the FIAT dollar.
All futures are a derivative of the present. All FIAT currencies derive their value from future performace. I defy anyone to refute this simple truth with their charts and graphs.
Though, in truth, this is merely an allegorical image for our digital world, where "1's" and "0's" can flash before us at the speed of high frequency trading in a digital inflation that will shock even the most hard edged inflationista!
This is why, today, certain monetary factions are "emerging" to separate their currencies from the FIAT dollar (and it's fate) and in that effort, they hope to separate their currencies from this current FIAT / dollar derivative nature. The devil is in the details here, but all can see plainly that physical gold is at the heart of it.
Physical gold is the wealth asset that has no expectation of future performance. It's performance is as permanent and utilitarian as the performance of oil, and of bread. It has a "here and now" purpose, with no entanglements, no counter party claim. The very essence of possession is the antithesis of encumbrance.
Today, you would go quite hungry "eating food futures", and go nowhere fast with "gasoline futures" in your gas tank. In the simpler time that lies ahead, you will have no wealth in hand holding "derivative futures". All these worlds will come together as one, as an equity based (here and now) paradigm overcomes the debt based (future performance) paradigm.
Hugo's article is a simple story of backwardation and contango, and though not stated implicitly, the implication is clear - how the test of CONfidence resides in the dollar's ability to regain contango through the current manipulated price discovery mechanism of the COMEX.
Simple words, and well worth reading. For from this we know that HSP has partaken of the flower of understanding.