All the worlds currencies are fiat, they are backed by nothing other than faith in the issuing entity. The US dollar was the last non-fiat currency, and that ended in 1971, when Richard Nixon ended gold convertibility for the dollar. This occurred with a week or two after France sent in warships to New York harbour and collected all its gold from the US Federal Reserve Bank of New York in exchange for its dollar holdings.
In 1980, the total M3 (the broadest measure of US dollar supply) was around $1 trillion in circulation and bank holdings. Today (the US stopped reporting M3 in 2006,
http://www.kitco.com/ind/Turk/turk_mar262006.html citing national security among other reasons), the M3 is well over 30 trillion. This means that a 1980 dollar is worth 30 times (in nominal terms) what a 2011 dollar is. Due to systemic manipulation, the actual purchasing power of the 2011 dollar is not 30 times worse, but it is much much less than a 1980 dollar due to inflation in prices.
As for these derivatives, it is important to remember that this is notional value. In reality, if there is a another massive collapse, I foresee a 10% to 20% or so actual loss coming from the total notional value. If you look at the 2007-2008 collapse, in mark to market terms, the total notional value of OTC derivatives was reduced from 1.5 quadrillion to around 1 quadrillion dollars.
If you look at the total amount globally of central bank issued bailouts (true theft from the citizens of the world into the pockets of the banking overlords) you come up with a figure of around $50 trillion. This is around 10% of the notional value that was wiped off the books.
To further extrapolate out, it you now have $1.1 quadrillion in notional value today, and this collapses at the same rate as 2008, you are looking at a potential loss of around $100 trillion. This coincides rather well with this announcement from the World Economic Forum: "Over US$ 100 Trillion Additional Credit Needed to Support Global Growth"
http://www.weforum.org/news/over-us-100-trillion-additional-credit-needed-support-global-growth To sum it up, the banksters and their puppets in the global nation's governments systematically probe and push these paper debts unto the backs of the 99% through hyper-sophisticated geo-political and economic modeling. They push things right up to the breaking point in a country (ie Greece and its riots) then put into place a hand-picked government that will assume as much of the debt as possible. They then move on to the next country, the next trading sector, the next military war (all at once in millions of simultaneous global pressure points) and continue the process of wealth and power consolidation.
These schema are slow, grinding, un-halting, scientifically designed for billions of sociological, political, economic, military, global informational/surveillance grid, physical resource, etc etc variables.
Yes much of this is 'all on paper', BUT the moment that the debts/losses are monetized and dumped onto our backs then they enter the real world of human impact, as austerity, death, reduced standards of living, and tyranny quickly follows. Wealth and power flow up in greater and greater quantities, to fewer and fewer people, and we all suffer under this hideous regime.