Derivatives

I heard an author being interviewed on OPB (Oregon Public Broadcasting) radio say that J.P. Morgan helped create financial derivatives that eventually caused the economies of the world to tumble. The creators purportedly had worthy goals such as economic efficiency and financial innovation. If so, then I think this proves once again how good intentions are not enough and that good intentions can easily go awry. The author also explained that financial "derivatives" are things that derive their value from something else. For example, the author explained, if there is a bar of gold, one can create a contract that mimics the expected gold price fluctuations, and this contract would then derive its value from the actual gold bar. Regardless of this author's attempt to explain derivatives, it is a complex instrument that has created a financial mess whereby nobody really knows the actual value of these derivatives that caused the economic crisis.