What derivative(s) could offset trillions of US dollars? Second, who would be holding them? Well, actually, I can think of a possible answer. The only thing that's WORTH anything anymore is something finite and diminishing - natural resources. Found in Russia, Canada, and Africa. So if the Chinese are smart, they'll be investing those billions of dollars in these countries. excepting maybe Russia. Think about it. Africa. I imagine they can buy the place cheaply about now - now that AIDS has decimated the population and then some.
Any way I look at this picture, it comes back to the same thing - the best thing for you and me to do is accumulate the same things the Chinese want - resources. Gold, silver, miners, uranium, oil. And the one thing that we still do well in the US -biotech stocks. There's always going to be disease, there will always be a market for medicines.
My reading suggests that the derivatives bomb is quite large and ought to be measured in the trillions. Who is to say how that device is constructed? I'm not sure that entirely disregarding the possibility is such a good idea.