TerryL, there is not a simpler explanation - unless you are being sarcastic. There cant be one world currency as that would not relieve any pressures. Economics is all about supply and demand. If there was one currency it wouldnt take into account different governments' interest rate changes. Governments can not always make the same interest rate changes as pressures on inflation are different in different areas depending on the level of economic activity being experienced there. Prices need to be somewhat stable (inflation low) so people and businesses can plan and make rational choices regarding the future.
Hi nzbryant and everyone else You have been speaking of something that strikes at the heart of the problem I have. I do not wish to trade forex if the very nature of forex is destructive to this world. Interest is destructive as it makes the rich richer and the poor poorer. For this reason, I will be taking advantage of the services offered by gft, forex.com, etc, in providing interest-free accounts and interest-free rollovers. However, if different currencies were not needed and could be done (ie, one world currency could be established), then there would be no need to trade in forex. (it would be sad to see forex go, of course, but sadder is letting the future go for the present aka next eternal life compared to this life - please humour me if you must. just don't withold your knowledge from me.) Therefore, I humbly await your detailed response - consider me as young and stupid in forex - I am new to it especially its inner workings. I have mentioned the reason why this issue is imporatnt to me and why this issue should be imporatnt to all of us, in the hope that you'll know what info. I am seeking.
"Gambling as I would lossley define it would mean the making of profit without providing a service needed by people" Trading in currency markets provides the critical service creating liquidity, and efficiency of pricing. The primary reason for the existence of forex markets is to facilitate trade between countries, but trading in the markets by professional speculators, each with a different version of 'fair price' is what creates efficiency in the market. A market is efficient when there is enough liquidity for most traders and in general when no-one trader is able to set or move the market price (this is not always possible and many traders refuse to trade when liquidity is low because they consider the market inefficient and able to be manipulated by bigger players).
That is beautiful, toe. I agree to it as it seems to the basic premise behind suplly and demand in markets. What then is your view on multiple currencies? see my previous 2 posts? would it be better for only one currency to exist? if not, why not? In other words, is it better for different countries to have different currencies rather than one common world currency??
TerryL: I would love the world to be free of sickness and hate, and have permanent very interesting and well paid jobs for everybody, and no divorce. I thiink you are being too soft - as the world is not like that, it is a mix of shitty and divine and nice and bad - heaven is the only perfect place. I fully intend to reap as much wealth as possible from the game that is the markets, as I can (my skills and nature suit it), and I love it, and I want the money. If you dont fk them, they'll fk you.
I would not want to contribute to the destruction of the world, although it has been told by God that that will be the state of the world before He ends it. He will judge each individually, so saying that something is destructive, and they fk us so we should try to fk them. Sorry, but I will never, God willing, have that attitude. If anything, that will be the cause that drives us all to being greedy and self centred persons who take advantage of whatever we can, inclu. the poor, disabled, and those with a lack of knowledge. I do no wish to contribute to destruction. So back to my original question. I do not ask of anything but for you to part with your anaylsis on the possiblilty of a common currency and the advantages, if any, of having multiple currencys against having one world currency.
it could be argued speculators moving billions from one place to another are providing a liquidity service, but the Oanda and FXCM level speculators serve no useful purpose and are essentially leeching (more correctly, trying to leech) off of the movements of those that matter.
"is it better for different countries to have different currencies rather than one common world currency??" It's not my area, but my question to you is what would a world currency hope to provide? If we had a world currency it would not stop a packet of breackfast cereal being several times more expensive in some countries than others. In this case perhaps separate currencies allow countries with widely different productivity levels (among other differences) to have their currencies valued by supply/demand rather than by companies or governments setting prices, so saving problems that may arrise that way. "it could be argued speculators moving billions from one place to another are providing a liquidity service, but the Oanda and FXCM level speculators serve no useful purpose and are essentially leeching (more correctly, trying to leech) off of the movements of those that matter." All speculators who successfully make money from trading (and some who aren't) are contributing to the efficiency of the market. Think about the many ways there are of trading the markets. 99% of it is about exploiting an inefficiency and once that inefficiency has been exploited whats left is efficiency (efficiency of movement from one price to another, without random movement). (nearly) All speculators whether big or small seek to gain from small inefficiencies. The result for non-speculators, that is for International Trade is that importers/exporters are able to rely on their currency valuations as being fair at the time (that is without random movement, if there is a sudden change in valuation it would not be unreasonable).
In reply to Dado Wallener saying "it could be argued speculators moving billions from one place to another are providing a liquidity service, but the Oanda and FXCM level speculators serve no useful purpose and are essentially leeching (more correctly, trying to leech) off of the movements of those that matter.". Remeber that forex brokers do offset their position on the interdealer market if they do not wish to risk further in that particular ccy. So it is true that views on currencys matter because if the forex broker counters your view, then even if the trade took place on the interdealer market, the price would'nt be affected as the views would balance out. IS this right?
I just said what toe said although in a simpler and probably less sop[histicated way. toe : All speculators who successfully make money from trading (and some who aren't) are contributing to the efficiency of the market. etc