Just curious. Is it possible that there is too much money out there that is being used for trading, messing up economic systems? Obviously the ability to trade is important to those systems but at some level fundamentals should determine value. What I am wondering is if its possible that due to the vast amounts of money being used for trading in relation to the total amounts of money available period, could trading be taking over as the determining factor in value and pricing? If so would that skew value and pricing across the board?
Price invariably finds balance between buyers and sellers - a lot of this money will oppose itself, short and long. If there is too little money, then markets are not liquid enough. If there is too much money, you have great ilquidity. If there is too much money and it goes to prices it does not belong, then consider how the race of oil up to $147 quickly righted itself. But to the trader, there are markets from the very illiquid to the very liquid. Pick your markets and don't worry about the esoteric. Trade the prices.
Yes when there is to much slosh in the market then you will get a distortion in prices,,some nations use capital controls, a small tax when entering or exiting,,like china does
1) Yes, yes .....and yes. 2) There is too much "interest" in trading instead of "smart people" being involved with more socially redeeming work. Why would anyone want to waste their lives with the "ordinary" when you CAN get rich quick. :eek:
to create wealth something tangible has to be made. trading doesn't create wealth in the system it just transfers it from one hand (usually the wealth producing) to another. A huge cause of inflation is taking money out of the productive economy and chasing existing assets with it, add leverage to that by commercial banks and the productive economy gets hit again. having to buy raw materials at inflated prices. Leverage and money creation should only be used to produce real assets keeping inflation in check.Inflation doesn't have to happen in a fiat money system as long as the newly created money is used to produce more goods (create wealth). actually that is the beauty of the system production can be based on demand of goods rather than supply of money currently available. the things that money buys is actual wealth not the money itself. All the money in the world won't do you any good (gold or fiat) if no products are available to purchase. Wealth is taking something from the earth and laboring it into something that improves life. If goods are demanded and people are willing to labor for those demanded goods and the resources are available. The lack of money shouldn't stop us from creating this wealth.
Strange... I thought all of that money was spent trying to buy votes for the Democrats and Progressives. What you're talking about is CAPITALISM... Obama is totally against that.