Steve,
Help me out. I'm stuck on your second and third paragraphs below. I
don't see the part where you are /clearly explaining /how, just because
it takes two to tango in currency markets, the respective economies of
the currencies gambled upon are not adversely effected. Zero sum game
aside, such gambling is world news, and how the billionaires play is
mimicked, not for true reflection of a currency's value, but for the
fact that big investors set trends.
Market confidence is everything, and we only go by faith regarding
today's currency value. Most banking systems are incapable of proving
there is much value in their money, and if they were to be judged by the
same policies by which they judge others, they would have collapsed long
ago. The Feds that should combat inflation have allowed this devaluation
for their own ends.
Also, at your posted site, I grew equally perplexed over this excerpt:
common myth is that speculators, like George Soros, can cause a
national currency crisis. It is important to remember that it is
governments who largely control economic information flows and who are
vulnerable to pressure from the mega-rich. Also, when corrupt regimes
siphon off billions of dollars from their national economies, they
weaken the infrastructure and diminish future productivity. It is the
savvy speculators who perceive aberrations in value, and provide the
necessary information feedback to the world which helps bring about change.
Could this be interpreted to mean that if the speculator is savvy, then
the truth is being revealed or that the change will be good? If Soros
short-sells the Cdn dollar, which he could have the other week, and
others hear about it and do likewise because he's the king, and they
win--it fails to affect our economy in /any /way? So the loser pays, if
he's good for the credit, which many often are not, but the country
whose currency was bet against has the task of regaining market position
in an environment of good will gone bad because the king decided he had
a feeling, based on gov't reports, that he would call tomorrow's actual
monetary truth, and could use an extra billion.
No doubt Soros is savvy, but are he and others playing the same game
right to interfere in the future of any nation's well being?
You say that in the zero sum game, no net wealth is created. That those
participating in currency spec are using highly liquid assets as
deposits, like gov't treasury bills, bonds, etc. These may be liquid,
but they aren't exactly real. The value of most currencies hasn't been
more than 5-20% real since the Seventies. Aside from actual value rules
that should be challenged, the currency speculators often win, and duly
manage to acquire even more unreal money because that's the system. They
go on to reinvest or speculate vast unreal sums for which they are given
real credit and in turn assets. Actual global wealth is a small fraction
of a point compared to the illusory credit these speculators are playing
with. And the more they are allowed to amass, the more devaluation world
wide occurs.
From what I've read, deposits are more typically not so traceable. Up
to one third of HNWI wealth is held off-shore. Taxes on cash assets
alone are staggering. And it is from these unregistered tax exempt
companies that millionaires and billionaires most often play their
positions. No one has addressed the loss in taxes on offshore
placements, I noticed. And we are discussing just currency spec. taxes.
No one can readily estimate the worth of offshore tangibles.
Given a two trillion a day in global currency specs estimate, there
seems to be a lot of fictitious money going around, much untaxed, and
very much affecting all economies. It's created out of nothing, yet
because there's so much of it, all deemed to be assets, it affects real
value of the global standards.
We are definitely adversely affected by the speculative positions of
HNWIs. The funds they play with are unreal, and result in mounting
financial burdens for the less wealthy, whatever way they are invested.
Taxes alone on this market could feed the world, pay for health care
globally, and be properly invested in revitalizing our natural home.
(The purpose of the Tobin Tax is, to some, a start in the right
direction, but its very function is still condoning and legitimizing a
system which hurts everyone--one that should be dismantled.)
With all this money supposedly being made, I can fully appreciate the
position that billionaires could easily right the many wrongs of this
world (many which they have fashioned), if only they cared. Must be
genetic aberration.
Natalia Kuzmyn
Steve Kurtz wrote:
We have on this list someone who knows how to steal money from those who
have very little of it. That is akin to alchemy.
As I've clearly explained, every currency transaction requires a
willing, profit seeking counterparty. If George Soros (or Buffett, or
Gates, or??) makes a billion dollars from a currency position, others
cumulatively lost it. (zero sum)
If it is claimed (sometimes correctly) that a person can muscle a market
in one direction, the person must be accumulating a large position. The
person *must* reverse that position to achieve a profit. So the same
force in one direction would be applied in the opposite direction.
My informal paper on this and other aspects of currency and commodity
markets is here:
http://www.gold-eagle.com/research/kurtzndx.html
Steve
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