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Originally Posted by Books  In my opinion the fact that small traders can make money right now is the result of the huge imbalances of the economic system. In an economic system using bond based currency origination inflation is something that is forced into the system out of necessity.
So if you have 16 world currencies that have a value that is declining on a daily basis the only increases that can occur are changes in the spending patterns of the country of origin or the other countries that the currency trades against. |
Prices are always in relation to something. All prices are stated in pairs. The only reason prices change is because of differences in the perceived relative value of the items in the pair. The currencies are the product of the central banks, which are the meta-corporations of the banking networks of each "country". Changes in the currency pairs are produced by differences in the circumnstances faced and the management strategy used by these corporations. It is not all that different from commodities or equities. In a sense, currencies are artificial commodities.
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There are three reasons why the currency market is far more risky today than at any other time in history.
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Individual currencies aside, the currency market today is far safer than at any other time in history. The only thing that could collapse it would be World War 3 (with nukes).
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If you aren't a huge bank or someone else with a real purpose to be in the market then you shouldn't be in it. The entire thing is a giant bubble.
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It is not a bubble at all.
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There could very well be a situation where all currencies go down in value at the same time.
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Yes, that is known as a commodities rally.
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It's interesting how the forex markets don't have that as a possibility.
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If the price of the USD and the price of the JPY both fall in relation to cotton, it has no impact on the USD/JPY. It only has an impact on the cotton/USD and cotton/JPY.
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That's exactly what is happening at this present time. The entire purchasing power of the entire system is becoming less valuable.
The money will go somewhere.
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Hasn't this been happening for about a hundred years now?