What does the World Benefit from Forex?

Hi Guys!
I know this question can be strange and silly but I have to ask it.

What does the world benefit from our forex trading, I mean, in all other jobs and businesses, we render some services to the world and then we get paid for it, but in forex, we earn or loose money, but does the world benefit from it?

All opinions appreciated :39:
Thanks!

Hello and welcome to the forums!

My answer to your question would be a single word:

LiQUIDITY.

:slight_smile:

Speculators contribute liquidity, as PipMeHappy has stated.

And that’s what we all are — speculators. Every retail forex trader is a speculator (as your question implies), which means that we have no commercial interest that requires participation in the currency market.

And, although the sum-total of speculation occurring in the market contributes vital liquidity to the market, [I]our contribution to that total is insignificant.[/I] All the retail forex traders in the world account for only 3½% of worldwide foreign currency transaction volume.

[I]The speculative volume that matters[/I] is all due to large professional and institutional speculators.

We retail traders tag along with this market. We play around the edges of the market. But, it would be a stretch to say that we matter to the market. Or to the world.

.

Simply said, no. Forex doesnt contribute anything to the world.

You can make money trading forex like people here do but the effect on the world or economics is not existant. People love to mix forex and stock exchanges together but they both have been created for different reasons.

Stocks: created to allocate money (fundings) in order to create possibility to fund people with great ideas and give them the opportonuty ti create value to the soviety (opening companies, starting new ideas, creating jobs etc.) <- this is why the netherlands invented the stock exchange. A fu ctioning stock exchange is a fantastic tool to keep your economy running great and give opportunity to people who are not rich by birth. it keeps creating companies, it keeps creating jobs. No country in this world what has no fnctionin stock exchange (reorder of wealth and possibilites) has ever been a rich country.

Forex:
Created only for the reason to maintain control over free floating currencies and manage differences in international trades by giving the opportunity to secure yourself against fluctuations in differences of two currencies compared to each other. As i once explained somewhere in a longer read, immagine you sell10 airplanes for 1 billion to china. you make a deal right now with fixed sums of €, the planes delivery and payment due is in 2 years. now if the euro gains in value within these 2 years of 10% all your profit margin in producing these airplanes is wiped out as you get less euros for the same amount of rimimbi. Yousecure yourself on the FOREX by entering contracts that cost you 0.01% of the trades volume but insures you that you will be paid exactly the amount you signed the contract for.

Soin basic translation: stocks are created to create wealth and give possibilitie to people with ideas, someone has a great idea, i buy his stock and invest in his idea. The best example of this is the East India Trading company, a company which grew with the help of its share holders (stock holders) to a company which was more powerful then most countries in the times of its existence in europe.

While i speculate on stocks i help companies grow, create jobs, keep world control for my coutry.
While i speculate on forex i do nothing but speculate for myself, it has absolutely no effect for the mankind.

Immagine we stop FOREX, and reintroduce fixed exchange rates as they were years ago. the economy wouldnt stop running, ev erything would be the same, the need for insurance contracts as described above would diminish and the worlds economy would probably even run more efficient. nothing changes.

If we closedown the concept of stocks we would never seen applegrowing to the most valued company in the world, microsoft woudnt exist, facebook aswell, railroad companies never could have gained enough money to control half of north amerca by their transportation etc etc etc. with apple, microsoft and facebook and coompanies of that kind, USA is colonizing other countries. In europe, japan and other parts of the world you dont really have any alternative to facebook apple or microsoft. Why? because the amercans have the stock exchanges which pumps incredible sums of money into very talented people and gives them the edge and the possibility to create something fast enough that the competition from china or japan or europe cant follow fast enough.

the foreign exhange basicly is only created to keep control over free floating currencies. But in firstplace, the concept of free floating currencies is very young and a lot debated and declared as nonsense by most of the nobel prize winning economist in the world. so forex is created to keep control over something that basicly isnt needed on the world.

If we ever introduce a world wide currency that not every single state is allowed to have his own currency then the forex will stop existing and the world economics wont change at all.

If we stop the stock exchange concept our economy will grow to a old men economy, where only people who already have a lot of money are able to create something (as it used to be in the victorian united kingom, before the concept of stock exchange was introduced only lords and people had a title from the monarchy were able to move anything in the country, people with no title were deemed to be workers only)

Completely agree, but moreso i think it is hope for the general population of the world of a method to create wealth.

Hi.
This is from someone who has been in the workforce for 30yrs.
I do agree that operating in this business just cannot be counted as being a productive member of society.
We do not have a service rendered to people. We do not have a product given to people. There just will not be a difference in society if we would fall off the planet.
So, I am saying that I do agree with all of the above statements.
Sure, that is all common sense. No brainer.
Should we then feel bad about ourselves? …
I would venture to think a little bit more on the subject. I want to bring up some ‘good’ benefits about this trade. And this will expound more on what katsu has explained.
This [B]is[/B] a chance to create wealth. And we know it’s only a chance. It’s not easy. If it was, then everyone would opt to do this. So, there will be a sacrifice in order to get to the point where your eventually just sitting there raking it in.
Also, this is better than depending upon the government hand-outs that a whole lot of people do. Called ‘welfare’. Along the same lines is it’s better than becoming a drug dealer, or being in the business of dealing with illegal products.
So, are we being productive memebers of society? No.
Is this a chance of accomplishing financial indepence? Legally? Yes.
Will this road be easy? No. You must put in [B]a lot[/B] of time into it.
Will we inject money into the economy? Sure. Everyone spends money who has it.

Should we feel bad about venturing into this trade?
I believe we shouldn’t.
It’s an avenue.
I choose it. For the rest of my life.

Mike

I agree with the “no” answer from TURBONero (although I did not read his whole post).

I got often the question from friends: a doctor saves live, an engineer build bridges, but you as a trader, how do you contribute to make a better world? There is hard to find a positive answer for that.

So I just rather say for the original question: “no”.

Speculators provide liquidity and take the risk that multinational companies are not willing to take, but that need to secure an exchange rate for the future profits of selling their products overseas. Also, financial markets, including the Forex market has the function of price discovery through the forces of supply and demand.

Now all over the world forex is being traded, The main benefit is that it is good home based business not require much things to start just a trading account a computer and trading skill can start this business. More benefits of this market are 24 hour business , part time earning is possible here so many people are getting profit from this market.

What you said is a personal benefit, the world overall does not get anything valuable from forex market. Its only the liquidity, nothing else. No product, no brand.

Lets cut through the crap. The "world " does not benifit from anything mankind does. We are a cancer and will eventually consume and destroy our host. Very very few of us (certainly not anyone here) will ever be remembered to contributing anything of any valve to histroy. But I’ve deaded my brain voicing my option to no-one that cares.

Such is life

:slight_smile:

That’s the optimist in you speaking, right? :wink:

Ha ha. Na.

Thats reality bro. Even though it’s human conditioning to believe that what we do does make a difference, history like the markets is very very cruel and will not speak our names.

But its that same human conditioning that drives us to survive. And as a social animal, the chances of survival for the individual increases if one becomes dependant on the survival of the collective.

So maybe by extension the dependency of the financial markets on forex, stocks, metal, commodities, futures increases its chances of survival therefor yours and mine.

Worth a thought

PS we’re still a cancer but

Jobs and businesses render services to people, i.e. individuals, not to the world. Forex traders are individuals too, and they work for themselves, like an huge number of freelancers out there. In other world, forex hardly contributes to the world, but then again most jobs and businesses don’t either.

Well, we can improve the world with spending the money we make wisely. :slight_smile: If we wouldn’t had taken that money out of the market it could be that drugs was bought with it. :o :wink:

Interesting opinions from all of you, always trying to keep an open mind.

It’s easy to say that we provide liquidity… But my question to the rest of you who have answered this, is do we really?

To be honest, I don’t care a lot about it. There are Billions of people that are not in forex and still don’t make or think that they are benificial to the world. They just do what they do to make a living.

And there are millions of people that may think while reading this: “wtf! I DREAM about forex as it can get me out of this sweatshop and you are complaining about what it means to the world? Want to trade places?”.

For me forex is just forex, I do other stuff to make my community better.