Have you guys heard the latest chatter going on? Nicholas Sarkozy (French President) is calling a meeting and it will be held by George W in Washington, on Nov. 15. This meeting will host 20 country leaders (if im not mistaking it is being called the G20) The point of this meeting is to try and convince the world that regulation is needed for all foreign currency and that these fluctuations in rate are the real blame for the finacial crisis we are in. If Sarkozy gets his way it would mean the end of forex!!!
The end of Forex would mean the end of free trade in general. I do think that’s gonna happen someday but not anytime really soon.
Regulation would definitely be bad, but also, regulation doesn’t necessarily imply death, I would like to know what KIND of regulations they are talking about?
Um yeah…let’s hope that doesn’t happen or it’s back to bagging groceries for me! Yikes!
LOL!!!
Regulation would definitely be bad, but also, regulation doesn’t necessarily imply death, I would like to know what KIND of regulations they are talking about?
I think they are saying they want all currencies to bew within 1% of each other in regards to there rate and some chatter about it being pegged to gold which I think can be extremly volatile at times but they are viewing it as stable like post WW2.
Yeah, that’s what I was referring to. We would not necessarily be out of business if Forex became obsolete. The commodities can be traded on the same systems as Forex as well as S&P futures.
There are plenty of securities out there for us to trade. Pipcrawler, don’t put your application in at the local grocery store quite yet buddy!
If all currencies bewed within 1% of each other what would happen to import/export? Wouldn’t we just pick whichever country is closest?
What would be the point of China holding $U.S. reserves?
What is the point of having different currencies at the same rate? wouldn’t having a world currency make for sense?
How many people would lose their jobs? I am thinking hundreds of thousands world wide.
Why would we need a financial centre like London? wouldn’t it cease to exist?
Admittedly I am not much of an economist but how would all this work?
lol and I’m usually the one answering questions…
Alot of good questions and I think your questions illustrates why it can’t work. Why would China for example force there currency to gain in value? That would hurt them in terms of export which if Im not mistaking is responsible for most of their economic boom? There government has a mandate limiting the rate at which the yaun can gain in value (i think it is 1/2 of 1% per day). A weaker yaun keeps them competitve because a stronger dollar for example can buy more yuan and therefore more product. If a rabbits foot cost say 7 yuan (aprox $1) then the yuan doubled in value then it would cost aprox $2 because now 3.5 yuan = $1 so china would either have to cut there cost or they would be not as competitive and maybe we would buy our rabbit foot somewhere else.
Personaly i think Sarkozy is a joke and maybe a bit of a lunatic. Heres an idea why don’t we sell or better yet give all of our banks to europe to control and let them fix the world for us.
Darn, I was kinda looking forward to working a 9-5… oh well!
Seriously, I don’t think we will see any multilateral agreements to peg currencies at that meeting or in any meeting in the future. My view is that it would never work for the simple reason that is every country different. Each has its own political system, financial system, economic strengths and weakness, and unless the entire globe goes into one political system or power, then the financial system can not do so either. That’s one of the reason the first Bretton Woods still isn’t in place today. Trade imbalances became too much for the Bretton Woods system which resulted in a return to free floating currency rates. This dynamic is another reason why I’m not too sure the Euro will last in the long run…but that’s another story.
So, unless everyone wants to vote me as “Supreme Ruler of the Earth” so I can create one system, it probably won’t happen. Which is too bad… I think I’d make a great “Supreme Ruler of the Earth!”
FX is one of the largest business in our Globe.So do you really think that “big guys” which are taking B.I.G profit out of market would let some clown like Sarkozy to kill their milking cow??I do not think so.
They have far more greater power than he have.
This same people are one of the major financiers of president campaigns in USA.And you know how things are going,you scratch mine back and i will scratch yours…
Their are the financial/ruling elite(Rockefeller,Morgan,Rothschild,Bush…families) and via financial institutions that they own they are making bunch of $$$$$$$$ @ FX market for them self.
So i would bet mine house that FX is gonna live happy “life” for quite some time.
Cheers,
VTK
