Thread: Foreign Exchange Market (Is it just the world's biggest casino?)

Here is a question that I have and I thought I'd ask some of the most civilized and mature people on t'internet.
(I just took up straight razor shaving btw.)

Where does the profit involved in the exchange of currencies come from?

I understand that these individuals do work hard to work on their statistical models and such to make good choices as when buying/selling currency. So you could say they earn a fee for maintaining the large market the allows the rarity and value of the different curencies to be accurately determined.

But where does the profit come from, is it not just like a casino where the money that leaves with the winners comes straight from the pockets of the players that made badly timed or thought out decisions?

Would the world not be a better place if we all used the same currency and just worked towards adding effort (value) to the system rather than some very large companies existing soley to edit long lists of numbers and say that they are trading (what exactly are they doing for humanity?).

At the end of the day the shifting currency exchanges mean that one unit of my work/effort will buy a different amount of foriegn goods one day to the next.

Why do we use many seperate currencies exactly? (Apart from the fact that the wordls economies developed seperately to begin with.)
What about the Euro, one currency for many countries, will we/should we all end up doing this?

I guess I could go and read books on the subject (If I had more time), but I thought I'd just see what others think, for the fun of it you know.

I have alot more of this nonsense but I will save it for another time, I hope I can learn stuff including other peoples viewpoints.

I might talk about razors (and my crazy home made sharpening solutions) some other time too.

short answer. yes.

It's all gambling. Because according to most laws if you actually KNOW what's going to happen and play according to that knowledge you'll get thrown in jail for cheating.

So most stock and exchange markets are basically massive legalised casino's.

Stock markets are a big pyramid scheme, where you try to profit from the next buyer in the line. Currency is just a small part of that.
And it's just like with poker: If you are playing the game and you don't know who the sucker is, then it's you.

Since both of you use the Euro, what do you think about the issue of a single currency, is there less fluctuation of the Euro vs the USD compared to your original currencies before the change?

Well, I think it has stayed about the same. The dollar fluctuated significantly around the Belgian franc, and it is doing the same with the euro.

I think that the Euro has done a lot of good though. It can compete with the dollar, and it is big enough that other countries recognize it, and in some case use it to trade in. And there was not so much variation between western europese coinage anyway.

The convenience of having 1 currency far outweighs any other issues imo. Especially since within 1 hour worth of driving, I had to pay in deutchmarks, French francs, Belgian francs and Dutch Guilders.

Ummm...that may be but the Euro gets the award for Least Esthetically Pleasing Currency Design on the planet. I don't think they could have come up with a more generic presentation--at least I hope not!

And if there were a single global currency, who would issue it? And who would set the value and control it's volume?

Whoever controls the currency, controls everything. What entity, what country do you trust with that much power and control?

Originally Posted by honedright

Whoever controls the currency, controls everything.

Did you take that quote straight out of Webster's after looking up the definition of the "Federal" Reserve?

I agree with your statement. I think Nathan Rothschild and either his father or grandfather IIRC said essentially that (He/they didn't care who was in power because they controlled the currency).

Probably true since the house of Rothschild (the Rothschild family) is said to have a worth of 300-500...........Trillion dollars or half the monetary value on the planet. Bill Gates' and billionaires like him have pocket change in comparison.

Fascinating stuff.

Chris L

Originally Posted by paydepst

Ummm...that may be but the Euro gets the award for Least Esthetically Pleasing Currency Design on the planet. I don't think they could have come up with a more generic presentation--at least I hope not!

TRUE!! Man, our dutch bills were damn nice looking...now we've got those european monstrosities.

Also, despite promises by governments that prices wouldn't go up because of euro's We're now paying 80 eurocents for a snickers bar. It used to be 80 cents (guilders) and the exchange rate between guilders and euro's was 1:2,17

That does kind of **** me off. Other than that it's quite a convenience.

Originally Posted by ChrisL

Did you take that quote straight out of Webster's after looking up the definition of the "Federal" Reserve?

The US Federal Reserve Bank asI've heard it explained:

It's not federal.
It's not a reserve.
And it's not a bank.

Apart from that, the name is spot on.