[EMAIL PROTECTED] wrote: > > On 14 May 2002 at 13:47, R. A. Hettinga wrote: > > > At 8:10 AM -0700 on 5/14/02, [EMAIL PROTECTED] wrote: > > > > > > > How could this possibly be true? :ast I checked, GDP for the US > > > was about 10 trillion bucks a year, the combined GDP of > > > every nation on earth per year can't be more than 100 trillion, > > > most of which doesn't involve anything crosiing a border, > > > so how can there possibly be trillions of dollars worth of > > > foreign exchange a day? > > > > > > You're confusing assets with transactions. > > > > Cheers, > > RAH > > > > > > I'm really not, I'm just wondering what the hell all these transactions > are. I understand that in principle I could convert 100 dollars > into Euros and back again 100 times to generate 10,000 dollars > worth of transactions, but why would I? If I'm under the delusion > that the dollar is overvalued, presumably somebody else must > be of the opposite opinion for a trade to take place, right? > So if I change my mind half an hour later, presumably it's > because the dollar went down, right? So the people who thought > the dollar was undervalued should be even more confident in their > opinion, I would think. > Yeah, I know, if the world worked that way stock price > graphs would look like smooth slowly varying curves instead > of spikey hairy monsters. > But still, trillions a day? it just seems incredible to me that > there should be that many transactions.
Think arbitrage. Allegedly only 2% of foreign exchange transactions are actually related to anything real. The other 98% are just banks playing gambling games on the money markets. Scary, if you ask me. Cheers, Ben. -- http://www.apache-ssl.org/ben.html http://www.thebunker.net/ "There is no limit to what a man can do or how far he can go if he doesn't mind who gets the credit." - Robert Woodruff
